Louis Vuitton’s Counterfeiting Woes

While imitation can be the sincerest form of flattery in many circumstances, it becomes a nightmare for many companies. The more popular a brand is, the likelihood it will face counterfeiters at some point. Globally, counterfeiting amounted to $1.2 trillion in 2017. According to the Global Brand Counterfeiting Report, global online counterfeiting created losses of $323 billion in 2017, with luxury brands experiencing $30.3 billion of losses in online sales. As these numbers indicate, counterfeited brands create a huge and expensive problem for the actual brands.

Not only do counterfeited products affect the economy, they may also affect consumer health and safety, especially when it comes to counterfeited drugs. In fact, one million people die annually from fake drugs and consumers spend $200 billion annually on these drugs. Other industries where counterfeiting is a serious threat to health and safety include automotive and aviation industries. Fake car parts cause 1.5 million injuries and 36,000 deaths annually.

One of the most counterfeited luxury brands is Louis Vuitton. As a result, it makes headlines frequently in its quest to assert its rights. The company spends more than $17 million annually to combat counterfeiters. Unfortunately, it is likely the company will always fight counterfeiters as counterfeiters continue to market and make products so closely designed like the original it is hard to distinguish between the real product and the fake product. Further, the Internet makes it easier to hide counterfeited products. In fact, on Instagram Louis Vuitton is one of the top targeted brands at 8.51%. This is only one online avenue. Recently, Louis Vuitton sued hundreds of websites over counterfeiting issues.

As indicated, the time and money Louis Vuitton has to expend in order to combat counterfeiters is tremendous. However, the alternative could prove detrimental. If Louis Vuitton were not pursuing counterfeiters, it would lose significant profits and could taint its reputation as knockoffs typically do not have the same quality. Therefore, the company must continue to assert its rights in order to protect its reputation, its revenue, and its future.

Patent Pools May Create Potential Antitrust Issues

Patent pools are on the rise. They are groups of two or more patent holders that publicly agree to share (or cross-license) patent rights. Patent pools are ideal for technology that contains a lot of overlap among various innovations in order to function properly. For instance, smartphones have a lot of overlap among innovations created by telecommunications technology giants. Companies such as Samsung, Microsoft, Apple, LG, and others sometimes form patent pools to share innovations and reduce the risk of lawsuits. This is fairly common in the telecommunications industry. In fact, a study conducted by Toulouse School of Economics indicates that cross-licensing accounts for half of all licensing agreements in the industry.

Sharing patents provides many benefits among companies within the same industry. Some of these benefits include reducing licensing fees, combining innovations to provide state-of-the-art products, providing faster development, and saving on costs, to name a few. However, while patent pools provide many benefits, they also create challenges. For instance, concern exists that patent pools may create collusive opportunities that hinder new companies from entering a particular market. These pools are also subject to regulatory scrutiny to ensure they do not create unfair competition or thwart innovation.

The challenges presented by patent pools can introduce complicated scenarios that may cause issues greater than what the pools were formed to avoid. Therefore, antitrust laws exist to promote honesty and fair circumstances for competition. However, every licensing agreement is different. Therefore, addressing specific provisions can make it difficult to provide antitrust rules that apply to all situations. Intellectual property by its very nature is unique, making it difficult to instill laws that are general and broad enough to encompass a tremendous amount of scenarios.

As the number of patent pools continues to rise, the need for antitrust laws promoting fair competition also rises. However, this area of law is not fully developed, enabling potential unfair situations presented by patent pools in the meantime. It will be interesting to see how patent pools can be regulated so that fair competition ensues. Unfortunately, given the complicated nature of intellectual property and individual licensing agreements, it may take some time to come up with solutions.

Ways Celebrities Capitalize on Brands

Celebrities typically become well-known for their skills. For instance, many actors such as Julia Roberts, Al Pacino, Leonardo DiCaprio, and Meryl Streep are famous for their abilities to play diversified roles. Singers such as Beyoncé, Taylor Swift, and Justin Timberlake sell out concerts because they give great performances and many people like their songs. Tom Brady, LeBron James, Serena Williams, and Tiger Woods garner attention because they are among the best in their sports. As long as their skills remain strong and in demand, they continue to capitalize on their brands.

