What's Wrong With Competition?

from the can-someone-explain dept

A reader named EmJay wrote in with a snide comment about how we wouldn't write about the following story because it's a case where "copyright and patents made sense." I never understand these sorts of comments. We write about all kinds of cases, and if there were one where an intellectual property lawsuit made sense, we'd be thrilled. It would be an example of the system working as planned: encouraging innovation. That would be fantastic. Unfortunately, EmJay's example is no such thing. It's not an example of the system making sense, but of the system being used to slow down innovation and block competition.

The story involves a guy who started making plastic turkey wishbones for Thanksgiving/Christmas celebrations, so that families wouldn't have to fight over the actual turkey wishbone in the traditional "breaking" of the wishbone. Of course, maybe it was just my family, but I don't recall ever "fighting" over the wishbone. Anyway, the agency Young & Rubicam, which represents Sears, had asked for a sample for possible inclusion at Sears. A year later, Sears was selling a similar plastic wishbone, made by a different company, so this guy sued and won. From the article, the guy says they won on both patent and copyright infringement claims, but that's not true. The lawsuit was over copyright infringement claims only, and Sears made two good points that should have prevailed, in our opinion. First, you can't copyright something occurring in nature -- such as a wishbone. Second, the wishbones that Sears ordered were in different colors and sizes than the ones supplied by the original company.

And, in fact, that's exactly how competition should work. Sears pushed another manufacturer to innovate, designing different (and, in their opinion, better) wishbones. That's competition and that's how innovation works. In fact, the guy from the original company now admits that his company didn't do any updating of their design for years while fighting this lawsuit, and are just now starting to update the design. In other words, all copyright did was get these companies locked in a silly legal battle, rather than focusing on providing better solutions to customers. It's too bad this guy was afraid to compete in the marketplace.

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  1. identicon
    Anonymous Coward, 3 Dec 2008 @ 2:12pm

    This individual engaged in "innovation" as that term is constantly used on this site. He had an idea, he reduced it to a physical embodiment, and he then began manufacturing and successfully selling his product. The fact some might call it trivial is irrelevant...he did the legwork and took it to market.

    This is not a case of some unrelated party wanting to compete in the wishbone-making market. It is a case about a company that approached the manufacturer, asked for and received samples, asked for and received a quote for supplying the product, contacted the manufacturer confirming the quote, asked for some changes to be made and the quote updated, received the updated quote, contacted the manufacturer that all was in order and accepted the quote, repudiated the acceptance of the quote, and then sent the whole kit and kaboodle of samples and packaging to China so that the product could be bought more cheaply.

    The manufacturer lost the sale. Sears turned a tidy profit.

    As luck would have it, the manufacturer was not stupid. He secured a copyright on the article (which is totally proper and valid), as well as on the packaging that accompanied the samples he originally provided. Of course, Sears was deaf, blind and dumb, it likely never occuring to its execs and buyers that stringing a guy along was not a smart business move.

    Sorry, but David did deserve to win under these circumstances, and it was through copyright law that he ultimately prevailed. Mr. Masnick's view on the validity of the copyrights notwithstanding, a federal district court judge came to precisely the opposite conclusion. Why? Likely because he had real evidence in hand, heard extensive arguments by both sides concerning the copyright issues, did independent research to determine how the issues should be resolved, and then informed the parties that the plaintiff was right and the defendant was wrong. Of course, the possibility cannot be discounted that the judge would have held differently had techdirt filed an amicus brief.

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