To the Folks at Twitter: Use Trademarks to Monetize Your Traffic

I just read an article on a packaging blog that mentions how companies are adding their Twitter ID on product packaging. I agree with the article’s conclusion that it’s a smart marketing move that allows a company using this strategy to stay in touch with customers. Pepsi, for example, added “twitter.com/pepsiraw” to its Pepsi Raw beverage packaging.

Here’s an idea for the folks at Twitter, who have been criticized for not monetizing their customer base. Try licensing your trademarks to companies who want to add the Twitter ID to their product packaging. After all, you own the Twitter trademarks! You can license the brand name and logo for premium royalties, in my opinion.

I ran a quick search and found six live trademarks federally registered to Twitter.

Starwood Hotels Alleges Trade Secret Theft

W Hotel
W Hotel

Starwood Hotels, owners of the W Hotel brand of boutique hotels, filed a lawsuit against Hilton Hotels and several former Starwood executives hired by Hilton. The lawsuit alleges trade secret infringement.

The complaint alleges that Hilton lured key W Hotel executives and that these individuals misappropriated W Hotel trade secrets to help Hilton with the launch of its Denizen brand of boutique hotels. The trade secrets listed in the complaint include:

  • Proprietary marketing and demographic studies that cost more than $1,000,000 to develop.
  • Training and operational materials.
  • The names of designers, property owners and developers.
  • Guidelines for how to create the “Ultimate W Experience’ in converted properties.
  • A dining concept called a “restro-lounge” designed to optimize food and beverage services in the W Hotel lobby-bar areas.

This is just another example of how far-reaching intellectual property has become. As brands become more important and as innovation touches on customer experiences created by companies, the intellectual efforts used create these assets will increase in strategic importance.  This kind of competitive knowledge is safeguarded by contracts called confidentiality agreements. Starwood Hotels required its executives to sign them, and this may be an important factor in this trade secret fight.

To read the entire complaint filed in District Court of New York, click here:  starwood20complaint

Borrowing Blue

Smart marketing. That is what comes to mind when I think about what China Glaze has done with the branding behind its For Audrey nail polish. Take a look at the product.

For Audrey Nail Lacquer Ad
For Audrey Nail Lacquer Ad
Something Blue Counter Display
Something Blue Counter Display

Did you notice the clever associations the nail polish company created by relating the product to the blue color associated with an iconic jewelry store? Or the movie with that store’s name?

On its Web site, China Glaze calls this product a “Tiffany inspired turquoise creme nail lacquer”. But the word “Tiffany” does not appear anywhere on the nail polish bottles or the store displays.

Why is this all so clever? Because the color conjures up images of exclusivity, allure, romance and also a bit of decadence. How did this come about? There is actually a trademark tale behind it all. Tiffany & Co. owns the trademark exclusive rights to use the color robin’s egg blue for boxes, shopping bags, packaging and catalogs in various markets, including fragrances, tableware and crystal. The famous luxury retailer has done a magnificent job of managing this exclusive trademark color in the market for high-end luxury items.

Has China Glaze infringed the color trademark owned by Tiffany & Co.? Not likely since their nail lacquer is not included in the above categories.

Knock-Off Awards

Can you tell the difference?
Can you tell the difference?

Shame on you. That’s the purpose of Plagarius, a German cereremony that awards the most blatant knock-off  artists. The purpose of the awards is to send a message that stealing innovations is not acceptable.

Having their innovations knocked off in this manner can be an innovator’s worst nightmare. With some money and determination, they can shut down the knock-off artists. This kind of behavior really highlights the law of the market: if you succeed others will imitate.

Click here for the full BusinessWeek story.

Acknowledgment: Thanks to Arvind Natarajan for sending me the link to this story.

News Brief: Lingerie Entrepreneur gets to Bottom of I.P. Controversy

Pop culture critic and journalist C.E. Hanifin recently pointed out a fascinating intellectual property controversy at Target Addict. That blog comments on a news story run by The Virginian-Pilot, involving I.P. and lingerie.

April Spring, of Norfolk Virginia,  obtained a design patent in December, 2008 for a design of women’s briefs marketed under her Foxers brand. This is the image of the design patent, as it was issued by the U.S Patent Office.

Design Patent D581,628 for Women's Briefs
Design Patent D581,628 for Women's Briefs

Spring’s design attaches an elastic waist band to the briefs, much like those seen on men’s boxer shorts.

Spring filed a lawsuit against Target, Corp. alleging the retailer knocked-off her design. The Foxers briefs are normally priced at between $20 to $26 a pair. The Target briefs that allegedly rip-off her design are priced at around $5 a pair.

Note: design patents are a special type of patent and differ from utility patents, which cover working inventions. Design patents cover only the ornamental look of a product, as opposed to how the product works.

A Fail Whale Trademark?

I recently sent a call to readers asking for stories to blog about. Mr. Joe Scarry from Chicago kindly sent me a recent article in the New York Times Magazine profiling the curious rise of the Fail Whale.