While honing a skill and performing at high levels protects celebrities and their brands, making them more valuable, publicity helps to maintain that value and keep celebrities in demand. The more celebrities are exposed, the more they are remembered and the more the public associates with them. While newer talent and age may play a factor in how long or how well celebrities can maintain their brand value, celebrities often use other methods than the skills that made them famous in the first place to keep their brand valuable.

For instance, many celebrities launch clothing lines that help to keep their brand thriving. Such lines include Fabletics by Kate Hudson, Ivy Park by Beyonce, SJP by Sarah Jessica Parker, Goop Label by Gwyneth Paltrow, Paper Crown by Lauren Conrad, and many others. Some celebrities launch their own perfumes. Justin Bieber, Jennifer Lopez, Britney Spears, Jennifer Aniston, Sean Combs, Derek Jeter, and David Beckham are just a few who market their own scents. The number of type of products celebrities launch is large. Other items may include purses, handbags, makeup lines, and so much more. In addition to their own lines, celebrities endorse a plethora of products including athletic gear, credit cards, medication, technology, and endless other products.

Although endorsing and launching products is another big avenue that can keep a brand alive, some celebrities also tap into new territory to keep their image public. For instance, many famous singers and athletes have dabbled with acting. They include Lady Gaga, Tim McGraw, Brett Favre, Christina Aguilera, Shaun White, and numerous others. Partnering with charities is also another way celebrities can benefit.

As you can see, developing, maintaining, and enhancing a celebrity brand can take a tremendous amount of time, work, experience, practice, and even stepping out of a comfort zone. However, the more a celebrity remains in the spotlight, the more important that brand becomes.

The Licensing Executives Society: A Voice for the IP Community

Founded in 1965, the Licensing Executives Society (LES) is an organization that supports, represents, and connects nearly 3,000 IP, business, and technology licensing professionals. LES provides members with best practices, education, mentoring, networking, and participation. Membership benefits are many and include chapter events, access to the LES directory, industry connections, social media channels, industry publications, certified licensing professional (CLP) certification, CLP preparation courses, free education, career center advantages, and registration discounts.

At Pellegrino & Associates, we are a big proponent of this organization and all that it offers the IP industry. This is why we are so actively involved. Our company president Mike Pellegrino is currently treasurer of LES. He is also the chair of the patent valuation standards committee established by LES, whose charter is to pursue American National Standards Institute (ANSI)-accepted standards for the valuation of patents in a variety of contexts including financial reporting, capital formation, economic damages calculations, and others. Mike is also a member of LES’s public policy committee, seeking to help set standards for intellectual property-focused regulatory matters with the SEC and others. He is also a member of LES’s standards committee for IP use in the boardroom.

While our expertise within the organization is on IP valuation, LES strives to find standards for many IP areas. These areas include the following: ISO/TC 279 innovation management, IP protection in the supply chain, FRAND licensing, IP licensing, IP management for startups, intangible assets in the boardroom, IP valuation, and IP brokerage.

Working together with IP professionals around the world, LES represents one voice for the IP management community. It supports a variety of organizations including corporations, law firms, consultant/service providers, universities/government, entrepreneurs, and students in various industries such as life sciences, high technology, consumer products, and others. We are proud to be a part of and to support this prestigious organization. To learn more, visit the LES website at https://www.lesusacanada.org/. Also, be sure to check out the Events section to learn about the annual LES meeting.

Successful Athletes Are Ripe for Trademark Approval

In January, professional wrestler Rhonda Rousey filed a trademark for the “Rowdy” term. In March, the University of Maryland Baltimore County filed several trademarks after its historic win in college basketball when the No. 16 seed defeated the No. 1 seed in the NCAA men’s basketball tournament. In April, Boston Marathon winner Desiree Linden filed a trademark for “Keep Showing Up” to use on athletic gear. By filing for trademarks, these athletes and/or associations can capitalize on the accomplishments they have made.

