Fidget Spinners – A Cautionary Tale
If you have kids under 10 years old you are likely to have heard of the Fidget Spinner. Its the latest craze sweeping across playgrounds in the US and UK.
As kids crazes go, I have seen worse. Prices start at £2.99 and the Spinners don’t make a noise, don’t make a mess and wont numb the brain but, as with all these fads, the kids will no doubt move on to the next shiny new thing within weeks. When this happens, it will be interesting to see who has gained most from the millions of these Spinners currently being sold. For me, this is the most interesting part of the story and one that teaches an important lesson to innovative companies around the world.
The Fidget Spinner was invented by an American lady called Catherine Hettinger back in 1997 and, with a great deal of foresight, she patented her invention. However, as with many unfunded inventors she had real trouble convincing toy manufacturers to make the product and by 2005 she had given up trying. Crucially, she let the patent lapse because the $400 renewal fee were seen as too great an investment.
So when 12 years later the Spinner became ubiquitous in both the US and UK you would understand if Ms Hettinger was somewhat depressed at missing out on a fortune. But apparently not. She claims she is just happy that the Fidget Spinner has seen the light of day and been such a hit.
So the purpose of this article is both to commend Ms Hettinger for her equanimity but also, because we are an IP blog, to consider what she should have done to ensure that when the tills started ringing, she was the one who profited.
Well, keeping up with the patent renewal fees is the obvious first step. This would have allowed her to assert her rights and recover damages. However, it is worth pointing out that the patent would have expired this year (20 years after filing) and it would not have prevented copies being sold outside of the US. Nevertheless, Ms Hettinger could certainly have recovered damages way in excess of the renewal fees she was unwilling to pay.
Patents though are expensive to acquire and maintain so its always important to consider other cheaper rights when deciding how to protect your products. In this case, both design rights and trade mark rights could have come to Ms Hettinger’s aid. Both are far cheaper to obtain than patents and both can be easier to enforce. So, with the benefit of hindsight, in addition to keeping up with her patent renewal fees, Ms Hettinger should have considered trade marking the name ‘Fidget Spinners’ to protect the brand and also register the design of the product, thus giving her additional layers of protection at not much more cost.
So this is a cautionary tale. If you are an innovative business that has come up with a new product or design, think carefully about the myriad ways you can protect your hard work so that if, one day, it does become the next shiny new thing, it is you that reaps the rewards and not some opportunist copycat.
Future Tech IP Summit
We are excited to be exhibiting at the Future Tech IP Summit on 27th November in London. It promises to be a fascinating look at the importance of IP to Tech start ups and if you are attending please come and say hello. It will be great to discuss how to protect these vital assets.
The Slow Death of Innovation
This week I came across another story to strike fear into hearts of designers of innovative products sold in supermarkets in the UK. Aldi are accused of copying a changing bag designed and sold by Bababing, a British company producing high quality products for babies.
Both I and the Managing Director of Bababing, Nick Robinson appeared on the BBC’s Victoria Derbyshire Show to discuss Aldi’s behaviour and what can be done to stop large companies ripping off SMEs in this manner.
Having seen both products side by side it appears Aldi consciously chose to replicate pretty much every detail of Bababing’s changing bag and, in doing so, infringe their design rights. Bababing wrote to Aldi who, having sold out of the product, agreed not to sell any more but refused to apologise or offer any compensation. Understandably, Bababing are furious that their hard work has been undermined and sales have been lost. Nick’s argument is that Aldi’s actions will make them think twice about spending so much time and money on innovative products in the future and the financial damage they have suffered could mean they don’t have the resources to do so in any event.
This incident is not unique with supermarkets increasingly thinking they can ride roughshod over the intellectual property rights of brand owners, and this is a concern. The longer this behaviour is allowed to go unchecked, the greater the damage it will have on innovation in the UK.
In my next blog I shall provide some guidance on how businesses can best protect their intellectual property. Stay tuned.
Goliath vs David (why sometimes its okay)
I am a staunch supporter of IP rights. As an IP lawyer I spent most of my career helping companies protect their patents, trade marks and other IP and have written many times about David vs Goliath fights – the scourge of large businesses illegally taking advantage of a smaller company’s IP- which are all too common.
However, occasionally a story breaks that flips this sentiment on its head. The latest is a story out of Australia where a furniture maker has run into trouble with IKEA.
IKEA took offence when a start-up with the name Stylkea sought to register its name as a trade mark. Unsurprisingly, IKEA opposed the registration and requested that the business change its name.
Since then Kylie Hughes, the entrepreneur behind the business, has garnered an awful lot of publicity claiming that she is being intimidated and bullied by IKEA and has invoked the David vs Goliath analogy. All she wants to do, she says, is co-exist with Ikea and get on with growing her business.
This is all very well but, unfortunately for Ms Hughes, IKEA has every right to take the action it has.
Firstly, it is inconceivable she had not heard of IKEA before settling on the name Stylkea and secondly, if she had, it is inconceivably that she did not think her business would benefit from having a name that was similar to the largest furniture retailer IN THE WORLD.
And this is the point.
The Ikea name has a huge amount of goodwill attached to it and the whole point of owning the IKEA trade mark is to stop 3rd parties from unjustly benefitting from this goodwill (which has been built up over many years and at considerable cost!). Whichever way you spin it appears the name StyIkea has been used to syphon off this goodwill by perhaps confusing consumers into thinking that the business is in some way connected to IKEA, and this is unacceptable.
As a result I have very little sympathy for Ms Hughes and hope IKEA continues to fairly enforce its rights. I also hope that innocent small businesses that find themselves caught up in genuine IP disputes aren’t tarnished with the brush of opportunism that this case has a whiff of.
The Rise of IP
Since the first lockdown last March there have been financial winners and losers and you don’t have to be a genius to spot which type of retail business has suffered the most and why.
With customers locked down and shops shut, established online retailers such as Amazon and those companies that have pivoted online have flourished. Retailers relying predominantly on Bricks and Mortar outlets have seen sales collapse and many are now carrying an unsustainable cost burden.
The evidence is clear to see. The last 10 months have seen a raft of large retailers with multiple locations going into administration. The list is a tale of fallen giants: Peacocks, Jaeger, Laura Ashley, Oasis, Debenhams and the once all conquering Arcadia group. The death of the High Street has been long predicted but Covid-19 has made it a reality.
What is worth noting however, is that all these brand names retained their value even in administration. The only assets Administrators have been able to sell for any value is the companies’ intellectual property. Prime examples are the Debenhams brand being sold to Boohoo for £55m (but not any of its stores), Marks and Spencer buying the Jaeger brand (but none of its stores), private equity buying the TM Lewin brand (but none of its stores) and the imminent sale of Arcadia’s brands (but none of its stores). Ultimately, the physical assets of these businesses have ended up worthless.
I suspect this trend will continue long after the pandemic has passed and it raises many questions about the long term future of the high street but, what is clear, is that never before has the intrinsic value of intangible assets been so high. It is now more important than ever that businesses, both old and new, focus on creating, exploiting and protecting their Intellectual Property. After all, it’s probably the most valuable asset they have.