Duets Blog : Creativity and the Law: DuetsBlog

In reading news of the passing of Fred Morrison, inventor of the Frisbee ®, I was surprised to learn that the Frisbee wasn't always called "Frisbee."  Morrison sold his rights to Wham-O in 1957 ("sold" being used loosely -- he apparently earned more than $2M in royalties).  Morrison had dubbed earlier prototypes of the flying disc with the following names:  the Pluto Platter, the Whirlo-Way, and Flyin-Saucer.  Morrison's reaction to Wham-O's name of Frisbee?  "I thought the name was a horror."  He later recanted.   According to CNN, Wham-O's inspiration for the Frisbee name was the Frisbie Pie Company, whose pie tins were apparently used by college students as early flying discs. 

So, let the speculation begin:  how much is the success of the Frisbee due to the name, and how much is due to everything else (design, functionality, enjoyment, etc.)?  Although it is probably impossible to ever know the answer, I submit that a good name is probably worth at least 10% of sales.  (The above reports peg sales at 200 million units.)  Is there a rule of thumb in the marketing industry for this, or is anyone aware of any studies that have attempted to quantify this?  I also note that Frisbee is a solid, almost staccato two-syllable word, like iPod, Apple, Sony, Honda, Nike, Kindle, and many other popular brands that seem to have staying power.

By the way, you want horror?  How about the horror of this:  point your browser to frisbee.com.  Go ahead, try it.  As of this writing, it redirects to this page--a big pay-per-click page of flying disc ads, none of which mention "Frisbee."  The page is titled, FLYINGDISCS.ORG, with the subtitle, "Ashes fly back into the face of him who throws them."  Sounds like there may be some bad blood there!

I should also point out the "horror" of the name "Frisbee Golf," both from a trademark standpoint and as an avid player in the game of disc golf.  While I am generally a fan of Wham-O products, I think Wham-O was a little late to the modern incarnation of disc golf and the specialized discs used in the sport, which are substantially smaller and flatter than a traditional Frisbee disc (think Ultimate Frisbee) with a heavy, hard rim.  I daresay Wham-O would not take kindly to the Professional Disc Golf Association changing its name to the Professional Frisbee Golf Association.  (FYI, two of the more popular brands in the disc golf biz are Innova and Discraft.)

And the real geeks can see Morrison's original design patent here, and the later utility patent for the distinctive grooves that appear on the shoulder of Frisbee discs here.  (Distinctive?  Yes.  Trademarkable?  No, because the grooves are functional.  I'll spare you the calculus that explains the aerodynamics . . . for now.)

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In December, PepsiCo introduced the United States market to a new, special limited time offer. From December 28-February 22, the Pepsi brand would offer Pepsi Throwback. This version of Pepsi contains real sugar, just as Pepsi products did until the early 1980s. This is the second market trial of Pepsi Throwback, as it had originally been on store shelves in the spring of 2009. As we near the end of this limited time offer, I urge Pepsi to make Pepsi Throwback the standard Pepsi product permanently. Offering a cola product with real sugar and 1970s era nostalgia packaging will benefit the brand. It is a healthier product that will foster goodwill in the marketplace, it evokes positive memories and it gives the brand an advantage over Coca-Cola.

The best decision that Pepsi can make from a product standpoint is to remove high fructose corn syrup. Until the last 2-3 decades, the vast majority of colas were sweetened with sugar instead of high fructose corn syrup. Since high fructose corn syrup was introduced, the nutrition value (or lack thereof) has been intensely debated, particularly in recent years. Many attribute high fructose corn syrup to causing higher rates of obesity. It is not smart strategy to use an ingredient that can be perceived as harmful to health. By removing high fructose corn syrup, Pepsi gains a competitive advantage over chief category rival Coca-Cola, assuming that Coca-Cola doesn’t revert back to sugar as well. Even if Coca-Cola does make the move, Pepsi would retain first mover advantage, and would still be more positively perceived. This move of returning a product to the original formula evokes nostalgia feelings. When a brand can be associated with positive, nostalgic feelings, it is usually a beneficial occurrence.

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Similar to the Hostess Brands, Inc. predicament, recently posted by Dan Kelly, Goodwill Industries International, Inc. (www.goodwill.org), the well-known and respected non-profit, didn't own the one domain you would expect -- Goodwill.com.