People remember winners. Winning takes an abundance of skill and sometimes luck. When a remarkable win occurs, fans revere the athletes and their hard work. Therefore, it makes sense for athletes to capitalize on their wins by trademarking terms that the public associates with them. Obtaining a trademark is one way athletes can take control over who uses their likeness (or personal brand). It also gives them a way to continue earning money based on their skills, accomplishments, and dedication.

If athletes do not file for trademarks that people associate with their likeness, then other people and companies may try to make money on the hard work accomplished by these athletes. Furthermore, others may misrepresent or even abuse the likeness of a person, which could damage their reputation and downplay their capabilities. By filing for trademarks, these athletes are better armed to protect their image.

Not only are winners often an elite group of people, they are unique. For instance, there is only one Rhonda Rousey and one Desiree Linden. While other athletes exist in the same sport, their stories, skills, and accomplishments are always different. There is never the same story in any given win. Therefore, the logos, phrases, names, and terms for which these athletes apply are unique to those athletes. Furthermore, the more these athletes win or the more remarkable a win is, the more likely a trademark is warranted.

As athletes continue to achieve remarkable feats and set new records, the distinctive trademarks associated with them will continue to prove valuable to them.

Ohio State Football Coach Urban Meyer and His Worth

One of the most well-known college football coaches recently found himself in a contentious situation. On August 1, 2018, Ohio State placed Urban Meyer on administrative leave while a two-week investigation took place regarding his knowledge of a domestic violence situation involving his former assistant coach, Zach Smith. According to sources, Meyer knew about domestic violence charges against Smith, yet allowed the assistant coach to remain on the job. Meyer contends that he followed proper reporting protocol.

As with any news story, sources often take different sides. Some sources claim not enough evidence exists to fire Meyer and argue that he did the proper thing, while others believe Meyer should have fired his assistant earlier or taken stronger action. During the investigation, many stories continued to arise, often making it a he said/she said situation in the public eye. This publicity creates ground for arguments and adds to the chaos of a controversial situation. Ultimately, the final decision resulted in a three-game suspension over Meyer’s handling of domestic abuse allegations.

While the investigation ensued and Ohio State fans held their breath in anticipation of the outcome, the integrity of the university was at stake (and may still be). Negative publicity on such an important figure tied to the college reflects on the university as a whole.

Currently, Meyer’s net worth is reportedly $20 million. If the university had decided to fire Urban Meyer, there is potential risk that his value would decline. He could have lost nearly $40 million on his contract with the university. Furthermore, it could be difficult for him to find another position in the same capacity at another university or even in the professional football realm. He would likely lose endorsements. In fact, during the investigation, Bob Evans put its partnership with Meyer on hold. It is not clear whether the franchise will reinstate it now that the verdict is in.

Meyer is not the first coach to face such a circumstance. In 2011, Penn State fired its iconic coach Joe Paterno. Such circumstances do not only affect the coach, but also the university, students, staff, and fans. Therefore, much more is often at stake than just the career of the coach. The actual perception of the university is paramount.

Harley-Davidson: A Perfect Example of a Brand Survivor and Protector

Many times, people hear them before they see them. Whether individually or grouped in a crowd, they come rumbling loudly and distinctly. Dressed in shiny chrome, tailored colors, personal insignias, and unique designs, Harley-Davidson motorcycles make a big statement. So big in fact that they make up approximately half of the U.S. motorcycle industry. In 2017, company revenue reached $5.65 billion with 242,788 retail motorcycle sales worldwide. No other motorcycle company compares with the strong customer base that surrounds the Harley-Davidson brand. Its Harley Owners Group (HOG) boasts more than 1,000 chapters and more than one million members around the world. The company even has a Harley-Davidson Museum located in Milwaukee, Wisconsin that showcases 450 motorcycles, attracting an estimated 300,000 visitors annually.

