This week, Seven Towns’ Steve Perrin, Ooba’s Max Ford, Wow! Stuff’s Richard North, Jenga creator Leslie Scott and Bananagrams’ Rena Nathanson discuss the effect of copycats and the double edged sword that is becoming a brand.
Richard North, CEO, Wow! Stuff: Leslie, with Jenga to this day, you own the rights to the name and the design rights?
Leslie Scott, Jenga creator and co-founder of Oxford Games: No, the rights have been assigned to this agent. It’s a long story which I won’t go into now but I get royalties on it.
Richard North: Is the name now its most valuable asset as the product can be copied?
Leslie Scott: It has been copied. I did trademark Jenga and I did try to patent the game and the patent agent at the time said there was a very good chance. In the proper game, the blocks were slightly different and that’s the key to the game. So there was potential for it to be patented, and I got a patent pending, but then I couldn’t afford to take it further. I’m sure that’s a story a lot of people have gone through.
Richard North: So if Hasbro or Irwin had chosen their own name for the game, they might have had ownership of that name too?
Leslie Scott: Possibly. I now know that it’s actually quite rare to be able to hang onto all that aspect of it. The whole naming business is fascinating.
Rena Nathanson, CEO, Bananagrams: It is now not just about a name, it becomes a brand.
Max Ford, Managing Director, Ooba: Well, where does it swap? Look at Connect Four and Four in a Row. John Lewis and Tiger have their own and lots of cheap shops have Four in a Rows for a pound or so. What generation starts to call it Four in a Row and not Connect Four? My personal experience is that I see Four in a Row now as a brand more often than I do Connect Four. Jenga and Bananagrams are both fantastic examples of games that everyone knows the names of, even the younger generation. Connect Four is perhaps a unique example of where it can go pear shaped. It’s about understanding how to manage a brand to make sure the next generation gets it. We’re still quite a young industry. Mass producing games is mostly a post-Second World War thing so we’re still learning a lot about how these brands that are big now can remain big forever.
Leslie Scott: It’s interesting even using the term ‘brands’. That’s quite new, to refer to a game like Jenga or Monopoly as a brand. There’s a danger once a name becomes a generic name for something.
Richard North: Like when people see Four in a Row and think that’s Connect Four.
Max Ford: And they don’t care if it’s the actual inventor getting the royalties or not.
Steve Perrin, Senior VP Design and Production, Seven Towns: There are lots of implications that Rubik’s Cube demonstrates.The Bedlam Cube was an existing product that was around everywhere. It was only due to Dragons’ Den that it came and went. With Connect Four, effectively, Hasbro only owns the trademark name Connect Four, it doesn’t own the gameplay anymore. Likewise with Jenga. While it can maintain its product in the market as the market leader, it can’t stop other people making knock-offs, as long as they don’t call it the same. The mistakes that were made is that Hasbro didn’t ever protect the likes of Jenga and Connect Four once those knock-offs were made and started to appear in the market all those years ago. That’s the difference with Rubik’s Cube. We have and do attempt to stop all knock off Rubik’s Cubes.
Richard North: But that’s because you have the design rights?
Steve Perrin: There’s a new type of trademark which is becoming stronger and stronger known as a 3D trademark. There’s not that many of them being issued but you can apply for them retrospectively. It works internationally. We have a global 3D trademark on the identity and look of Rubik’s Cube. That is very strong protection. We have the trademark for the name Rubik’s and in relation to all of its derivative products within the category and outside of the toy industry as well.
The other big case was when LEGO tried to do the same thing some years ago. LEGO tried to trademark the 4 x 2 brick and lost the case because it hadn’t protected the market from the knock offs over the years, it was also considered a functional feature rather than a ‘work of art’. It has become so seeded within the market that there were way too many knock offs. Whereas what we had done was to constantly go after the knock offs. Not just in the identity of the product use, but in the psyche generally. So if you see a Rubik’s Cube being used in a print ad, that’s under license or else it’s breaking our copyright. If it’s in a TV show or a movie, it will be under license. So with Connect Four, there is now just too many knock offs on the market because it didn’t fight its corner.
Richard North: But how could it have been able to fight its corner?
Steve Perrin: In the same way as you with Air Swimmers.
Richard North: We fought that because of all the registered IP that we had like patents and design rights.
Steve Perrin: It’s difficult to do with something that doesn’t have an absolutely categorical identity to what it is.
Rena Nathanson: We’ve also had a huge problem with copycats but we’re fighting tooth and nail.
Steve Perrin: It’s not easy. You need a lawyer that’s very well versed in the area.
Leslie Scott: With major companies like Hasbro, once a game becomes really established it refers to it as brand. You get brand extensions rather than game extensions so it can hold onto that game.
Rena Nathanson: We have a strong brand and we have other games under the brand. The brand or name earns the trust of the buyer. If they buy Bananagrams and love the experience, they will trust that. It’s all about not letting the consumer down.
