Tag Archives: trademarks

05.01.2013 | Intellectual Property: China’s Michael Jordan Trademark

The Wall Street Journal had a great headline: “In China, Air cheow-DAN Cries Foul.”

Saying, “I felt the need to protect my name, my identity, and the Chinese consumer,” Michael Jordan is suing the Chinese firm Qiaodan for using his name as its trademark. Pronounced cheow-DAN in Mandarin, the firm sells basketball shoes and jerseys in its 5700+ outlets.

Michael Jordan

Michael Jordan is not alone. Apple for the iPad, Hermes, and General Motors saying the Chinese name Chery Automobile was like Chevy, have also battled the Chinese to preserve their trademark rights. Soon Jeremy Lin might have the same problem. A Chinese firm paid $708 for the rights to his name from a Chinese trademark office (not Lin).

An economist would say that we have a classic free rider problem. Firms copying trademarks are benefiting from the real owner’s designs, time, quality control and reputation.

We should add that all WTO (World Trade Organization) members are required to observe trademark recognition rules in TRIPS (Agreement on Trade-Related aspects of Intellectual Property). China is a WTO member.

Sources and Resources: This FT blog has best summary of the trademark battles in China while you might find this textbook excerpt ideal for some trademark background. For more specifics on the Michael Jordan suit, this WSJ article and this Quartz article provide the details. Meanwhile, in “Sole Rights,” econlife looked at a trademark battle in the US.

Posted by: adminEcon
Tags: China, free rider, intellectual property, Michael Jordan, trademarks, TRIPs, WTO (World Trade Organization
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09.08.2012 | More (or Fewer?) Sole Rights

A book that you write is your intellectual property. But what if you design the sole of a shoe?

As econlife described last year:

“The trademark of designer Christian Louboutin, his red soles are supposed to represent glamour, luxury and hidden status. Or, as stated by Mr. Louboutin, ‘A shoe has so much more to offer than just a walk.’

Agreeing, fashion house Yves Saint Laurent (YSL), designed its own line of luxury shoes with colored soles and wound up in a Manhattan courthouse. Louboutin claimed trademark infringement. Saying a red shoe sole is “ornamental and functional,” the court supported YSL.”

But now, most of the decision has been reversed.

A federal court of appeals has said that except for a monochromatic red shoe, Louboutin and only Louboutin has the right to a red sole. Saying that, “We hold that the lacquered red outsole, as applied to a shoe with an ‘upper’ of a different color, has ‘come to identify and distinguish’ the Louboutin brand and…qualifies for trademark protection.”

If your can call the sole your intellectual property, what about the shoe?

Probably not. Like jackets and pants and shirts, shoes are too utilitarian to be protected by intellectual property laws. We all have the right to copy their design. (Please see below for more on what is protected.)

A debate that we can trace back to Alexander Hamilton, James Madison and Thomas Jefferson, the question about whether and how long we can own what we create has been timeless. While patents, copyrights and trademarks can propel a market economy, sometimes they constrain progress.

For fashion, experts like Johanna Blakley believe a copycat culture is good.

Sources and Resources: You can see both sides of the fashion industry “copycat” debate at econlife, here and here and read more about both court cases here and here. In addition, I recommend this wonderful TED talk and a more serious econtalk interview from Johanna Blakley. For more on Christian Louboutin, this New Yorker article was an especially good read.

copyright protected and unprotected industries

Fashion and other industries without intellectual property protection from TED talk, Johanna Blakley

Posted by: adminEcon
Tags: Alexander Hamilton, Christian Louboutin, Constitution, copyright, fashion, fashion copycats, fashion designers, furniture, intellectual property, patents, red soles, shoes, trademarks, YSL
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09.26.2011 | Tweet Rights

Does “Nutcracker Tweet” bird seed have the right to Tweet?
Is it okay to name your birdhouse firm “Tweet Tweet Home?”
Can your app say Tweet?

It all depends on the US Patent and Trademark Office.

Twitter wants the tweet trademark. It is suing Twittad to get it. Here is the story at techcrunch.

The Economic Lesson

Whether looking at Louboutin’s red soles, music copyrights, or a tweet trademark, business firms like exclusivity. Think of a competitive market structure continuum in which perfect competition is at the far left and monopoly is at the other end. Moving firms away from a perfectly competitive market structure where products are identical or similar, exclusivity takes them closer to oligopoly and monopoly. As firms move to the right on the scale, they gain greater control over their identity, pricing, and how they will communicate with consumers.

An Economic Question: The US Patent and Trademark Office told shoe firm Louboutin that it had no exclusive right to its red soles while Tweet can be trademarked. Explain why you think the decisions differ.

Posted by: adminEcon
Tags: competitive market structures, Louboutin, trademarks, tweet, Twitter
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08.12.2011 | Sole Rights?

Suddenly, a red sole has become much more than the bottom of a shoe. The trademark of designer Christian Louboutin, his red soles are supposed to represent glamour, luxury and hidden status. Or, as stated by Mr. Louboutin, “A shoe has so much more to offer than just a walk.”

In a TED talk, Johanna Blakley explains that a jacket and most other clothing cannot receive intellectual property protection because they are “utilitarian”. A logo on the jacket can be protected but not the jacket or shoe. Contrary to what I would have expected, she believes that the industry is helped by the absence of protection. Copying begets trends; copying stimulates innovation. The threat of copying makes people repeatedly move onward to newer, better, and more unique designs.

Here and here in past econlife posts, you can read more about fashion copycats.

The Economic Lesson

Shoe designers compete in monopolistically competitive markets. The characteristics of monopolistic competition include many sellers with a similar product, sellers creating an individual, unique identity, and sellers having some control over price. The competitive behavior of beauty salons, supermarkets, and clothing manufacturers is also shaped by a monopolistically competitive market structure.

From most competitive to least competitive, the four basic competitive market structures are: perfect competition, monopolistic competition, oligopoly, monopoly.

An Economic Question: In a monopolistically competitive market, why have Louboutin’s red soles been valuable?

Posted by: adminEcon
Tags: Christian Louboutin, competitive market structures, copyrights, fashion, monopolistic competition, patents, trademarks, YSL
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