Its Not About The Money

It’s not always about the money…

When I first had the privilege of contributing to PromoCorner a little over three years ago, the folks in charge and I discussed the title for these every-other-week posts. The intended subject matter of the column was to be primarily focused on product safety and, since I had never been a compliance professional, it made the most sense to approach it from the perspective I knew best—that of a retired end-user. For me, delivering safe promotional products had always been framed around protecting the brand. As a result, “The Brand Protector” was launched with that in mind, and it’s the perspective we’ve tried to use ever since.

Brand protection is not always just about the money. You may remember we talked last year about promotional product distributors being asked by Apple to stop selling knockoff phone chargers. If you were involved as a distributor, you know it wasn’t just a request, it was a cease and desist demand, including instructions to recall all product sold and ordering the destruction of all remaining inventory. Apple was busy on the retail front, too. In October of 2017, Apple sued Amazon alleging that 90% of all chargers with the Apple brand sold on Amazon were fake. Amazon didn’t manufacture the chargers, they just fulfilled them, but they did represent that they were original equipment, with most of the chargers in question coming from a company called Mobile Star LLC. Apple’s lawsuit was based on counterfeit cables and chargers not going through consumer safety testing and being poorly designed, making them potentially more prone to overheating and catching fire. Electrocution of users was even a possibility. So why wasn’t this about the money, wasn’t Apple just looking to sell more of its own chargers? Not really. At the time, Apple’s position was more about the broad brush of product failure that these counterfeit products painted on the Apple brand. If consumers ended up with problems with one peripheral product that that they mistakenly thought came from Apple, their overall trust in the brand could be diminished. Buying a phone charger is one thing, not buying the next iPhone because a charger failed, caught fire, or exploded is completely different. The next time your client considers a “knock-off that’s just as good as the original,” perhaps consider bringing up the bigger picture issue to try and direct them towards the real thing. It might save them a lot of headaches down the road.

It also wasn’t all about the money last month, even though Harley Davidson was awarded nearly $20 million in damages in a lawsuit for trademark infringement by T-shirt printer and distributor SunFrog. The motorcycle manufacturer, which sold some $300 million in merchandise last year alone, was awarded damages by the court, which doesn’t yet include an amount for copyright infringement, that is still to be decided. Harley Davidson teetered on the verge of bankruptcy twice, once in the late 60s and then again in the mid-70s, and in both instances, it was the merchandise business now known as Harley Motorclothes that propped the company back up. As you can imagine, Harley Davidson takes protecting intellectual property assets seriously. If you’re not familiar with the SunFrog business model, it might be worth your time to learn a little more. SunFrog does not have its own designs or graphics, but instead allows both individuals and companies to upload their own images, and then sell completed T-shirts, earning a commission from the sale. This model allowed designers to upload designs to the SunFrog platform without Harley Davidson permission, and use those designs on T-shirts that infringed on Harley Davidson’s trademarks and copyrights. This is clearly something that Harley Davidson has every right to care about, as would any brand whose trademarks and copyrighted material is being used without permission.

According to documents submitted in the proceedings, as of May 2017, the SunFrog website featured more than 100 designs with Harley Davidson’s trademarks, even including the most recognizable “Bar & Shield” image. The following month, SunFrog still had 93 infringing designs remaining on its website even after a preliminary injunction was issued. What do you think? Does it seem that SunFrog blew through all of the warning signs and opted not to exercise any due diligence about ownership of designs uploaded and sold through its website? Given the nature of SunFrog’s business model, with total reliance on third-party designs and designers, establishing procedures to vet designs ahead of printing could have avoided the trademark infringement. When your business model relies upon third-party assets, and it pays commission to those individuals or companies when they don’t even own the properties, you’ve created a perfect storm for misuse of trademarks. According to the judge’s order in the case, at its peak, SunFrog was uploading 150,000 designs per day—a significant amount of potential infringement by any measure.

How about you, have you used copyrighted images figuring it was such a small amount nobody would notice? Was it for something you considered a good cause, and perhaps thought the owner wouldn’t mind even if they saw it? Using trademarks without permission is never a good idea, even if it might be for the right reasons. As evidenced by the Harley Davidson v. SunFrog lawsuit, it could end up being a very expensive lesson.