The domain went up for auction this past December after the original owner, a Japanese staffing company named Goodwill Group, Inc., changed its name and allowed Goodwill.com to expire. 

Instead of seizing the opportunity to own and control this element of their brand by simply buying it at auction, Goodwill Industries gambled, in my opinion, by trying to stop the auction. Ultimately, they lost their request as well as the domain. Their next act was to sue the owner of Goodwill.com for trademark infringement and violation of anti-cybersquatting protection act, amongst other claims.

As reported by Domain Name Wire, this month the case was dismissed without prejudice and the Goodwill.com domain finally went to Goodwill Industries. Although this resolution is good for Goodwill, not owning Goodwill.com earlier denied them the domain during the key December donation period, and, potentially, could have proven a very expensive and lengthy process to resolve.

Since monitoring a domain is relatively uncomplicated, it is puzzling why Goodwill industries would allow Goodwill.com to get away so easily. As a brand manager, I am surprised Goodwill wasn't more vigilant or diligent in pursuing and protecting something so apparently associated with their trademark and their brand.

The goodwill (pun intended) a domain name inures to a brand cannot be overemphasized. One of the more important aspects of branding is presence. On the worldwide stage of the Internet, domains perform a leading role in brand proliferation. 

A domain dispute and the associated confusion, as in this case, was unnecessary, considering resolution could have been reached without extraordinary effort and without hunting for legal remedy.

—Randall Hull, The Br@nd Ranch® 

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Earlier this month, I noted Accenture's words in publicly ending its relationship with Tiger Woods, having announced around December 13, 2009, that it would "immediately transition" to a new ad campaign, and then compared those words to the company's actions in continuing to run the Tiger Woods airport ads even three weeks after their termination announcement. Right after Accenture's announcement, Going Concern Blog asked "Who Will Replace Tiger Woods at Accenture?" They offered some possibilities, including Phil Mickelson, who is already tied to KPMG.

Accenture's marketing team apparently spent some quality time at the zoo to come up with Tiger's replacements, yes, that's plural. A few days ago, in the Minneapolis airport, I saw Accenture's answer to Going Concern's question: Animals. Concourse G was sporting some brand new Accenture ads, one featuring an elephant balancing on a surfboard, with the tagline "Who says you can't be big and nimble?," and another featuring some frogs hopping over one another with the tagline "Play quantum leapfrog." By the way, how nimble or quantum-oriented is a company that needs at least four weeks to have their words and actions begin to merge?

Putting aside the timing for a moment, you might ask, why animals? Clearly animal mascots and endorsers are a much safer option than human beings, for a variety of obvious reasons. Indeed, one Twitter user notes that using an elephant is "no risk." By the way, someone ought to remind Daniel Snyder of this if he ever has the wisdom to re-brand the Washington Redskins professional football team, as I have previously suggested.

Actually, the largest surprise during my experience in Concourse G, a few days ago, was seeing a lingering Accenture ad still featuring Tiger, now more than a month after Accenture's promise of an immediate transition. The Tiger ad in question was of the thinker/doer variety, so a curious one to keep in circulation, as it appears Tiger is doing much more thinking than doing at the moment.

Given how long it has taken Accenture to "immediately transition" to new Tiger-free ads, given that it hasn't yet successfully removed all Tiger ads from circulation, and given the damage it is believed that Tiger has caused to the Accenture brand, I'm left wondering whether companies plan for these kinds of endorsement-gone-wild contingencies as part of their crisis management planning. It would appear Accenture did not and was caught flat-footed, but who would have guessed, right? Nevertheless, Accenture's unfortunate experience might be a good lesson to all those companies who closely link their reputation with endorsers or mascots outside of the animal kingdom. Perhaps having some pre-approved ads ready for emergencies would permit a nimbler and more quantum-like response when things go wrong.

With respect to the choice of animals, they certainly have served others well. For example, a clumsy white duck works for Aflac, and a little green reptile, seems to work pretty well for GEICO. To the extent either of those little guys offend, disgust, or embarrass anyone, at least Aflac and GEICO are in control of their words and actions, so any resulting damage is more easily considered a self-inflicted wound.

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As reported by the Star Tribune, the first B. Dalton Bookseller bookstore will be among the last to close:  the B. Dalton bookstore at Southdale Center in Edina, Minnesota closes tomorrow after a 44 year run. 

