* In "Serious Damages", Hugo Cox notes for The 1709 Blog a recent Russian decision on the assessment of damages for copyright infringement which, while it looks appealing for injured parties, is highly questionable from a methodological point of view for those of us who like to believe that infringement damages have some factual connection to the principle of compensating the injured rights owner for the damage he suffers;* Also on the subject of damages, in "Interest on damages for infringement not a correctable error", PatLit contributor Jeremy reports on a feeble attempt of a patent infringer to wriggle out of interest payments on damages by claiming that an agreed order, stipulating an 8% interest rate, had not been agreed;
* In "The definite Article?", an IPKat post, the same author takes a peek at an unusual business proposition involving the profitable harnessing of a lot of spare research power for the purpose of invalidating granted patents;
* In "In the pipeline: another Google Copyright Story", copyright expert Jaime Espantaleón offers a sneak preview to jiplp blog readers of some of the thoughts that have motivated him to write on some Google Book proposal money-meets-law issues for the Journal of Intellectual Property & Practice (JIPLP).
Wednesday, 28 July 2010
Monday, 26 July 2010
It is against this backdrop that I refer to an article that appeared in the May 31 issue of Bloomberg BusinessWeek. Under the by-line of Seonjin Cha, the article, "Kia Turns to Design in a Bid to Move Upmarket", discusses the policy decision by Kia Motors to improve the design quality of its vehicle mix and thereby to realize a greater price premium for its vehicles. In a word, Kia seeks to remake its image from what the summary tag line of the article describes as "long-known as a maker of low-priced utilitarian vehicles" to cars known no less for their distinctive design.
To accomplish this, Kia in 2006 hired vehicle designer Peter Schreyer, who had made a name for himself in connection with the "iconic" Audi TT sports car. Schreyer viewed Kia at that time as " 'just another Asian carmaker' without much character." Since joining the company, he has led the revamping of the product line, namely "the revamped Sorento sports-utility vehicle, the Seoul crossover, and the Forte compact", all characterized by "the tiger-nose" feature [can someone help me on what this feature is, please?]
But the current crown jewel is the introduction of the new Optima sedan (it also sports the "tiger nose" feature), which is intended to compete head-to-head with the venerable Toyota Camry and the Honda Accord sedans, but with a price that is $1,600 less than the perenially popular Camry. And so the question: what do we make of all this emphasis on vehicle design, especially against the background of Kia's results for the first four months of 2010. According to the article, Kia enjoyed a 44% increase in year-over-year retail sales. Is that impressive sales figure due to the improved design of its cars or are other factors at work? The article itself is ambivalent.
"Yes" suggests Schreyer, who describes the Optima as an "Italian suit", distinguished by its "simplistic elegance". A further "yes" comes from an automotive consultant, Eric Noble, who gushes that Schreyer has "transformed the company into an industry in design."
And yet, as the article observes in closing, other factors may be at equally, or even more, at work. Most notably, a Swedish car retailer opined that the main reason for the increase of sales of Kia cars is the seven-year warranty introduced this year, together with the seductive price. Maybe that view is unique to the Swedish market, maybe not. The article tantalizingly does not pursue the issue in other principal North American and European markets.
The popular wisdom has seemed to be that the rise of the Korean car industry rests on the uber-branding of price and reliability, antipodal to the perception that negative features that seem to be hounding Toyota. Does rebranding, via an emphasis on design styling, ultimately serve the long-term interests of Kia? Rebranding on the basis of design might increase the feeling of passion for Kia vehicles, but passion has a way of both ascending and descending in rapid trajectory.
And so--maybe the answer is "yes". Spotting a potential vacuum in the more up-scale auto mark, the only way for Kia to go is to occupy that branding position, and the only way to do it is by matching or bettering their competition in styling and design as well.
But maybe the answer is "no". In entering the crowded market for the more up-scale vehicle, will Kia lose its ability to compete in emerging markets such as China, Brazil and India? Maybe the greater margins in the up-scale market will make up for a lesser position in this developing markets. Or maybe Kia will somehow manage to merge up-scale design with developing marketing, and manage to succeed in both markets. If so, that might be a world-beating branding strategy and a landmark contribution for the role of design in achieving this goal.
