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Intellectual property rights are simply exclusive, legal rights to ideas or creations of the mind. The broad term covers everything from copyrights, to trademarks and patents, to industrial design rights, and sometimes trade secrets. In recent history there have been a plethora of disputes and lawsuits under the umbrella term of “intellectual property rights,” but critics argue that such laws are counterintuitive to forward progress and can even be harmful to the population as a whole.

Famous Intellectual Property (IP) Disputes

IP disputes are common. In fact, they happen every day. Most go unnoticed; however, there are a few famous cases that have made headline news. They are a good lesson in how IP rights can be used in a court of law.

In April of 2005, MGA Entertainment and Mattel battled in court over the “Bratz” doll line of dolls, which mimicked the original Barbie. MGA filed a lawsuit first accusing Mattel of creating a line that was too similar to Bratz dolls. Mattel countered by asserting that Bratz designer Carter Bryant had worked for Mattel and had designed the brand on company time, thus making the Bratz concept Mattel's IP. Mattel won the lawsuit and was paid $100 million by MGA Entertainment.

In 1994 Adidas went to court with Payless over stripes on sneakers. Adidas argued that they had used the “three-stripe” design as a trademark of sorts, and had trademarked the logo before Payless began selling similar shoes. A settlement was reached but in 2001 Payless, again, began selling the design. A seven year battle ensued with Adidas ultimately winning the lawsuit. They were awarded $305 million.

What Do Business Owners Need to Know About Intellectual Property?

Business can only benefit from understanding the basics of IP rights laws. Because IP includes copyrights and trademarks, a business must understand how these works can be distributed and what can be copyrighted, within reason, in order to benefit from IP rules and regulations.

For example, a business owner has the exclusive rights to ideas created by employees for the business. That is to say, an employee cannot take an idea created for the company they are working for and shop it out to competitors. The idea, if copyrighted or trademarked, cannot be sold by the employee as the rights belong to the company for which the idea was created. This law also extends to trade secrets, in many cases.  

Business owners must also realize that copyrighted material and trademarks cannot be used without the expressed consent of the owner of the material.  Slight variations on a trademark or copyrighted material do not exclude these materials from intellectual property laws and regulations. Most recently, a coffee shop in California was served with a cease and desist order by Starbucks for copyright and trademark infringement. The coffee shop “Dumb Starbucks” was a direct parody of Starbucks, including the menu design, branding of the logo, and the names of the beverages, including a beverage named the “Dumb Frappuccino”.

For a business to avoid any IP issues, it is important to check copyright and patent databases to ensure the idea has not already been protected under IP laws. It is also important for business owners to work towards trademarking and protecting intellectual property they feel could be utilized by competitors or future competitors.


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