The Fail Whale
The Fail Whale

The Fail Whale image was created by Ms. Yiying Lu. Ms. Lu initially created the image to send as an e-card to a friend. Eventually, she uploaded the image to iStockPhoto. Under the iStockPhoto image license terms, the image was made available for a few dollars under a perpetual license.

Things unfolded when Mr. Biz Stone, one of Twitter’s founders, purchased an iStockPhoto license of the whale image. Mr. Stone used the image so it would appear on Twitter whenever that site experienced an outage due to heavy traffic (a smart branding move in my opinion since the image is funny, unexpected and connotes teamwork). The Twitter community quickly grew fond the whale image. One of the fans named the image the “Fail Whale”. Another fan tracked down Ms. Lu and her online fame only grew from then.

There is now a Fail Whale fan club, Flickr site and community art site. In true Web 2.0 spirit, the Fail Whale image has become part of a community’s culture.  The community owns the image, freely adapting the image in new ways. It was a community member who first named it the Fail Whale. Many of the community websites use the Fail Whale term without worries about ownership. Here is what the Fail Whale fan site says about itself:

“This site is here to poke fun at the people who seem to take online social network downtime a little too seriously. Failwhale.com is not affiliated with Twitter. Rather, it’s a love letter to the hard working folks at all of our favorite online social networking sites who lose sleep over the concept of scalability.”

The community for all purposes owns the whale. Will that someday change since it has become valuable? Ms. Lu already took the image off the iStockPhoto site which allowed users to perpetually license the image for a low price. She has also  recently created an official Fail Whale Merchandise Site. The next logical step to build a business around the Fail Whale is to apply for a trademark, and then license the trademarks for merchandising. (Note: a copyright can eventually become a trademark if it identifies a source of goods).

Will the Fail Whale remain open for the community’s free use? Would that be the best thing? Or, will it be Generation Y’s version of Micky Mouse or Hello Kitty? The next time you see the Fail Whale look closely. You just might see a small round trademark symbol.

P.S. Have you lately come across an intellectual property controversy that piqued your interest? If so, please send it my way.

Pimp My Trademark

I recently watched the MTV show “Pimp My Ride“, in which people with junkers contact the show with the hopes of getting their cars souped -up. The show I happened to watch involved a pretty beaten up Honda Civic. During the car’s transformation, the team installed Lambo doors on the Civic. Lambo doors are car doors that swing up like those in the famous Lamborghini models from the ’80’s (just think of Miami Vice).

I recalled seeing a trademark at one point owned by Lamborghini on the motion of its doors. I did a little research at the U.S. Trademark Office and found the live trademark registration # 2793439 owned by Lamborghini. Here is the image of the trademark as it is currently registered to the company:

Image of car doors swigning up to open.
Image of car doors swinging up to open.

This registered trademark was issued to Lamborghini in 2003 and “consists of the unique motion in which the door of a vehicle is opened. The doors move parallel to the body of the vehicle but are gradually raised above the vehicle to a parallel position. The matter shown in dotted lines is not part of the mark.”

Did Lamborghini license this trademark to the folks involved in MTV’s program? If not, did they commit trademark infringement?

It seems that several companies make and sell kits that allow mechanics to transform any old regular car doors into the pimped out Lambo doors. Most of the kits I have seen advertise the doors as “Lambo doors”, giving proper attribution to Lamborghini as the pioneers.

Back to the trademark infringement. It seems to me that the kit manufacturers would not be infringing the trademark shown above since they are only selling the specialized hinges that make the car doors rotate upwards. That is a functional product (subject to patent laws) and not trademark, which only extends to source identity. If you go back the trademark listed above, Lamborghini owns the right to how car doors actually move on an actual car. So, perhaps the person who owns the car commits the trademark infringement every time they open and close their car doors!

Is Lamborghini going to do the same thing the recording industry has done and go after individuals? Let’s hope they have better things to do.

Boundless trademarks

Trademarks have a dual purpose: to prevent consumer confusion by preventing any company from usurping the identity of another firm; they also are private property rights that secure a company with goodwill and brand equity.

Trademarks have lately been controversial since the scope of trademark property has expanded a lot in recent times. Some trademarks can even legally become “famous”. When a mark is legally recognized as famous it can stop other users of the mark even if there is zero consumer confusion. This has created problems for companies in totally different markets and contexts who try to use a similar mark that no one would confuse with the famous mark, e.g. using rolls royce for a dry cleaning service. It has also created problems for people who try to comment on a brand through parody or social commentary (see discussion thread below dealing with the Barbie). Owners of famous marks can potentially censor others who tarnsih the mark in any way.

The other controversial development is the use of trademarks to cover sensory perception, e.g.  strange trademarks, where companies secure a property right to things like sounds, colors, shapes and motion. That was the subject of my recent lecture, and a Wall St. Journal article I wrote last year about how Apple received a shape trademark for the iPod. If you would like to see the recent lecture slide show please click here:

The Shape of Things to Come: Non-Traditional Trademarks from the iPod to the Chippendale Dancers

I’d love to hear about what your  thoughts are on trademarks!