Monday Morning Quarterback (QB)… Don’t Fumble The Ball with your Intellectual Property(IP)!
Welcome to our first episode of Patent Insider Secrets™. Today we’re going to play a little bit of Monday Morning Quarterback. We’re talking about how to not fumble the ball with your intellectual property. Our office here in Baltimore sits, literally across the street from M&T Stadium where the Baltimore Ravens play.
Baltimore Ravens VS. Kansas City Chiefs
There was a great game last night featuring the Baltimore Ravens and the Kansas City Chiefs. It was down to the wire that came down to basically Ravens’ Coach John Harbaugh and Quarterback Lamar Jackson make a decision to go for it with fourth and inches. Jackson ran it down the middle and held on to the one-point lead they had over the Chiefs. But our focus is just on moments earlier.
Chiefs Fumble the Ball at Critical Moment
Ravens Quarterback, Lamar Jackson, scored a touchdown with a little more than three minutes remaining in the fourth quarter. The Ravens failed to convert the two-point conversion which would have forced the Chiefs to go for a touchdown to win in regulation. So now the Chiefs had the leverage with three timeouts, down one point to the Ravens. The Chiefs received the kickoff and fought for field position to potentially kick a field goal or score a touchdown in the final minutes, either of which would win them the game. So the end was in sight. Kansas City could smell victory. But the key point in the game was just moments later. On second down and three yards to go, Kansas City Chiefs Quarterback, Patrick Mahomes, handed off the football to the running back.
The running back fumbled the ball with one minute twenty-three seconds left on the game clock.
The Ravens defense recovered the football and the rest as they say is history. The Ravens held on to win the game 36 to 35 over last year’s AFC champions, the Kansas City Chiefs.
If you’re familiar with football, you know fumbling is what we call an unforced error. To fumble the ball is when you have possession of the ball and either you lose it because the defensive player pokes it out of your hand, or the football is dislodged when you are tackled. When you listen to some of the interviews, on NFL shows or other sports commentaries that discuss the circumstances surrounding fumbles, you will hear that sometimes, a player will fumble when they’re looking for what’s going to come next. So when they see the defender coming, or they see the endzone, and they get careless with the football. Perhaps their shift in focus causes them to play more loosely with the ball giving the defender an opportunity to dislodge the football. At other times, there’s not another player involved. In these instances, when fumbles happen, they are simply unforced errors.
Unforced errors also happen to us in our businesses as well. They happen, when we take our eye off of our goal, we lose our focus. So I want to talk today about how not to fumble the ball. Especially not misfiring when it comes to protecting your intellectual property.
With intellectual property, you have to always remember you have to keep the main thing, the main thing. Building a business requires a focus on a lot of different points of intersection:
- Raising Capital (CASH is KING: getting investors, fundraising, pitch competitions, Y-Combinator, accelerators, incubators)
- Research & Development (protecting intellectual property, retaining appropriate legal representation, purchasing the proper insurance, licenses, certifications, etc.)
- Sales & Marketing (Build a system that generates revenue, moves the sales process along)
- CASH is STILL KING: After generating or raising initial capital, you eventually must successfully raise new funds, the second round of funding, and continue generating revenue.
- Maintaining 1-4
Cash is KING
You have to raise capital to stay in business. Traditionally, you raise capital either by sales or by investment. It is critical because you have to make sure you’re generating income and revenue so that you can keep the lights on, pay the payrolls, and keep everything moving along. At the same time, your intellectual property, which oftentimes serves as a driver for your competitive advantage, your business, needs to be secured. Your intellectual property includes all of your thoughts, the ideas, the things that motivate commerce to come. A lot of times when we’re you know, entrepreneurs are bootstrapping or starting up, we start looking at the goal, I have to raise the revenue, I have to make this money, I have to do these things for revenue. And we sometimes in doing that, we simply lose focus. And what does that mean we lose focus, we’re unable to anticipate, really, truly seeing the value of our intellectual property. If we have if we’re raising, for instance, that’s where we’re focused, we may miss the appropriate window to secure our intellectual property.
Fumbling the Ball: A Case Study – First Example
We’re going to give two cases here as examples because I think it’s a perfect example of what happens when you take your eye off the ball and focus on the next goal. These are important things to think about. Because I don’t think that we as business owners always really understand how easily a catastrophic mistake can be made with your intellectual property. It was really clear in football. It’s really clear for us in business when we get to have an opponent or competitor. But it’s not always as clear when it’s an unforced error that we caused. That same thing happens time and time again, in business. It doesn’t really matter how big the business is. You can be a huge business, you can be a small business.
We’re going to use examples today of big businesses that took their eye off the ball or took some things for granted when it came to their intellectual property (IP). What ended up happening is it created some challenges. Now hopefully these challenges can be overcome. But you don’t want to be in a position where you’re building a business. You’re building a brand, you’re building your empire, you’re putting all your energy and focus into the building of your great company, and then at the same time, you’re jeopardizing all the goodwill, all the branding all the time, and effort because you didn’t take the time on the front end to protect your intellectual property. So let’s get into it. Let’s give you a couple of examples here that we pulled up. And just so you can kind of understand what’s actually been happening.
So, right here is the first example.