Sunday, 25 July 2010
Hot on the heels of last week’s post about UK hybrid automotive technology company EVO Electric comes the news that, after six years of litigation, US hybrid automotive technology company Paice LLC has finally reached a settlement with Toyota regarding certain Toyota vehicles found to be equivalent to a Paice US patent.
The litigation has been notable for the refusal of both US district and appeal courts to grant an injunction, prompting Paice to launch proceedings before the US International Trade Commission (ITC), which has the power to bar imports by Toyota. The prehearing conference at the ITC was scheduled for July 15.
“Paice is committed to the ongoing development of hybrid technology and selected research activities,” notes the CEO of Paice in the company’s press release. However, no new patent filings in the name of Paice LLC are indicated on the Espacenet database; rather, all six entries are indicated as having a priority date of 1998. Similarly, the eleven US patents listed on the Paice website all appear to derive from US filings made between 1992 and 1999.
For some views on the ethical rights and wrongs of Paice’s business model, see "Trolling in cleantech-Paice & Toyota settle".
Wednesday, 21 July 2010
A similar emphasis on the part of EVO is suggested by a 1 June 2010 press release to investors, which announces:
“the launch of its new generation of Axial Flux motor and generator technology, which promises to dramatically improve the cost, performance and efficiency of hybrid and electric vehicle powertrains. Applications include hybrid, plug-in hybrid and all-electric vehicles, range extenders, auxiliary power units (APU) and integrated starter-generator (ISG) systems. The new generation of Axial Flux products offers the highest power density among electric motors currently available for automotive applications.”
Monday, 19 July 2010
"Brand Value: What is Your Company Really Worth?" is the title of a short article penned by Kelvin King (Senior Director, Valuation Consulting) for ACID (Anti Copying in Design) and published last month. In the course of his article he writes
"Valuation is an art more than a science and is an interdisciplinary study drawing upon law, economics, finance, accounting, and investment. It is rash to attempt any valuation adopting so called industry/sector norms in ignorance of the fundamental theoretical framework of valuation.
Valuation procedure is, essentially, a bringing together of the economic concept of value and the legal concept of property. The presence of an asset is a function of its ability to generate a return and the discount rate applied to that return. The cardinal rule of commercial valuation is; the value of something cannot be stated in the abstract; all that can be stated is the value of a thing in a particular place, at a particular time, in particular circumstances".
Friday, 16 July 2010
This piece, hosted by IP Finance, has been written by IP blogger Nikos Prentoulis. It reads as follows:
“Open” has taken the tech world by storm and Open-“anything” seems to be the synonym to innovation in the” anything “ area. In this context (or trend), an interesting piece about open-design business strategies was published on Bloomberg Businessweek site some while back. Its authors, Roland Harwood and David Simoes-Brown, are enthusiastic proponents of the idea that “organizations that embrace “open” will innovate better, cheaper and faster”. In presenting key issues of open-design, they discuss the implementation of “IP airlocks” to tackle the fact that “too often, IP regimes can be counterproductive, adding time and other costs into the equation and focusing participants on ownership rather than partnership.” The airlock is described as “an open-innovation competition, where companies invite ideas in response to a clearly defined brief. Brokers—whom we call "trusted agents"—represent both the customer (usually a multinational company) and the innovation community. For a specific period of time, innovators respond to the brief, knowing their ideas are safe from being co-opted by the client, with whom ideas are not shared until the end of the process. At this point, developed propositions are presented to the client, which has a fixed time period—typically three months—to decide whether to proceed. If not, innovators are free to take their propositions elsewhere.”
The authors correctly point out the potential business value of the interdependence between organizations and their network of associates and, most notably, clients, stressing the benefits of this relationship for innovation. They also emphasize the social and business advantages in creating and maintaining a spirit of collaboration and community within such networks.Of course, crowd-sourcing is not without foes. Its drawbacks are said to include added costs, possible failure for lack of monetary motivation, or participation, lack of legal certainty or even difficulties in maintaining “working” relationships. The article leaves am anti-IP aftertaste, based on the (I think erroneous) assumption that the open-“anything” presupposes collaboration while “proprietary-anything” excludes it. Perhaps this debate is somewhat misplaced. I mean that IP airlocks seem to be a useful instrument, but they presuppose IP rights and appear to be (yet another) scheme for protection rather than deviation from the IP regime. Additionally, networking with one’s client’s is self-evidently beneficiary and a crowd-sourcing project may also prove to be a powerful marketing tool, attracting consumers and strengthening business (or even social) ties. But the road from a collaborative project to a business modus operandi appears to be a (very) long one, at least in my mind. The question whether an open or proprietary business strategy is more suited for innovation may be misleading. I would think that it would be the field of the innovation exercise, with its particular bumps and pitfalls, that would point to the appropriate strategy".