This year, Harley-Davidson celebrates its 115th anniversary, which is no small feat for any company, let alone one that offers nonessential products. Over the years, Harley-Davidson has endured depressions, wars, and strong competitors, and still reigns in the motorcycle industry today. It has offered hundreds of models in three broad categories: touring motorcycles, cruiser motorcycles, and sportsters & street bikes. However, while motorcycles are at the crux of the brand, its merchandise is no small factor in the success of the company. In fact, in 2016, the brand’s clothing accounted for 5% of total sales, at nearly $285 million.

Since clothing and the overall use of the brand name contributes to the success of the company, Harley-Davidson aggressively pursued an infringement case against print-on-demand T-shirt company SunFrog. SunFrog’s service allows customers to design T-shirts and store the designs in the company’s online database, in which other customers can use. This method makes it easy for customers to use a company logo to design a shirt and then give access to that design to countless other customers. In this case, more than 100 instances of infringement occurred using Harley-Davidson’s designs, to which Harley-Davidson objected. As a result, Harley-Davidson won the biggest awarded trademark infringement case in history at $19.2 million.

This verdict comes at a crucial time for Harley-Davidson as the company faces a slump with 2017 representing the third annual decline in sales. This slump forces the company to close its Kansas City, MO factory and to focus on other ways to build sales. However, as history has proven, Harley-Davidson is a survivor with a powerful brand. After all, it is one of the most recognized brands in the world. With new target market demographics such as women, minorities, and young adults, an electric motorcycle in the near future, ever-evolving models, and consistent protection of its brand, Harley-Davidson may survive another 100+ years!

Trademarked Scents a Rarity

Trademarking a scent is an uncommon event. This is because scents usually serve as a particular function, such as perfumes or air fresheners, where their purpose is to make something smell a certain way. Therefore, scents are typically patented rather than trademarked. While patents often protect something that serves a function, trademarks typically help consumers associate certain products with a brand. Trademarks that are most familiar include logos, symbols, and slogans. However, scents, sounds, and colors may also serve as trademarks, but trying to prove that they work as trademarks is a hard sell.

To trademark a scent, the scent must be distinctive, reminding consumers of a particular product. However, this is a rare occasion. In fact, only 13 active scent trademark registrations exist today. Although distinctive smells surround us daily, we do not typically think of a particular company or product to attach that smell to. For instance, while McDonald’s French fries or even a Starbucks coffee may have a particular smell, these smells are not distinctive enough to separate them from other fast food French Fries or coffee. For instance, when we smell greasy fries, we do not automatically think of McDonald’s. We typically just associate that smell with French fries in general.

Therefore, obtaining a trademark for a scent is a remarkable feat. However, in May of this year, Hasboro joined an elite group of scent trademark owners. The USPTO determined that the Play-Doh scent is distinctive enough for consumers to associate it with the product. Given that Hasboro has sold more than 3 billion cans of Play-Doh since 1956 and sells 100 million cans annually, it is likely that millions of people have become familiar with the scent. This means that the scent is unique enough that when consumers smell it, it reminds them of Play-Doh. It means that the scent is like no other. In comparison to other companies that have been awarded trademarks for scents, Hasboro’s Play-Doh scent was likely incidental based on its ingredients. This means that the company likely did not purposefully create a scent for its products like Verizon did to help customers associate its scent with Verizon stores. Rather, the mixed ingredients just had a particular scent that worked to Hasboro’s advantage. Filing for a trademark for that scent was a smart business move for Hasboro.

Could Blockchain Technology Be the Game Changer in Combatting Cybercrime?

Cybercrime poses a huge threat, costing the world an estimated $600 billion in 2017, up from $450+ billion in 2016. Among cybercrime is the threat of identity theft. In 2017, 16.7 million U.S. citizens were victims of identity theft at a $16.8 billion cost, up from 15.4 million victims at a $16.2 billion cost in 2016. These statistics indicate that cybercrime is a serious problem that continues to climb at a rapid rate.

Cybercrime can happen in a variety of ways including sending unsolicited emails, illegally downloading music, stealing personal bank account information, creating computer viruses, and so much more. With all of these options, it’s no wonder cybercrime is so high! Furthermore, technology changes so rapidly that businesses and individuals often use outdated technology. Using outdated technology presents a host of opportunities for cybercrime to occur.