Cleveland Guardians Vs. Cleveland Guardians
So the first example we’re going to look at is actually for a major league baseball team. I don’t know if you all know this, but the Cleveland Indians decided that they’re going to be changing their name to the Cleveland Guardians. And if you see here you go to their website you can see the branding for the Cleveland Guardians. A Guardian is to protect, to keep watch, to defend for Clevelanders, this is a way of life. We fight together for what we believe in and if we get knocked down, we pick each other right back up and keep fighting. We’re resilient, hardworking and loyal to the city and each other. That’s what it means to be Cleveland Guardians. So pretty cool. Sounds like something that really means a lot to Cleveland. The word guardians and the logos are already rolled out. You see the name, you see they have some of the Guardian logo and jerseys. Great, right? Even some iconic architecture or statue of guardians is in the imagery.
One fundamental thing they missed when rolling out this Major League Baseball team marketing campaign, this high-value company, was basic intellectual property due diligence. There’s already Cleveland Guardians sports team.
The Cleveland Guardians are actually a roller derby team. By Roller Derby, we mean roller skates. If you look at this, this is the Cleveland Guardians. You see, they already have a similar kind of logo. They had the name. And if you look in the news, you’ll see they were actually awarded a trademark. So the Cleveland Indians rolled out their marketing for their Guardians. The Cleveland Guardians roller derby team responded to the Cleveland Indians’ decision to rebrand itself, Guardians, not with public comment. But with a trademark application.
The trademark filing indicates the Guardians roller derby nonprofit corporation application to register the Cleveland guardians for clothes, pins, bumper stickers, and can cozies. They filed this four days after the Indians filed their trademark application to cover merchandise and baseball entertainment services. Due diligence would inform the Cleveland Indians that trademark rights are derived from first use, not registration date. And from the looks of things, this roller derby picture was pretty old. In other words the roller derby Guardians have first use of the name and logo.
These Cleveland Guardians were in existence long before the Cleveland Indians version of Guardians. Unless we go back into the history books and see that in major league baseball history, there was a time where the Cleveland Indians were once called the Cleveland Guardians. Or unless there was another baseball team called the Cleveland Guardians prior to the roller derby team. If that’s the case, there would be an instance where the major league baseball team could make their case. Otherwise, this roller derby team is going to win the battle on the IP rights to the name. And if that happens, it doesn’t matter how much money Major League Baseball is paying you, you end up in a situation where you fumble the ball. You fumble the ball in the middle of the game after you’ve already made a big marketing rollout.
All is not lost, there are some options for the Cleveland Indians baseball team.
- Settling the potential trademark infringement suit by paying off the roller derby guardians
- Coming up with a shared trademark agreement.
- Fighting it out at the United States Patent and Trademark Office by filing an opposition
But some of these options are unlikely and made more difficult as the trademarks are actually for the same names and with similar imagery and similar marketplaces. So this may not be as easily accomplished. Either way, you can guarantee whichever option will definitely be more costly than proactively doing the proper intellectual property due diligence. We’ll pay attention to any developments. So that’s one example.
Fumbling the Ball: A Case Study – Second Example
We’re going to give another quick example. I know some of you are familiar with the app Clubhouse. The Clubhouse App is a very, very popular app. Clubhouse came out with an app and they grew like wildfire. They also had an early big valuation. For our next example, we’ll be examining how they were so very successful in their business moves early, yet still fumbled the ball with their IP.
Clubhouse vs TheClubhouse
So in terms of value, Clubhouse came out the gate as a huge company. They got a huge buzz last year (2020). The exclusive social audio app that innovated the live conference call with social media features and luxury branding to make it exclusive. You could only get access by invitation. Initially, many celebrities, entertainers, and famous high-net-worth individuals were on the Clubhouse app. They were growing rapidly. But they hadn’t done their IP due diligence and failed to file a trademark. So guess what, the Clubhouse App is being sued for trademark infringement by a sports networking site called TheClubhouse. Initially, experts were uncertain on whether the case would succeed.
Basically, Clubhouse App was sued for trademark infringement by an Arizona company running TheClubhouse which had trademarked their app name. So this is yet another example of fumbling the ball. This is hard to swallow when you have a kick-@ss company getting a high valuation for the app, getting all the A-list celebrities to use it, and then failing to do the thing that actually protects the name of the app. That’s like starting Facebook and NOT trademarking “Facebook,” or starting Instagram and NOT trademarking the word “Instagram,”… you have to protect your IP. At the time of the writing of this article, Clubhouse had reached an undisclosed settlement with TheClubhouse. We’ll pay attention to any developments.
So that’s, that’s really what we’re saying in a nutshell, fumbling the ball, just like a football player, just like the game yesterday. The Chiefs player, fumbled the football, caused the turnover, and cost his team the game. Football players will tell you that sometimes these fumbles are caused by good defense, but other times they’re unforced errors that happen when you stop paying attention to the little things. Fumbles occur whenever you stop paying attention to covering the ball, to making sure that you’re looking in front of you, making sure that you’re aware of your surroundings, making sure you’re dodging your opponents or focusing on the End Zone too soon.
Now in business, fumbles happen when we start focusing on the outcomes and forget to do the little things. Like with Clubhouse winning the big company valuation, getting so many investors and celebrities onto the app, but forgetting to do the fundamental things…one of which is protecting your intellectual property. So that’s our Patent Insider® tip for today, our Patent Insider Secret™, be sure to comment below this video or blog post. Put any questions you have in there you’d like to have answered in our next video. We look forward to continuing this series of Patent Insider Secrets™. But remember, Don’t Fumble the Ball with Your IP!
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