The Elephant in the Meeting Room

One of the more interesting moments at POPAI's recent Annual Industry Conference occurred during a panel discussion on strategies for protecting intellectual property. The roundtable, which featured a professor of retailing, a couple of consumer-packaged goods marketing executives (a.k.a. "the clients") and representatives of the display producers who serve them, became quite emotional. The central argument, articulated by anecdotes, case histories and horror stories, centered on the themes highlighted in POPAI's new intellectual-property-rights awareness campaign: Creative designs, draft layouts and proposed executions have intrinsic value.Ownership of this creative resides with their originators until purchased.Clients should acknowledge the full value of this intellectual property. Intellectual property should not be "auditioned" in a negotiating process that ends with a bid-out.Should and could the P-O-P producing community police the simple misappropriation of designs amongst themselves? The answer to both questions is yes. The various protections afforded by patent and copyright law to P-O-P companies are more or less sufficient to provide redress for the theft of a design by a P-O-P competitor. Unfortunately, the problem rarely plays itself out in such a straightforward manner. The dilemma that even the most experienced patent attorney cannot solve is this: What if a CPG marketer/client is somehow "behind" the misappropriation, soliciting a design proposal from my company but sending the drawings to a competitor for production? Can I sue just my P-O-P competitor and avoid annoying, angering and permanently burning a bridge to the CPG marketer/client? All panelists -- academic, marketers and producers -- agreed that these practices were wrong and that something should be done about them. One panelist opined that producers should change their business model and stop using their creative designs as a stalking horse/loss leader that only pays off when it secures a big production run. Itemize your services into a menu and charge accordingly, said another. Impractical, answered a producer, who said clients would be staggered by the size of a design services bill that fully accounted for the costs incurred. Others argued that using contracts that clearly delineate the nature of the intellectual properties involved would help to some extent. They noted that many problems arise when there is executive turnover at the client, and the new broom assumes that the predecessor bought all rights to the designs. "Yes," agreed everyone, "that would be quite helpf..." At that moment, the tone of the session changed and the panelists finally acknowledged the enormous elephant that had been standing in the meeting room the whole time. One CPG marketer explained that his company's history of good relations with P-O-P producers turned sour only when, in the midst of planning a major rollout, the retailer suddenly "suggested" that another display company could manufacture it at a lower unit cost. Another marketer said that while the merchandising people at headquarters might want to fight such a practice, the field people who deal directly with retailers daily, and one unnamed chain, in particular, would scream. A producer then chimed in, stating various ways that a number of retailers, and one unnamed chain, in particular, had trampled over his design rights. At this point, the professor summed up the panel's findings by noting, quite properly, that there are many retail chains out there that respect the intellectual property rights of their supply chain partners. He concluded with the following advice: You don't have to do business with every retailer out there, and with one unnamed chain, in particular. At that point, there was a perceptible sigh of resignation in the room, and the session was over.In keeping with the Harry Potteresque veil of mystery at the roundtable, I won't speculate on which "retailer who must not be named" they were referring to, although I am pretty sure it more or less rhymes with VOLde-MoRT. I think the photo above neatly sums up the intellectual property dilemma facing in-store marketers these days. It shows three of the biggest brands in mouthwash -- Listerine, Plax and Scope -- alongside Albertsons' private-label versions. In each case, the well-known brand's distinguishing color, flavor, consumer benefit, and bottle shape is replicated in the store brand. Yes, it is possible that this is just one whopper of a coincidence. Perhaps the good folks at Albertsons are scrambling -- as we speak -- to redress this as an unfortunate, accidental misappropriation of trade dress. But I doubt it. The P-O-P industry, I'm sorry to say, can draw only one sad conclusion: If CPG powerhouses such as Pfizer and P&G are willing to let this happen to their own brands, why would you believe that any product marketer is going to lift a finger in defense of some P-O-P producer's display design?

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