Thursday, 15 July 2010
Last Friday this weblog published this short piece announcing the adoption of the UNCITRAL Legislative Guide on Secured Transactions, Supplement on Security Rights in Intellectual Property. We've now heard from Spiros V. Bazinas (Senior Legal Officer in UNCITRAL's International Trade Law Division) that the pre-release version of the IP Supplement is now available. You can access it on the UNCITRAL website here.
Though the Dutch did not win the World Cup final this past weekend, they have succeeded in another area: enticing IP investment with strong tax incentives for companies undertaking R&D. Formerly known as the “patent box”, the recently-amended (as of January 1, 2010) “innovation box” is a tax benefit for Dutch owners of patents or other intangible assets for which a special R&D-qualification certificate has been granted. R&D expenditures are deductible from the general corporate income tax rate of 25.5%. However, once the losses and expenditures have been recouped, assets may be included in the innovation box, through which the tax rate on all corresponding profits, including through licensing, drops to 5%. As there is no cap on the amount of R&D asset profits that are eligible for taxation at the lower tax rate, you can even benefit from the innovation box if and when you sell an R&D asset for significant capital gains.
Generally the income from the R&D asset must be linked to self-development of the asset through R&D within the Netherlands. There are some exceptions for multinational corporations that have operations split between domestic and international locations, so check with your Dutch tax specialist when determining if your R&D asset is eligible for taxation through the innovation box.
Foreigners take note, though sometimes called Holland, the Netherlands is made up of twelve provinces, of which North and South Holland are only two! Its patent office, the NL Patent Office, is located in Rijswijk, on the outskirts of Den Haag (where the seat of government is located) and about an hour from Amsterdam by car or train. Amsterdam is the Dutch capital and its largest city. Its name comes from Amstellerdam, indicating its location as the site of a dam in the river Amstel.
Banks Mansion Amsterdam is an excellent accommodation option. It is located on Herengracht Canal, which is a lovely backdrop for most of the hotel’s rooms. Or for a more quirky, yet charming, accommodation, try Misc eatdrinksleep. It is a small six-room hotel in a modernized 17th-century townhouse overlooking the canal near Nieuwmarkt Square with a private garden in the back. Each room has a king bed and features a different theme for the lovely room décor. Stay at the Hotel Okura Amsterdam if you need to be near the RAI Convention Center. Situated on Amstel Canal, Hotel Okura features a business lounge, conference rooms, four restaurants, two bars, a culinary center (if you’d like a cooking lesson with a professional chef), a fitness center, swimming pool and a parking lot.
If you didn’t already realize, I’ll point out the obvious: Amstel beer is brewed here and named for the river next to which it has historically been brewed. Heineken (which also brews Amstel), Grolsch and Bavaria are also well-known Dutch beers. While in Amsterdam, visit the old Heineken brewery for the Heineken Experience, an interactive tour that shows you how the beer is brewed. Then taste some samples and create a personalized label for your own take-home bottle of Heineken.
Among the many world-class art museums in the city are the Rijksmuseum, the Van Gogh Museum, and the Hermitage Amsterdam. A museum of a different sort, the Anne Frank House is not to be missed. It was here that Anne Frank wrote her famous diary while in hiding with her family. The Anne Frank House is located at Prinsengracht 263, an address that, by virtue of my recall from a visit several years ago, won me a pint of Amstel in a bar trivia contest. Finally, as a daily reader and sometime supplier of information to IP Kat, I must recommend a visit to KattenKabinet. Yes indeed, it is a museum dedicated to cats! John Adams once resided in this building in which the five cats of KattenKabinet now roam.
