In The News: Apple Tries to protect Trademarked iPad™ from becoming Commonized

This article analysis will be of special Interest to my ECON 2302 Students.  I suggest reading it and posting answers to the questions in the comments as they *may* be worth a few extra credit points. 


Very recently an article in USA Today discussed Apple Computer taking legal action to protect its trademarked iPad™ tablet computer from becoming commonized.  Commonization or genericization refers to the process of how a registered trademark becomes a common noun or verb used for an object, process or service.  For example, in the past Frisbee, Aspirin, Yo-yo, Zipper, Escalator, and Thermos were registered trademarks or brand names that lost their registered trademark status due to commonization.  


Over the years other registered trademarks have taken to marketing and legal action in order to protect the value of their name.  Band-Aid™ brand adhesive bandages modified it's jingle to add the word "brand" to emphasize its status as a registered trademark. Kleenex™ brand tissues did similar actions.  Liquid Paper™ correction fluid, Xerox™ copiers and Rollerblade™ in-line skates posted ads in The Writer magazine in order to remind authors of fiction and news articles that their registered trademarks were not to be used as common nouns or verbs, and that doing so could subject authors and publishers to legal action.  




Per the article:  "It's difficult to quantify how much revenue a company loses when its brand is deemed generic. But companies worry that it breeds confusion among consumers."  I'm sure the Frisbee trademark was worth something to the pie-tin company and later Wham-O toys.  I'm sure Zipper was worth a good deal of money to the BF Goodrich company that patented the fastener.  There was assuredly a lot of time, energy, and money put into developing and marketing those brand names.  And now Apple Computer is worried the same thing will happen with iPad™.

Personally I find it a little silly that Apple would do this, but given Apple's history, its largely a result of a lesson learned back in the 1980s.  The Apple and Apple II personal computers were wildly popular, but were expensive.  Apple did not take proper legal steps in order to license its Operating System, and as a result tons of cheap clones were sold for about half the price (i.e. the Franklin Ace).  When Apple released the Macintosh ™ computer or Mac for short, several companies created clones, but Apple sued the pants off of them and has pretty much been borderline fascist on protecting its trademarks, licenses, operating systems and brand names from clones and commonization by businesses, publishers, or any other entities that could use those items to earn revenue.  While most folks I know don't say iPod™ if it is some other brand of mp3 player or media player, the preparation of Podcasts (audio or video shows for replay on any media player, not just an iPod™) continues and the word has been used, with only some verbal sabre-rattling by Apple Computer.

Star Trek: TNG PADD

Some truth:  IBM, Microsoft and Xerox teamed up around 1999 and developed early Tablet PCs.  They were largely based on the use of the old pen pad hardware attachment that some personal computers used.  Dell and a few others developed some rudimentary Tablet PCs but they were not well received by the market largely due to heat and weight issues, as well as due to the lack of an intuitive user interface. Some of them were laptop computers  with a screen that flipped over and only would operate with a stylus, not the use of a finger.  In 2007, Apple introduced the iPod™ touch. I bought one largely because I liked the touchscreen interface, and because of how intuitive it was to use.  My then 5 year old daughter said "It'd be nice if they made a larger one like it."  It also reminded me of a smaller version of a tech concept from Star Trek: The Next Generation called the PADD (acronym for personal acccess display device).  On all of the Star Trek series that were set in The Next Generation time period, we saw Starfleet personnel using them.  And when the iPad came out in 2010, it reminded me almost exactly of the Star Trek PADD--and yet nobody from Paramount or Gene Roddenberry's estate has sued Apple yet.

Since the iPad™, Android, Samsung, RIMM and Motorola have produced their own Tablet PCs that have worked quite well.  Although they are not iPads, they work in a similar fashion.  Just the same, I personally doubt someone that uses a Galaxy™ or Xoom™ tablet PC will call them iPads.  I also figure anyone that asks "is that an iPad?" would be told by the user "No, it's a Galaxy tablet."

Questions to Consider:


1.  How much money do you think a business puts into creating a brand name?  How much is the brand name worth over time if the product is successful?  


2.  What kind of costs are incurred by creating a brand name?  What kind of costs are incurred in protecting it?


3.  In which market structures would brand names be most common in?  What are brand names an example of?


4.  How much value do you think was lost by Bayer when they lost the trademark to the brand Aspirin?  How much value would Apple lose in the event iPad™ became commonized and they lost the registered trademark? Would it cause Apple to take economic losses?


As always, thoughtful comments and questions are welcomed.

Success to you all!

Prof. Hank Lewis