4/12/2007

Patents and Trademarks

In Chapter 8 we talked about Intellectual Property and using copyright and patents to protect that knowledge. Patents and copyrights protect an investment and are seen as a barrier to entry. However, at least one company and one industry are proving that the opposite is in fact true. Coca Cola has registered their trademark but has NOT patented their ‘real thing’ recipe. Copyrights only afford protection for 20 years. If Coca Cola had patented their recipe it would now be up for grabs and by not obtaining a patent they have been in business for over 100 years. The fashion industry also has trademarks. However, the clothing design itself is not patented AND there was a Supreme Court Case in 1941 that states that the practices of patenting styles was a violation of antitrust laws. So if you design a new jean and it becomes a new fashion trend, you can expect very quickly for other companies to copy your design and slap their own trademark or logo on it and start competing with you. Normally, this would be seen as an industry that you would not want to enter because it is too easily copied and there is no way to differentiate your product and protect it. However, the fashion industry is decidedly fickle. Cool is only cool until uncool people start to pick up on the trend. Then a new trend has to be designed and marketed, and if successful, then copied. This trend for the fashion industry is successful because clothes are out of style before they are worn out necessitating the need for a high frequency rate of replacement. So in this case, the lack of intellectual property protection actually promotes the fashion industry, challenges them to come up with the next fashion trend, and charges them with continuous business. Quoting from a New York Times article “In some cases, it appears that lack of protection can lead to more vibrant and dynamic industry.”

3 comments:

Eric said...

Jada has a very good point. “In some cases, it appears that lack of protection can lead to more vibrant and dynamic industry.” It just depends how the industry is made up.

Kim said...

There is a huge danger in not using a patent. If Coca-cola's recipe gets out, it is ruined. The company has been smart to keep it locked up, but one disgruntled executive could "accidentally" leak it online. KFC's recipe for biscuits and chicken is all over the internet.

Dr. Tufte said...

-1 on Kim for grammatical errors.

I think there is a chicken/egg problem here.

Fashion designers engage in serial differentiation. Do they do this because there was a court ruling that they can't copyright their designs? I'm not so sure.