Can You Really Own The Idea Of Making Your iPhone Look Like Beer?

from the drink-up! dept

It's time to raise your glasses in a toast to ridiculous intellectual property lawsuits. Or, if you don't have a tasty beverage on hand, perhaps a virtual one, say, on your iPhone? Well, unfortunately for you, that may be a problem -- as the latest ridiculous lawsuit concerns two competing virtual beer applications, both of which make your iPhone look like the side of a full beer glass, that will "drain" the beer, as you tilt the iPhone. Cute, gimmicky app, right? Except if you're a pissed off developer who seems to think that only one person should be allowed to make such an app. A company called Hottrix that made such an app is suing the beer company Coors for an astounding $12.5 million for offering up a similar app of its own.

Hottrix's app, iPint, cost money, whereas Coors (perhaps implicitly recognizing how infinite goods -- the silly app -- can help sell more scarce goods -- beer) gave its app, iBeer, away for free. The Coors version was more involved, as it also included a "game" where you needed to guide a sliding pint across a bar into some waiting hands. Hottrix's lawyers claim that the idea of such a virtual beer glass is copyrightable -- which seems fairly questionable. Concepts can't be covered by copyright. It needs to be the exact implementation, and as long as the Coors version was different, then it's difficult to see the copyright claim. Hottrix also pulls out the bogus argument that iPint hurt iBeer's sales. That's simply incorrect. It wasn't Coors that hurt Hottrix's sales, it was Hottrix, for having a bad business model. Competition isn't illegal.

But, of course, Apple in its infinite (loop) wisdom, removed the Coors app after Hottrix complained, thus protecting Hottrix from its own business model mistake. And yet, Hottrix still wants $12.5 million from Coors for daring to come up with a similar idea. You have to hope this gets thrown out of court quickly.

Filed Under: apps, beer, copyright, iphone, virtual beer
Companies: coors, hottrix

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  1. icon
    Mike (profile), 16 Oct 2008 @ 11:44am


    But seriously, you keep claiming things are "infinite goods". You seem to have a problem with people selling anything other than physical goods.

    Two points:

    1. I don't have a "problem" with it. I just think that trying to sell infinite goods is a highly risky business model that is likely to fail in the long term, as someone else figures out a business model that involves giving away infinite goods. You can *try* to do it. I just don't think it's a very smart business model. It's not like it offends me or anything.

    2. I want to be quite clear on this: scarce goods are NOT the same thing as physical goods. I have NEVER said you should only sell PHYSICAL goods. I said you should be selling SCARCE goods, and there are plenty of scarce goods that are not physical goods: time and attention being two of the biggest ones.

    I work in the software industry and according to you we sell infinite goods. I hope you understand the amount of manpower that goes into developing a suit of applications. I promise you it is not an infinite good, without money for developers you will have no product.

    Those are two separate issues. The cost of development doesn't make one iota of difference in terms of whether a product is infinite or not.

    I don't want to put words in your mouth but you seem to think that the software itself could not be a valuable product

    You shouldn't put such words in my mouth because they're absolutely wrong. I have never, ever said that software is not valuable. In fact, I think exactly the opposite. Software is VERY valuable, but value is different than price. Price is determined by the intersection of supply and demand, and if the supply is infinite... price gets driven down, no matter what the value.

    Air is valuable to you, but you don't pay for it.

    So, the trick, from a business model perspective is to take the VALUE in software, and use it to increase the value of some SCARCE good whose price won't be zero. In other words, you use it to differentiate, and pump up what people will pay for a *scarce* good (which, again, is different than a pyhscial good).

    I beg to differ, I think the cost of physical goods will continue to diminish until they approach zero

    That would go against pretty much every single lesson of economic history, but ok.

    What you might be trying to say, is that the price of any good (physical or not) will diminish towards its marginal cost (which isn't quite accurate either). But, you won't see prices of goods decrease below their marginal cost, other than perhaps temporarily.

    As for the issue of convergence, I think you'll discover that even as devices converge, the more uses that are created because of them will actually lead you to pay more money for them. My phone now accesses the internet, but I pay more for that service (access, another scarce good).

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