Of course, no trip to Amsterdam would be complete without a boat ride along the canals. There are many operators that offer short excursions, so set aside some time to arrange a canal boat tour. Also highly recommended: a day trip to Delft, a historical town famous for its beautiful blue and white pottery, known as Delftware. Delft is located very near Den Haag and Rijswijk, so it’s a good place to visit before or after conducting business at the NL Patent Office. And, as the name of this post suggests, tulips carry a significant importance in the Netherlands; they are a symbol of the country that you must see and enjoy while in the country. If you are in the Netherlands during springtime, visit the Keukenhof Flower Gardens in Lisse (about half way between Amsterdam and Den Haag). This flower garden is the world’s largest – wear comfortable footwear to amble through fifteen kilometers of walking paths among seven million flowers, 4.5 million of which are tulips of every color!
Readers, where should I visit next? Let me know your thoughts!
Wednesday, 14 July 2010
It seems that the issue is being resolved in the context of the financial services legislation ("Wall Street Reform and Consumer Protection Act", known fondly as the "Dodd-Frank Act" in honor of its two main Congressional sponsors) that is apparently in its last legislative phase before securing final Congressional approval. One of the issues in the legislation has been an attempt to "rein in" the trading of derivatives, principally by creating exchanges intended to make the terms of such derivatives more transparent to the parties.
But it appears that enhanced transparency via public exchanges is not the only way that the legislation seeks to regulate the trading of derivatives. Another tack is simply not to allow exchanges to operate at all, at least for certain kinds of instruments. Among the victims here seems to be the nascent (read: still-born) effort to create an exchange for derivatives based on box-office receipts. That seems, at least, to be the case as reported by ML Strategies of Washington, D.C., in its June 28 update on the legislation. The report states:
"In a big win for the Motion Picture Association of America (MPAA) and most of Hollywood, the financial reform conference committee voted to retain Sen. Lincoln’s language banning futures contracts on box office receipts. As recently as Monday, the CFTC had announced a narrow decision that would haveallowed the Cantor Futures Exchange to trade a derivative based on the motion picture The Expendables.Though the CFTC found this contract to not be in violation of the Commodity Exchange Act, reg reform conferees bowed to pressure from the movie industry to quash the new investment market before it even began.The movie futures contracts were intended to allow film investors to hedge their financial commitment,but key players in Hollywood objected to the concept because of its potential to give shorting investors an incentive to sabotage a project."
One of the best ways of generating quality earnings from a trade mark is by licensing its use under a business format franchise. In theory, once the business formula is tried and tested, the franchise becomes a licence to print money: the licensee invests in premises, equipment, hardware and labour, while the licensor -- while receiving sign-on fees, possible service and consultancy retainers and regular royalty payments --advertises the franchised service and reaps the benefit as the brand equity just keeps rising.
"... the case serves as a warning to franchisors who seek to take advantage of a franchisee's request for consent to an assignment of the franchise agreement. A court may find unconscionable conduct if consent is used as a lever to extract a better bargain than was originally made by the parties to the agreement, although it appears that evidence of bad faith may be required, as an erroneous construction of a contractual right will not in itself be unconscionable. However, careful drafting of the franchisor's contractual rights with a consideration of both this decision and Clause 20 of the Franchising Code may provide franchisors with greater flexibility in relation to the terms by which 'new' franchisees introduced under a transfer are bound".
Monday, 12 July 2010
One such example can be found in a recent article that appeared in the 19 June issue of The Economist ("Good and Hungry: The Changes Facing Fast Food"). Here, innovation is about the challenges arising from increasing public concern regarding obesity in the population. In particular, it is about changes to the information appearing on the menu of fast food restaurants and the role that both government action and restaurant brands may play in connection with these changes.
The main thrust of the aricle described the attempts of the fast food industry to struggle with the double challenge of the recession and increasing criticism of the nutritional value of the usual fast food fare. Toward the end of the article, there was a brief consideration of how government regulation might also impact on the fast food industry. In that connection, the article referred to a bill passed earlier this year by the U.S. Congress, which requires restaurant chains of a certain size to indicate on their menus the calory count of their items. The article continued:
"A study by the National Bureau of Economic Research, which tracked the effects on Starbucks of a similar calorie-posting law in New York City in 2007, found that the average calorie count per transaction fell 6% and revenue increased 3% at Starbucks stores where a Dunkin' Donuts outlet was nearby-- a sign, it is said, that menu-labeling could favor chains that have more nutritious offerings. In order to avoid other legislation in America and elsewhere, fast-food companies will have to continue innovating."What is interesting here is that the relationship between the regulation and the
competitive advantage of the two brands. We are not told in the article whether there was a drop in the average calorie count per transaction at the Dunkin' Donuts outlets that were paired in the study. Assuming that there was a drop in the average calorie count, this suggests that, despite the fact both chains attempted to meet at least some of the criticism regarding the nutritional value of their respective menus, Starbucks seems to have gotten the better of it at the till.
