In our last session, we talked about the importance of trademark, and we focused on why trademark matters to companies. Why it's valuable, why you want to protect it? In this session, we're going to take a different approach and ask, why is it important to governments, or why is it important to society? Why do we have trademarks? If we go back to the original idea of trademarks when they were initially created, the idea of a trademark was to protect craftsman, protect people creating things. And it was a mark on a good used in commerce, a mark used on your artistic product. A Steinway piano has a mark on it that says Steinway. A plate might have Wedgwood China on it, or some other mark that says, this is my product. You could think of it like a brand, like you would brand a cow in a cattle in a Western movie. That's my mark. And it's a physical mark that you put on a product used in trade. So it's a trademark. It only had meaning for a product. Because otherwise, it wasn't a mark on a product used in trade, which means sales. So it was a mark used in selling something. But it's become broader than that, and it's now protecting the corporate identity, logos, brands in general. If we think about today, what are we protecting with intellectual property? We're protecting artistic expression with copyright. We're protecting inventions with patent, and we're protecting brands and identity, logos, sounds, and many other things with our trademark. And that's what we're using trademark for. But it's more than just products today. There are other kinds of marks, which are also called trademarks, but they're not marks on a good used in trade. They're marks on service, for example. When you go to a Prudential financial advisor, and you get an insurance product, they'll say, buy a piece of the rock. That's the slogan they use. You're not actually getting a rock. You're just getting solid financial advice. That's the idea. So when you buy, get a Visa card issued by your local bank, the Visa logo on there is a service that the company is providing of processing and representing that. And Visa is a corporation, Marriott is selling services. There's also collective marks. And collective marks are a group of companies with commonality of ownership or franchise agreements. The Triple A insurance companies may have separate owners, but they're part of the Triple A group. They may be independently operated from state to state, but from the consumer point of view, you feel like it's all Triple A, and they're part of the same group. LASIK eye care, each one of these maybe an independently-owned center, but they're providing the same technology and service. Certification marks are even a little more abstract. So we're moving from product to service to collectives to a certification, like CPA. That's protected by trademark law. It's not a corporation, although there is a company that licenses CPAs and approves them and makes the certification. But it's more of an association that says if you do these things, we certify that you are a qualified CPA. If you have a product that meets certain specs, we allow you to use the Woolmark mark that says your product is 100% wool. That's all you have to do, and then you can say Woolmark. Or ISO 1000, meet these criteria, and you can have the ISO logo on your company literature. In terms of value to society, trademark is one of the least tangible of the intangible assets. Copyright and patent are easier to understand in terms of their value to society and value to society worldwide. 186 governments have said, we value copyright. We're going to join in international treaties and agreements to recognize and honor each others copyrights. Patent is much more of a local law phenomena. And there are many, many countries that recognize patents. A few with less than copyright, but it's still pretty well-globally recognized that we want to encourage innovation. And so we recognize patents. Trademark is harder to sell to some governments as to its value. Some government say, absolutely, this is really valuable. We really need it. We need to protect it. We need to protect consumers, we need to protect corporations, we honor value trademark and the government say? Why? Why do we care? And if they say that, you get small judgements, you get weak governmental protections, and therefore, your trademark is not worth as much to your business. So if it's not valuable to society, the governments won't protect it. Judges won't give awards, big awards, and you make less money as a corporation. So you want your trademark to be valuable to society. That means you have to sell the idea of trademark as having value to consumers in society. Now, if we look at the value in US and Europe, it's pretty high. And in fact, violating trademark can be very expensive. There's a discount shoe store that sells their own brand of shoes called Payless in New York. It's very popular store. They came out with a shoe that have three stripes on it that made it look like an Adidas shoe. And Adidas sued. Now, Payless said nobody thought it was an Adidas shoe. It's a Payless shoe, it's our brand. But the court said, no, it looks too close. It's likely to create confusion in consumer's minds. It's too much of an overlap. We find Payless is at fault for violating trademark law. So what did Payless have to do? Well, they got to pay a lot of money. How much money? Well, frst, they have to pay the damages that they caused to Adidas, 30 million. That's the first part of the judgment. Adidas gets the money that they lost. But then, Payless also has to pay to Adidas all the money Payless made on this shoe. Payless sells many more shoes than Adidas does. For one thing, they're cheaper. But so, Payless has to pay out all of their profits to Adidas in addition to all of Adidas's loss. The court is saying Adidas should be made whole, and Payless should be made whole. And Payless being made whole means take away any profits they made, give it to Adidas. In addition, the judge said, we find this offensive and upsetting. So we're going to award another $137 million on top of Payless's profits as punitive damages. Punitive means in punishment for. It comes from the same root as punishment. And so we're going to apply double Payless's profits to the additional, the award that Adidas gets in addition to their actual damages. So over $300 million money out of pocket for Payless. What about in China? Well, China says, do we care? They buy into copyright, by and large. They buy into patent, as. Perhaps a little less than some other governments, but it still matters. What about trademark? Well, when products hurt consumers, when fake milk product is sold, and young children are sick or die because of fraud and products that harm health or fake medicines, the government cares. People are upset. It's bad for the country, it's bad for the people. The people are upset, and therefore, the government's upset, and therefore, they say we need to do something. But when people are buying cheap products on Taobao, which is Alibaba, or when Americans are buying cheap products on Amazon, and the products are pretty good quality, but they're knockoff, maybe governments care less. It may not be that they don't care, but they may care less. And so therefore, their actions may be less enthusiastic or less supportive. Now, bottom line, are trademarks important to society? Yes, they're clearly valuable to business, and any country that values business is going to value trademarks. And so virtually, every country values trademarks, at least some. But their value is less clear and less consistent across country to country. Some governments care much more than others. Some governments value trademark more than others. So trademark value and trademark protection is not the same from one country to another. It matters differently across different countries. Thank you. [MUSIC]