Steve Perrin: When you bring something brand new to market, it’s not yet a brand. I think the goal for anything is for it to go from being a new product to becoming a brand. Whether it makes it there is difficult to achieve.
Richard North: So why do products have such a short shelf life? You see certain products and you know it’s a one hit wonder.
Max Ford: Well there are brand-building companies and then there are companies that will see something as being good for a season, giving it huge TV coverage for massive initial sales. If it doesn’t hold up immediately after turning off the advertising then they’ll simply move onto the next one. I think some companies listen too much to the mass-market retailers and not enough to the indie stores. A brand focused company sees a lot of its longevity coming from independent stores.
With old items that stuck and became big brands over time, and which have seen themselves being copied a great deal as a result, the managers have focused on extending those items/brands in order to maintain them. But by focusing on that, the companies haven’t protected the quality of the item or its core community. Instead they thought consumers would automatically go with the brand name they trusted no matter what they got. Trouble is, the quality of each new item took a hit in order to drive impulse purchasing, which over time has weakened those brands and turned a community away from them.
Steve Perrin: 20 years ago, when the erosion of some of these brands happened, I don’t think the legal system was savvy enough to offer a way in which they could have been protected. At the time, and a lot of the time now, it’s seen that if you’re the market leader, then it’s just c'est la vie that another company might take 10 per cent of your pie while you have 90 per cent. Gradually that gets eroded and eroded and if you make mistakes with your own brand that can also lead to erosion.
You have to get the balance right between whether a legal fight distracts you versus protecting your own business. How many years ago was it that LEGO was close to bankruptcy? It spent a lot of time trying to achieve legal protection, which it ended up failing in. What LEGO ended up doing, and how it got back from brink of bankruptcy to the being the world’s most successful toy company, is looking back at itself and doing what it should be doing better than anyone else. Now, every premium licence wants to be done by LEGO because it’s the best.
Richard North: We’re in an interesting situation with our Real FX racing car system. With Real FX, we created something that we have multiple patents for globally. It was created by scientists from all different sorts of industries and they’re very proud of what they’ve created. We launched it and Argos and Tesco have picked it as one of their top toys for Christmas so we got off to a great start in that respect. But competitors will at some point try to knock it off and force us to spend money defending this. We find it immoral.
Steve Perrin: In my experience, 99.9 per cent of people in the toy industry are nice people. It’s a very small industry and history will find you out very quickly. Stories go round very quickly and those that are known to be not necessarily playing by the rules become very well known. Although there’s not many in my view.
Max Ford: We recently started manufacturing products in the last couple of years and so we haven’t had that experience yet. In the games industry, I don’t think it’s quite as aggressive although I heard a story of a product signed by a company that didn’t have any plans to launch it, just so that it wouldn’t go out.
Leslie Scott: You get a patent and it’s granted, but then it’s entirely up to you to defend that. I find that whole concept bizarre.
Rena Nathanson: And the cost is huge.
Leslie Scott: I don’t understand why the patent office in this country doesn’t take some sort of responsibility for defending that. You’ve paid quite a lot to get it there. I’ve had this with trademarks. It was for a game we called Hazard. Hazard was a game based on The Canterbury Tales that we were asked to design for Past Times. In The Canterbury Tales, it refers to characters playing a game called Hazard. ‘Hazard’ the word means this game. If you look up the word in a dictionary, the first definition is for this game. We put the game out and didn’t attempt to trademark it because it was like putting out a version of Chess.
We put it out and got a Cease and Desist from a lawyer saying that their client had a registered a golf game called Hazard. Our first reaction was to say that it shouldn’t have been granted. The guy really went for us and we thought 'we’re selling 5,000 of these games, it’s not worth it'. So we took it off the market, but the golf game was never actually put on the market. You can’t trademark the word TABLE to name a table, so how could you trademark the word HAZARD to name a game?
Steve Perrin: The rules of the system are quite often unfit for purpose. It comes down to interpretation and the only way that can be sorted is by going to court.
Leslie Scott: There should be rules about this. If a patent office grants something, it should be held responsible. Why do we get left with it?
Steve Perrin: I’m sure it’s the same in trademarks as it is in patents. There’s a misconception that because you get one granted, it automatically makes it actually valid.
Leslie Scott: But I think that’s a fair enough assumption. If the patent office is just a filing office, that’s fine, but you pay an awful lot of money for its services.
Max Ford: There are people who are hired specifically to work around a patent. The industry is an industry like any other; it has its defences and its attacks. If you want to play the system to defend yourself, you have to fight very hard. If you want to use the system to get around someone else’s protection, it’s almost easier.
Next week, the group discuss whether, with more and more inventors getting to market through platforms like Kickstarter, the current landscape is as good as it’s ever been for toy and game inventors.