Combine either corned beef, pastrami, turkey or salami with 2 large latkes (potato pancakes) and you have a $24.95 lunch that Manhattan’s 2nd Avenue Deli calls its Instant Heart Attack Sandwich.
Because the Heart Attack Grill of Las Vegas threatened a trademark infringement suit, the Deli wanted to be sure it had a right to use cardiac themed names. The opinion from the US District Court was yes. No one will confuse the Las Vegas triple bypass burger and fries made from lard with food from a kosher deli.
A trademark dispute is all about intellectual property rights. Think for a moment about Apple’s logo or the shape of a glass Coca-Cola bottle or the McDonald’s Golden Arches. All defined as trademarks, they are someone’s intellectual property because they identify the source of a product. In the 2nd Avenue Deli case, since there was no chance of confusion, a trademark was not violated.
In a market system trademarks, patents and copyrights are crucial sources of incentives that encourage innovation.
The result? The 2nd Avenue Deli is now innovating with its Triple Bypass, a 3-latke meat sandwich for $34.95.
You can read more about the lawsuit in this Reuters article while here is the actual decision and here is an econlife post on the red shoe sole trademark fight between YSL and Louboutin. Finally, here is a menu from the 2nd Avenue Deli.
When do we own what we create? It depends.
For Bruce Springsteen and Billy Joel, hit albums controlled by record companies might soon become theirs again. During the mid-1970s, the Congress decided that after 35 years, a musician could regain the copyright held by a record company by following a specified procedure. Called termination rights, the copyright switch can begin in 2013 for Billy Joel’s “52nd Street” and Bruce Springsteen’s “Darkness on the Edge of Town.” The NY Times provides a list of some of the performers who might benefit and also reminds us that record companies will probably contest the artists’ claims.
In this Econtalk discussion, you can decide whether you agree with an author who complains that his family cannot inherit an unending copyright for his work.
The Economic Lesson
Trademarks, copyrights and patents protect intellectual property. With Article 1, Section 8, Clause 8 saying, “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” the US Constitution established the right to protect innovation.
Interestingly, although Hamilton and Jefferson did not entirely agree, both were involved with the first Patent Act in 1790.
An Economic Question: Being able to restrict use of someone’s ideas can hinder and fuel progress. Explain.