Stop this corporate bullying

Thickets of rules are often used to keep small companies down, says Matthew Lynn. It's time corporate bullying was dealt with once and for all.


Hagen-Dazs: a pioneer in fakery

Next time you want to thank the person at the checkout who packed your bags, or someone who steps out of your way in the street, check with a lawyer first. Why? Because US bank Citigroup thinks it owns the word. Seriously. The bank is suing phone company AT&T, arguing that its use of the word "thanks" in its "AT&T thanks" loyalty scheme infringes Citi's own trademarked "Citi Thank You" scheme.

The outcome remains to be seen. With any luck, the judge will give the whole Citi board ten years in jail for wasting his or her time. But it is an illustration of just how aggressive big companies have become in trying to claim ownership of everyday words.

"Pods" have been around for a long time especially in the vegetable world but after the success of the iPod, Apple tried to stop anyone else from using the word. BP once tried to sue anyone who used the colour green. Best of all, Hagen-Dazs tried to act against anyone using a made-up Scandinavian brand, on the grounds that its own was fake, and that it was the first firm to come up with the idea of pretending to be northern European in order to sell stuff.

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This is bonkers. And it is a sign that intellectual property law is becoming a barrier to business. The basic argument is clear enough. The language belongs to everyone and, within reason, should be available to every firm, big or small. No one invented it, and it is impossible to see any legitimate argument for anyone laying claim to any particular word.

Of course, unique brands should be protected. I can't set up a grocery store called Tesco, or sell TVs under the Samsung name, or set up a coffee bar called Starbucks. But everyday words shouldn't be controlled by anyone. If an entrepreneur wants to use a word for a new business, and is not pretending to be part of an existing corporation, then it is unreasonable to prevent them.

Intellectual property law is now being used as a way to entrench the dominance of big corporations, and to keep new ideas out of the market. Only huge firms can afford the legal departments and risk the court cases needed to enforce such restrictions.

You might be tempted to describe it as a monster growing out of control were it not for the fact that the Monster Cable firm in the US is especially vigilant in enforcing its rights over the word "monster". And we will probably see much more of this. Brand names, patents and logos are becoming more and more important to firms. In an increasingly competitive global economy, new ideas don't stay new for long and successful products are rapidly imitated.

Companies will try to stop that happening. But that doesn't mean we should let them. It's a form of bullying and like any bullying, it needs to be resisted. Far better if phone manufacturers are influenced by each other's innovations. The same goes for car makers, restaurants, or any other sort of business. The more entrepreneurs we have trying out new things, the better off we will all be, even if the people they are challenging don't like the competition. Thickets of rules are often used to keep small companies down.

Many come from the government. But bullying big corporations, with aggressive legal teams, can do exactly the same thing, and deserve even less sympathy because they should know better than anyone that the freedom to compete is what makes capitalism work.

Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.