If that is the case, then this further suggests that the Starbucks brand took advantage of the fact that, on a relative basis, it is anyway perceived as offering a less weight-inducing fare than its Dunkin' Donuts competitor. When, to this existing relative perception in favor of Starbucks, there is added a public policy preference for nutritious menus, the relative advantage of the Starbucks brand is enhanced. This is so, even if on absolute basis, both the Starbucks and Dunkin' Donuts menus reveal innovative steps to satisfy the public demand for more nutritious menus.
The upshot is that the regulation arguably conferred a commercial benefit to the Starbucks brand, even if it was intended to be competitor-neutral. This is the result, even if the changes/ innovations to the Dunkin' Donuts menu are shown to have a greater effect on the nutritional value of is menu than the changes of Starbucks to its menu (which may or may not be the case).
In such a situation, the closing comment in the quote above from The Economist--"In order to avoid other legislation in America and elsewhere, fast-food companies will have to continue innovating"---may not be entirely true. For Starbucks, at least, continuing innovation by Dunkin' Donuts in this direction may have the effect of eroding the comparative advantage of the Starbucks brand from the point of view of perceived nutrition. Innovation, if mandated by further regulation, might then end up conferring an advantage to Dunkin' Donuts. What regulation in the name of innovation giveth, such innovation and regulationm ay ultimately taketh way. It certainly will be interesting to follow this development.
Friday, 9 July 2010
According to a United Nations Commission on International Trade Law (UNCITRAL) press release, on 29 June the "UNCITRAL Legislative Guide on Secured Transactions, Supplement on Security Rights in Intellectual Property" was adopted. This Supplement is the third text prepared by the Commission in the field of secured transactions law, following (i) the UNCITRAL Legislative Guide on Secured Transactions and (ii) the United Nations Convention on the Assignment of Receivables in International Trade (2001).
The Commission's Working Group VI (Security Interests) has been working towards this draft since 2007, recognizing that States need guidance as to how the recommendations of the Guide apply to IP and as to the adjustments they must make in order to avoid inconsistencies between secured transactions law and law relating to intellectual property. The Working Group, after five one-week sessions, completed its work in February 2010 and the Commission, at its forty-third session, finalized and adopted the Supplement. According to the press release
"The overall objective of the Guide is to promote low-cost credit by promoting access to secured credit. In line with this objective, the Supplement is intended to make secured credit more available and at lower cost to intellectual property owners and other intellectual property right holders, thus enhancing the value of intellectual property rights as security for credit. The Supplement, however, seeks to achieve this objective without interfering with fundamental policies of law relating to intellectual property. States are recommended to utilize the Guide and the Supplement to assess the economic efficiency of their secured transactions regimes as well as their intellectual property regimes and to give favourable consideration to the Guide and the Supplement when revising or adopting legislation relevant to secured transactions and intellectual property ...".I've not yet read this Supplement, but wonder if anyone who has read it might be able to shed any light on its content and on whether it has addressed the anxieties that IP owners have consistently expressed in the recent past over the apparent mismatch between lenders' and IP-ers' interests. A 17 March draft is available on the UNCITRAL website here, and it has various appendices which are listed here, together with comments by governments and international organisations (including WIPO), but I don't know if these represent the final form of the Supplement. Can any reader please advise?
Wednesday, 7 July 2010
Back from a holiday leading up to the Independence Day weekend in the U.S., I’d like to focus this week on Luxembourg. Luxembourg (officially the Grand Duchy of Luxembourg), like Belgium, grants domestic IP owners an 80% tax exemption on income from the exploitation of qualifying IP. This may often bring a company’s effective tax rate to just over 5%. The IP that is the source of the income may be developed by the company itself or acquired from a third party. Perhaps these tax benefits have helped Luxembourg achieve its status of having the highest Gross Domestic Product per capita in the world?
