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An IP Slam Dunk in the Beijing Water Cube

Allan Main is a New Zealand innovation consultant and reader and regular commentor on this blog.  Alan recently sent out a note on branding, Speedo and the Olympics which I think has some great points.  So, here it is reproduced in full with permission. 

Let me know what you think.

From time to time I send out current event snippets intended to provide insights to the role of intellectual property tools in providing competitive advantage in your business. 

 Right now, what could provide a better demonstration of competitive advantage than the Olympics, where the cream of the world’s athletes pit themselves against their peers to show who is the best of the best? While organisers make every effort to create a level field on the field of competition, outside that arena competitors scramble for innovations that extend their innate talent to gain any competitive advantage over their peers – and not all enhancements are chemical-induced!

Of course competition does not just exist amongst the athletes; sporting goods suppliers are engaged in even more ruthless competition than Olympic competitors, with the spoils of success being even more lucrative for their businesses, if not in fame then certainly in fortune. Occasionally a technology leap is made in sports equipment that changes the basis of competition both for suppliers and for the athletes. When this happens, those competitors who do not avail themselves of the new technology effectively eliminate themselves from the competition. Such innovations are expected in equipment-enabled events like vaulting, rowing and cycling, but arguably the leading technology innovation of these Olympics occurred in swimming where a new swimsuit propelled swimmers faster than ever before with 25 new world records having been set in the Beijing “Water Cube”. 

 In the Olympic pool, Speedo certainly trumped its swimwear competitors TYR, Nike and Arena with a technology leap they have branded the Speedo Fastskin LZR Racer. This innovation led to a near medal monopoly in the Olympic pool with all but one of the Beijing gold medals being awarded to swimmers wearing their revolutionary swimsuit. Some swimmers were even wearing the Speedo LZR in defiance of sponsorship deals with Speedo’s competitors. Indeed, so hot was the pre-Olympic swimwear competition that Nike and Arena reportedly released sponsored athletes from their contractual obligation to wear their own branded costumes in order to not disadvantage them in the pool. TYR took a different, and rather more “American”, approach by suing Speedo in the US courts for “false advertising” and “conspiring with the US swimming federation to conduct a monopoly”, even extending the litigation to include the head coach of the US swim team and one of TYR’s sponsored “name” swimmers, who (of course) counter-sued. You might say there was more than one swim “suit” involved, one in the pool and one in court! Ah, the pristine purity of Olympic competition!
So much for the side show. There can be no question however that Speedo has won, for now at least, the main event of swimsuit technology leadership in the pool. So how does Speedo protect its competitive advantage when all the enabling factors are in the public eye for easy reverse-engineering? Exactly the same way that you should in your business – smart use of IP tools! While swimmers sporting the racy Speedo suit were going faster than they ever had before, a few weeks before the Olympic opening ceremony, and with considerably less flourish, the US Patent and Trademark Office (USPTO) published two patent applications assigned to Speedo International Ltd titled “Garments” (US 2008/0141430, and US 2008/0141431) each directed at different aspects of the new swimsuit. Through this means Speedo placed their competitors on notice that the technology that enabled Speedo’s performance leap is forbidden fruit and alternative means will need to be found to compete. 

Meantime each medal won by a swimmer in a suit sporting the Speedo logo, and every news headline that highlighted the supreme dominance of the suit transferred some of the patent value into the Speedo brand value, where it will live beyond the life of the patents.   

Herein lies a core lesson in IP management – technology IP (eg patents) provides the means to create new value, and trademarks provide the bank in which to store it. Patents live for 20 years, Trademarks are forever! Complementary use of both tools is needed to capture the value of innovations.

Is your business making equally smart use of intellectual property to win your own equivalent of Olympic competition?

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