As cybercrime continues to create challenges, companies continue to improve technology. A relatively new concept called blockchains is on the horizon, which may be the game changer in slowing down cybercrime. Blockchains are digital registers that permanently and securely store transactions. This technology uses a hierarchical method to save data in blocks, with each block pointing to a previous block with a timestamp of each transaction. This method makes it easy to trace and audit transactions. It is also a secure way of tracking transactions as data saved in blocks cannot be modified or breached. In addition, the decentralization of blockchains makes it hard for cybercrime to occur.

While the technology is in its infant stages, interest continues to increase. According to Statista, the blockchain technology market will rise from an estimated $210 million in 2016 to an estimated $2.3 billion by 2021. An increase in blockchain patent filings corroborates a significant increase in the field as blockchain patent applications more than doubled in 2017 with more than 1200 applications compared to 594 in 2016. Some of the biggest companies in the world are conducting research and filing patent applications, including Sony, Google, Microsoft, Bank of America, Walmart, MasterCard, IBM, and many others. Blockchains can support a variety of industries that conduct many transactions such as finance, real estate, healthcare, music, insurance, and many others, as evidenced by the various types of companies filing for patent protection.

As blockchain technology becomes more mainstream and more companies continue to file patent protection, potential exists for combatting cybercrime on a higher level.

IP Potential in eSports

Sports play a big role in entertaining people around the world. The variety of sports brings a significant amount of fans, amounting to tens of billions. Each sports market involves some form of intellectual property. For instance, the football market has many patents. Football patents exist for helmets, trousers, the ten-yard line, artificial turf, shoes, and more. Trademarks exist for Super Bowl logos, specific team names, taglines, and much more. And of course copyrights exist for televised games. Without intellectual property, these markets would not make near the revenue that they do and there would be no entitlement to the pieces that make up the markets. For instance, without copyrights, any fan could sell or copy televised events, merchandise, or tickets without repercussions. At that rate, the sport would not be able to make a profit to pay the team players or other personnel that make events happen. In turn, the markets would fold and billions of fans would be in mourning.

While traditional sports command big followings, another type of sport is receiving great interest, eSports. eSports is hitting the market by storm. In 2017, eSports drew 258 million unique viewers with $1.5 billion revenue, with an expected reach to 299 million viewers this year and $2 billion revenue by 2021.

eSports is the sport of video gaming on a professional level. It typically involves a team. Popular eSports include League of Legends, Dota 2, Counter-Strike, and Overwatch. Fans can watch via online or at special venues such as arenas. Prize pools are in the millions of dollars, with an expected rise as eSports continues to garner more interest. Just like traditional sports, eSports advertises, endorses, and brands its events. Therefore, obtaining intellectual property to protect the eSports market is a necessity.

What makes eSports so enticing and exciting to so many people is that it does not take extraordinary athletic ability, a specific body build, or an exorbitant amount of money in training, equipment, and apparel to make it in the sport. The average person could make it in the eSports world with lots of practice in front of a video screen at home. Honing one’s skills still takes commitment, but the costs of getting there are not quite as high as traditional sports. Furthermore, the average person is more likely to relate to eSports competitors because he or she can also be a participant, making it even more exciting to watch others at the professional level. In contrast, most average people can only dream of having the skills, knowledge, and build to make it to a traditional sports level. For all of these reasons, the eSports market is expected to soar in the coming years. As a result, it is likely that intellectual property surrounding eSports will increase.

In the past ten years, patent grants for “digital gaming” have reached nearly 160,000, according to a search in ipAnalytx, an IP analytical database. Companies involved in the market include technology giants such as Samsung, Google, Microsoft, Intel, and many others. However, patents are just one type of intellectual property that will experience an increase in the eSports market. Gaming companies that broadcast or hold events must file for copyrights to avoid piracy. Teams and their players must invest in trademarks to protect their identities, market their brands, and gain sponsorships. Therefore, the IP potential for eSports may be enormous.