Only 2,586 square kilometers and bordered by Belgium, France and Germany, it’s no surprise that Luxembourg’s official languages are Luxembourgish, French and German. Sorry, native English speakers, you’ll need to brush up on your Romance or Germanic language skills prior to your visit.
You can occupy your free time with many activities if you find yourself visiting Luxembourg’s capital city, Luxembourg City, twice named European Culture Capital. A must see, the Grand Duke Jean Museum of Modern Art, aka the Mudam Luxembourg, stands on the site of Fort Thüngen, which was mostly demolished as a stipulation under the 1867 Treaty of London. The remaining parts of Fort Thüngen, known locally as “The Three Acorns” because each of the three remaining towers is topped with acorn statues, provide an interesting juxtaposition against the glass and steel Mudam building. (See photo, right)
The Casements du Bock, a UNESCO World Heritage Site, is a network of underground fortifications, originally consisting of 14 miles of defensive passageways. This site, which dates back to 1644, today features an archaeological crypt that presents visitors with an audiovisual presentation about the site’s history. A section of the Casements has been converted into a summer meeting facility for up to 100 people – a very interesting and unique location to book any client events you might be organizing.
Where to stay? Le Royal Luxembourg is a great option for a business traveler, with rooms and suites, a business center, two restaurants, one bar, a beauty salon, spa and fitness center.
Luxembourg has more Michelin-starred restaurants per capita than any other country. I won’t suggest any here; you can choose based on the type of cuisine that suits your mood here.
Conveniently, Luxembourg City is a “HotCity” that is WiFi friendly. Connect to the city’s WiFi network free for tourism-related services or for a relatively low fee for all other online needs.
Unless you’re a long distance runner, like me, you should probably try to avoid traveling to Luxembourg City for business in late Spring, when the ING Europe Marathon takes place in Luxembourg City, shutting down many streets and filling hotels with marathon runners and their families. In 2011, the race is scheduled for June 4.
Finally, wine lovers should take a side trip to the Moselle Valley, the country’s wine region. There are many vineyards; a few to try are listed here. Or hide away for a day (or a few) at a spa retreat and casino at Mondorf Domaine Thermal.
Tuesday, 6 July 2010
"Accounting for IP?" is the title of an article in the current issue of the Journal of Intellectual Property Law & Practice (JIPLP) by Dr Roya Ghafele (University of Oxford). Roya takes a provocative view of the role played by the discipline and culture of accounting within the world of intellectual property. The abstract of her article gives a clue as to her line of thought:
"Legal context: Accounting constitutes a very specific form of language. Unlike literature or political language, the language of accounting is highly standardized, mathematical in nature and seeks to uniformly and systematically describe events while avoiding expressions of individual creativity or explicit political positions. It is a highly formalized vernacular that documents past performance rather than expectations of the future, preferring the past tense over the future tense. It is a utilitarian language, only employed to achieve specific purposes and document certain contexts. Accounting does not just simply map business, or objectively mirror an existing, pre-defined business context; rather it creates that business context by offering a complex system of representation. In this sense accounting is a social, cultural and historical artifact rather than a natural or technical phenomenon and it can therefore be viewed as the decisive instrument to create and maintain imagined business communities.
Key points: On the balance sheet IP experiences a specific form of authorization. Life is brought to IP by providing a system of stable semiotic orders and discursive selectivity that serve a specific reproduction of complex socio-economic orders. IP is represented in the discourse of accounting by ‘intangibles’, an imprecise term associated with the increasingly observed ‘gap between the market and book value’. For a discourse analyst the phrase ‘closing the gap between the market and the book value’ in and by itself reveals that current accounting systems are to a large extent determined by a tangible assets’ based perspective and offer little scope to document how IP relates to business performance.If you feel uncomfortable about the accounting side of IP and want some intellectual support by way of reinforcement of your visceral feelings, this is just the piece for you. Non-subscribers can buy the right to read this article by clicking here and scrolling down to 'purchase short-term access'.
Practical significance: Accounting may thus be seen as a gatekeeper of the status quo that poses significant challenges for IP-rich companies, which are confronted with the challenge to either communicate around the lingua franca of accounting or accept that under current accounting statements they cannot adequately document how IP relates to their business performance".