Even if a bit sad for the sentimentalists among us (and I am one) to watch another relatively longstanding brand go down in chains, so to speak, this was not altogether unpredictable given modern book retailing.  The B. Dalton brand has virtually no online presence whatsoever.  The domain names bdalton.com, bdaltons.com, bdaltonbooks.com, bdaltonbookseller.com, and bdaltonbooksellers.com, all appear to be parked with pay-per-click pages.  Of the thirty or so trademark registrations in which B. Dalton had an interest at one point or another, twenty-six of them have lapsed or been canceled.  Parent company Barnes & Noble has openly discussed the "controlled descent" of B. Dalton stores in recent annual reports.  The store closing at Southdale is not even the original store that opened there--it moved to a more remote locale within the mall years ago.

Karen's recent posts on the death of the Tavern on the Green have raised some of the same issues at play here:  whither the B. Dalton brand?  One thing that distinguishes the two cases, in my mind, is that the Tavern on the Green brand is reportedly valued at $19 million.  (Query:  how does a company with one business location and a $19 million asset go bankrupt?)  At its height, the B. Dalton brand might have been worth millions, but now it is probably synonymous with "mall-based bookstore with slow sales."  Perhaps it might appraise at a few hundred thousand dollars, but an estimate is not worth very much if there is no buyer.  So long B. Dalton!

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On December 9, 2009, I blogged about the trademark issues surrounding the famous Tavern on the Green restaurant in Central Park. Well, the New York landmark officially closed shortly after midnight on December 31, 2009, after a blow-out party for 1,700 on New Years Eve. The New York Times reported on the items currently being auctioned to pay the prior owner’s debts including 59 chandeliers, a 14 foot King Kong, champagne buckets and a topiary giraffe. 

As previously noted, the Tavern on the Green mark was estimated to be worth $19 million.  The prior owners, the LeRoy family, continue the fight over the name with the City of New York who claims the name belongs to whoever operates the space.  The LeRoy family filed a federal trademark application for the mark in 1978, which registered shortly thereafter.  

Since my last blog post, some interesting updates have occurred.  First, if the City of New York loses the fight, the new name of the restaurant (now owned by Dean Poll) will be "Tavern in the Park."  The City filed a federal intent-to-use trademark application for the new name on November 10, 2009. 

Second, on December 30, 2009 (one day before the closing), an individual from Texas filed a federal intent-to-use trademark application for the identical TAVERN ON THE GREEN mark in connection with bar and restaurant services.  There is no question that the application will be initially refused by the Trademark Office, based upon a likelihood of confusion with the registration owned by the LeRoy family.  However, the Applicant may hope to cancel the prior registration for non-use of the mark. This raises a few interesting issues to be addressed, including:

1. Abandonment

If the LeRoy’s win the battle over ownership of the mark, but do not operate a restaurant under the name, have they abandoned the mark so that others may sweep in and use it? Under trademark law, abandonment of a mark occurs when the owner ceases use with no intention to resume use in the future. In addition, non-use for a period of three years is considered prima facie evidence of abandonment. Bankruptcy raises an interesting question as to intent to resume use and whether another party could prove a lack of intent shortly after a business goes bankrupt.   

2. Residual Goodwill

Since Tavern on the Green is most likely a famous mark, what about residual goodwill in the name?  As described in a previous blog by Steve Baird, even if there has been a technical and legal abandonment of trademark rights, a potential newcomer must consider the residual goodwill that may form the basis of an unfair competition cause of action.  Residual goodwill recognizes that the goodwill in a trademark doesn't necessarily go away right away, but there is no definition as to how long residual goodwill in a mark lasts. 

Stay tuned to see what happens. 

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The impact of the Tiger Woods scandal in branding can be viewed from two different perspectives. The first perspective comes from the point of view of the companies that paid Woods to endorse their products. The second perspective is how the personal brand of Tiger Woods will be impacted as the smoke clears from this series of events.

Two professors in University of California-Davis’ Economics Department attempted to measure the impact from the first perspective. They claimed that shareholders in publicly traded companies that Woods endorsed lost $5-12 billion in the weeks that followed the car accident in Florida that set off the scandal. They undoubtedly have an interesting perspective, but there are limiting factors in their research. However, an undisputable fact of the Tiger Woods scandal is that it put a lot of brand management teams in a very delicate situation. Brand managers at firms where Woods served as an endorser had to consider how their brands would be perceived by their target consumers if they were to continue the relationship. It is not an enviable position. 

