Small Business

Entrepreneurs 101, day 12 – avoid IP infringement disasters

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The small and medium enterprises of Australia have an intellectual deficiency problem of Homer Simpson proportions.

However, that’s not all – some small operators could be inadvertently breaking the law, making themselves accidental criminals.

The Rumsfeld view

Donald Rumsfeld, the former Secretary of Defense, once shocked the world with his now infamous insight:

“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.”

While his analysis has resulted in some head scratching for some pretty smart people, his last line does make sense.

Peter Willimott, the director of marketing and customer Engagement for IP Australia, concedes that the legalese language of IP matters means that many small business people view the subject as Homer Simpson finds most brain challenging issues – “boring.” 

IP disasters

The potential calamities of a business owner not understanding IP, however, needs to get through to SMEs. Also the potential crimes a business owner can commit in the internet age also can’t be ignored.

One of the saddest IP disasters involved Frank Bannigan, the managing director of Kambrook in 1972, who developed the electrical power-board. This product made the company’s name.

However, the power-board was not patented and Kambrook ended up sharing the market with many other manufacturers.

“I've probably lost millions of dollars in royalties alone,” said Bannigan. “Whenever I go into a department store and see the wide range of power-boards on offer, it always comes back to haunt me.”

Then there was the Sydney couple in 1997 – Tina Hanson and Bo Ernfridsson – who had an online swimwear business called Absolut Beach. It was a great name and the business did well until Vin & Sprit, the makers of Absolut Vodka, started legal proceedings accusing them of a trademark infringement.

The couple lost their legal battle and their business.

Are you stealing?

And in another twist to the IP challenge, many small businesses are ‘stealing’ other business’s IP – copyright articles, photographs, videos, podcasts and more – to market their businesses on their websites.

This is often done without attribution, payment or permission. This is a criminal act as copyright material and another business’s brand are assets – other people’s assets.

This is why IP Australia must make IP language sexy so SMEs throw off their Homer Simpson “boring” attitude towards it.

(By the way, I accessed the Rumsfeld quote from brainyquote.com – I don’t want to be accused of double standards.)

Published on: Friday, January 07, 2011

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