Sunday, 4 July 2010
As cogently explained to me, for gamers, the amounts expended on virtual goods have to be compared with an alternative expenditure for other forms of entertainment. Compare the $20-dollars or more (choose your exact price, local currency and exchange rate) paid for a two-hour movie with the cumulative engagement of a game such as Farmville, where each single outlay for a virtual item is a mere fraction of the cost of the movie. At the end of the day, there is no real difference between paying for two hours of pleasure via the celluloid screen and the untold hours tending to one's virtual farm and ensuring that you have the necessary implements to do so. Both are popular forms of entertainment based on the enjoyment of a vicarious reality.
One aspect of this gaming experience was tantalizingly described in the TechCrunch article mentioned above, namely, the role of trade marks and brands as a part of the effort to monetize virtual goods. Permit me to quote Chahal on this point as follows:
"Brands are already a prominent part of the social Web. Facebook users post branded gifts on each other’s walls—paid for with real money—and become fans of those brands’ pages. And why wouldn’t they? The essence of social networking is the expression and projection of one’s identity, and brand affinity is a central theme of nearly every modern consumer’s persona. Why buy a Gucci dress when you can get the same look from DKNY or even J Crew? Because it helps you express something different, and feel better doing it. Virtual goods are no different, except they are don’t cost as much. Already, branded virtual goods are clicked ten times more often than non-branded equivalents. In this light, it isn’t hard to visualize the virtual marketplace of the near future. (Emphasis added).
As more real-world brands in more categories extend into the virtual marketplace, branding will increasingly seem like the norm, pushing unbranded virtual items down in status to the level of store brands and generics. For some consumers, this provides the opportunity to replicate their existing brand relationships; for others, virtual items can help satisfy the desire for their unaffordable real equivalents. (Emphasis added). The hottest brands will command the highest prices, even if practically indistinguishable from lesser labels and knockoffs—just as in the real world."
Find the Virtual Superbrand
The thrust of these comments seems to be that the most successful brands in the virtual goods world will be derived from their three-dimensional countparts in the tactile world. Moreover, unlike the tactile world, the financial likelihood of success in the virtual world for marks that are anything less than these superbrands is slim. Assuming that I have understood Chahal point(s) here, permit me to make the following observations:
1. Superbrands are characertized by careful nurturing and monitoring of their owners. It is not clear to me how this "tender loving brand care" is supposed to be transformed in the social networks/virtual goods world. Instead of an utopian outcome, I could plausibly foresee the opposite. Thus, uncontrolled use of valuable brands in undesirable virtual settings could have a deleterious, if not worse, affect on the value of the brand, especially given the huge number of players engaged in and exposed to these brands.More on Farmville here.
2. Instead of an uncontrolled and possibly destructive nexus between brand use in the tactile and virtual worlds, might it not be the case that brands will develop solely in connection with virtual goods. That is to say, might not some enterprising entrepenuers see their ultimate product offering in the virtual world not as an array of farm implements, or virtual replications of three-dimensional luxury brands, but rather the development of brands whose sole context is the social network world. Just as with a strong fanciful mark that is successfully used in connection with a widget, so too might the day not be too far away where a strong fanciful mark is developed in connection with a virtual widget. Aldous Huxley--here we come.
More on Aldous Huxley here.
Thursday, 1 July 2010
A media alert from the World Intellectual Property Organization (WIPO) this morning announces a forthcoming technical symposium, "Access to Medicines: Pricing and Procurement Practices", which the World Trade Organization (WTO) is to host in Geneva, Switzerland, on 16 July.
"The purpose of the symposium is to learn what international and regional agencies have experienced in the pricing and procurement of medicines as important determinants of access. It will also provide an opportunity to discuss where to obtain information on access to medicines, their prices and their availability. The core questions are about drug procurement, pricing and relevant intellectual property issues. The discussions will be technical, serving as a forum for participants to share information, views and practical experiences.Registration details (sign up by 14 July, please) are available here.
This event should lay the groundwork for continuing dialogue among the collaborating organizations. Draft program here ...
Participants are expected to be Geneva-based delegations to the WHO, WIPO and WTO, representatives of international and philanthropic initiatives on the procurement of medicines, civil society organizations, and industry representatives.
... the event will be held in English only; no interpretation will be available. Participation in the symposium is open to all interested individuals and organizations, subject to availability of space ...".