When a brand chooses to link arms with a celebrity endorser, it must consider which celebrities will be effective endorsers. It is essential to select celebrities that will positively contribute to revenue growth and profitability. I believe that a celebrity endorser is most effective when the target consumer perceives them as attractive or desirable in some fashion and the product is related to the expertise of the celebrity. For example, Michael Jordan was an effective endorser of both Nike and Gatorade because of his status as an elite athlete and the fact that both brands are related to athletic performance. Gisele Bundchen is an effective endorser for Dolce & Gabbana fragrances because scent is an important aspect of appearance and she is the embodiment of phenomenal appearance. She would be far less effective as a celebrity endorser for the Toyota Camry. With regards to Tiger Woods, he is most effective in endorsing Nike Golf products and any other golf related brands. His effect is diminished for brands like Gillette and AT&T.

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When brands and trademarks are at risk of being infringed, swift and immediate protective action is required, given the inherently reputational nature of the resulting damage. That is why the law typically presumes the necessary "irreparable damage" when issuing immediate injunctive relief, once a plaintiff is able to show, among other things, that it is likely to win its trademark infringement claim. Without "irreparable harm or damage" there can be no court's injunction because the simple payment of money will right the wrong.

But, what about outside the context of trademark infringement and court ordered injunctions, in the world of contracts, for example, when a sponsor no longer wants to be associated with a celebrity endorser that has become damaging to the sponsor's reputation? Is the same degree of immediacy required to erase all public signs of the relationship? Perhaps it depends on whether the damage rises to the level of irreparable damage or harm. If so, then perhaps no amount of money will be or should be spared to pull the ads immediately and stop the reputational bleeding.

One might ask how this dynamic has played out between Accenture and Tiger Woods.

After the New Year, and about three weeks after Accenture announced it had ended its relationship with Tiger Woods, I noticed a multitude of Accenture ads in three different airports (Minneapolis, Dallas, and Phoenix), all featuring guess who? Tiger.

My first thought was genuine surprise to see them, given it had been three weeks, and further given that Accenture was so promptly out of the gate as the first sponsor to publicly sever its ties with Tiger. Indeed, two weeks after Tiger's reputational scandal broke in the news, Accenture announced Tiger "is no longer the right representative" for Accenture's advertising, and it was reported the company would "immediately transition" to a new advertising campaign. Some experts even cautioned that Accenture's Tiger billboards and airport advertising "need to be replaced quickly" for obvious reasons, as they now "damage" Accenture's brand and reputation.

So, how damaging to the Accenture brand is the lingering association with Tiger and the smirks that seem to follow given the now rather awkward branding messages that Accenture had adopted as part of the Tiger relationship? If you read Accenture's words from December 13, how quickly they were announced, and how others have praised Accenture for taking this swift and necessary action, the damage sounds quite serious, perhaps even irreparable, but isn't talk cheap? Or at least, more inexpensive than actions? 

For example, I'm certain the cost of scrubbing a website and purging corporate headquarters of any sign that Accenture still knows "what it takes to be a tiger" is far less than the cost of purging all airports of any trace of the Accenture/Tiger endorsement arrangement. In any event, it would have been more than mildly interesting to be part of the dialogue that must have quantified the cost of implementing the directive for an "immediate" transition from Tiger, and the alternative quantifications of slower transition plans, and the one that the company eventually settled upon.

Do you agree that the greater the damage to Accenture, the more "immediate" the transition would have been, i.e., days, not weeks or months?

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If you travel by air at all, I suspect that Southwest Airlines' "Bags Fly Free" campaign resonates a bit:

This is but one of many examples of Southwest Airlines' marketing and business savvy.  By all appearances, this is a company that exudes a love for its business, which necessarily requires a love for its customers.  It meets its customers where they are:  blogging, on YouTube, on Facebook, on Twitter, on TV, in print . . . you get the idea.  They are well known for using humor both in advertising and in providing services.  It is a company that is meeting its mission. 

Here's to more fun in 2010!

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Today's lesson is brought to us by WPIX TV out of New York.  They get it.  Sometimes, it pays to give things away.

Merry Christmas!

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