Branding In The Collaborative Economy: Are Intellectual Property Rights At Risk?

Feb 6 2014, 1:41pm CST | by

There’s an event going on today at Union Station in Kansas City, Missouri called The Resilient Summit.  It is described as an examination of the “Collaborative Economy,” which is being called  “a key trend that’s redefining established business models, empowering consumers and driving the next phase of social.”   How can Collaborative Economy have anything to do with Intellectual Property?

As it turns out, plenty.

The Collaborative Economy is a term we’ve seen cropping up with more and more frequency in the commercial and social media.  The Collaborative Economy is described as an economic system where consumers prefer to share, rather than purchase, goods and services.

Stop right there.  In a consumer-oriented economy, where the idea is for people to consume, changing the paradigm to sharing would seem to imply a lot less consumption.  Economically, it may remain to be seen whether there is less consumption or just different consumption, and perhaps different revenue models under which the overall consumer economy still expands.

Intellectual Property law has focused on how to let inventors, artists, authors and businesses protect their rights while generally selling their goods and services.  What is the tension between protecting “sales” and the collaborative model of sharing?  How do brand owners maintain and protect their valuable intellectual property assets in the collaborative marketplace? 

A lot of us know that instead of purchasing a car, someone who needs a car only occasionally can share a car through www.zipcar.com.   Or, a consumer from Detroit who wants to visit Paris for a week’s vacation can use www.airbnb.com instead of finding a hotel room.  Some brand owners have tried to figure out how to jump ahead of the curve and share, instead of sell, their products.  Patagonia’s and eBay’s Common Threads venture enables consumers to recycle “Patagonia” brand outdoor clothing from one user to another.  Toyota has started leasing cars for short term periods.   So in these instances, it seems pretty clear that trademarks may become more important than ever in a sharing economy.   People rely on the trademarked name as an assurance of quality.  Trademarks will signify quality, authenticity and predictability.  They may function in different ways, but the value of a trademark – an indication of origin – is still front and center.

Advertising and marketing are traditional concepts for extending a brand’s reach. As the Collaborative Economy shifts more power out of the hands of marketers and into those of consumers, how will brands be able to advertise and market lawfully? What steps will brands have to take to reach consumers without exposing themselves to undue risk?  Social media strategies did not fit into traditional marketing until the past couple of years.  But testimonials like the experiences of friends and other consumers are key marketing components for the Collaborative Economy.  Advertising that includes references to these experiences is still subject to regulation by the FTC and the various state rules.  Disclosure rules regarding who is talking about your product and why, and if they are getting any money or other benefit, are also going to be front and center.

When we get to traditional concepts of patent and copyright protection, there is the potential for fundamental distribution by sharing.  Patents and copyrights have both been around in this country for well over two centuries.  Both types of property rights were established directly in the Constitution (you could look it up: it’s right there in Article I, Section 8, Clause 8, “…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 worthy bargain between encouraging invention and creation in exchange for giving inventors and authors various terms of exclusivity has always been favored by our laws.  An economy which relies in re-using rather than selling creates new challenges.  The digital economy has already exposed some of the weaknesses of the existing law in the music and publishing industries.  Will collaboration finally push a major overhaul of copyright law principles?  It may.  But for now, copyright owners will have to consider how entrenched legal principals such as a fair use right to copy the works of others will work into the equation.   For now, copyright owners might want to take more and innovative licensing approaches, including limiting the duration of rights which they grant, to find ways to explain this potential new collaborative marketplace. 

Patents are property rights which already lend themselves to licensing.  Collaboratives might be a boon to sharing via patent licensing arrangements.  Might manufacturers rent rather than buy?  Can they join in a pool of patents to help expand their scope and streamline enforcement efforts?   There are legal boundaries that apply to some of these methods, and patents are already under wide-scale attack.  Does collaboration prove an opportunity to change the dialog? It might, especially when considering patent-laden technologies like 3-D printing, which are on the verge of bringing massive changes to whom consumer goods are valued and delivered.  And of course, if some entrepreneurs start patenting methods of sharing, we’ll be having a whole ‘nother discussion, still.

People protect their intellectual property rights as a threat which helps keep copiers at bay, and as a weapon with which to attack when that threat fails to keep an infringer from testing the boundaries of protection.  Or, perhaps more realistically, when a buck is to be made by any means possible.  Will consumers be unable to distinguish this, in a sharing marketplace, between genuine goods and knock-offs?  If the sources of products are changing, where is the reassurance going to come from that the goods are genuine?  If a shopper buys a bag at Louis Vuitton, there are some good reasons to believe the product is the genuine article.  In a collaborative setting, what assurance is there, besides the buyer’s word?

The Collaborative Economy may well just be starting.  It may be the next big thing.  Companies can consider whether they can join the Collaborative Economy in a way that uses their intellectual property to build trust.  Companies will need to stay ahead of the consumer and legal curve to insure they know the impact on their intellectual property rights.

Source: Forbes Business

 
 

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