Intellectual Property - Modern Dog Design vs Target and Disney - Case Study Example

• Intellectual Property – Modern Dog Design vs. Target and Disney

Introduction

Ideas are known to create business. These ideas are usually the property of the person who originally came up with them. The development in businesses has been favored by innovations that are developments of people’s ideas. However, cases arise in which people have taken the ideas of others and used them for their own benefit. As such, there has been a lot of emphasis on the protection of these ideas. Measures taken to protect people against the loss of their ideas include the creation of patents and the existence of copyright laws (Bently & Sherman, 2014). Many people have gone against these laws, resulting in legal battles. Others are yet to realize that their intellectual property has been used to benefit other people. It is, therefore, important that people become aware of their ideas and that they make them known, putting in place measures that will protect their ownership status.

Modern Dog Design vs. Target Corporation is a case involving intellectual property. The Seattle design studio had produced a book on art related to dogs. The inside part of the book’s front cover had sketches of dogs with the tag ‘Dogs that we Know’. The back cover, on its inside, had sketches of other breeds of dogs, with the title ‘Dogs that we don’t Know’. This book was published in the year 2008 (Strassburger & Raye, 2008). It received its copyright registration in February, 2010. On the other hand, Target and Disney partnered to come up with a white, printed tee shirt for sale in Target’s outlets. The tee shirt had a similarity with the boom in that it had sketches of various breeds of dogs on its front side. The tee shirt was offered for sale in September 2011 (Tonya, 2011).

Modern Dog filed a law suit against Disney and Target, citing the infringement of the copyright of some of its dog drawings. The design studio claimed that Target and Disney copied 26 out of the 136 drawing sin the inside front and back overs of their book. They claimed that the law protecting intellectual property against being copied had been violated in three main ways. One of them was through the use of the dog images on the designed tee shirt. The second way was by having the attire displayed on Target’s site. Thirdly, having the images printed on the tee shirt was a form of making copies of the original content without the owner’s consent, the owner being Modern Dog Design (Tonya, 2011).

Apparently, and according to Modern Dog, Target and Disney accessed the sketches of the dogs in two ways. One of them was through Amazon, while the other was through the copies that were already in circulation. Amazon has a feature called ‘Look Inside!’ that allows visitors to their site to have a peek of some of the contents in a book. As such, they managed to see the sketched dogs and copied the image. Similarly, they obtained a book from among the ones in circulation and copied the images of the dogs.

According to Modern Dog, the tee shirt and the images on the book had a striking resemblance, even though only a few of the sketches had been apparently replicated. The design studio stated that it had identified this similarity by comparing the images in the book with those on the tee shirt. They claimed that the images had been copied directly, and reduced in number to fit on the tee shirt.

As such, the design studio requested that Target and Disney be found to have willfully violated the copyright law. Moreover, they wanted the two companies to pay actual and statutory damages, as well as attorney’s fees. They also requested for an injunction preventing Target and Disney from disposing or selling the tee shirts, and wanted them impounded, as well as the materials used to make them (Tonya, 2011).

Legal Operations of the Firms since the Filing of the Law Suit

Modern Dog Design has been pushing for a win in the law courts. The company has spent a lot of time and resources in court, with the attorney’s fees accumulating. The owners of the design studio have also been after understanding the legal implications of a copyright infringement so as to identify their position against Target and Disney.

The defendants, on the other hand, have been fighting against the infringement case. In September 2013, an agreement in principle was arrived at. The defendants were to pay Modern Dog Design a sum of $ 200,000 (Tonya, 2011). Modern Dog Design agreed to terms relating to four installments made by Target. However, Modern Dog Design complained that there was a delay in the payment of the fourth installment, and that Target was going against what the court had ordered.

Strategic Operations of the Companies

Modern Dog design studio hoped to grow its design business and sell its artwork in various ways. One such way was the creation of books, similar to the one that resulted in this copyright infringement case. Target still strategically planned to acquire customers through appealing content and innovative consumer products. It enhanced its website to cater for online marketing and selling, a trend that has characterized the modern consumer market. Disney strategically plans to continue with its dominance in the film and animation industry, with icon names such as Mickey Mouse and Donald Duck. The main customer segment for Disney is children, and they hope to reach more of them by partnering with companies that can produce consumer products for children. One such product was the controversial tee shirt.

These three companies are completely different in their operations and the products that they produce. However, they conflicted at some point due to the use of one company’s innovation for the development of another’s financial strength. Modern Dog noted that there has been infringement of copyrighted items in the world of art, and most of them go unannounced or fail to attract as much attention as the dog sketches.

Effects of the Case on the Firms

Modern Dog

Modern Dog design studio had a long legal battle with Target and Disney, the two of which are big and financially strong corporations. The long legal battle had its own financial repercussions in legal fees. Eventually, the company had to sell a building hosting their studio so as to raise enough money to cover their legal fees. As such, they lost money through the many activities involved in the case. They also lost a building that they had depended on for their work over a considerable time span.

Another effect of the case on Modern Dog was the loss of money that would have been made had they continued to operate peacefully without their intellectual property being copied. The legal proceedings took up much of their time that they could have used in continuing their business at the studio. They did not make the revenue that they would have made had they remained in operation without disruptions caused by the case.

Modern Dog also received a lot of sympathy from the public. The company began extremely active social media campaigns against Target and Disney, citing the misuse of finances to harass small companies. People took up this campaign and supported Modern Dog, helping raise funds for the company’s legal fees. Everyone was sympathetic and empathetic to Modern Dog and hoped that justice would prevail. The company got a lot of followers on social media, and probably increased its customer base due to the publicity that it got. Therefore, despite the fact that it was financially affected, it managed to position itself as a strong firm in the market of designers and artists.

The owners of Modern Dog underwent a lot of mental torture due to the rigorous nature of the case. They were standing up against companies that were financially strong. Disney had previously managed to convince the government to change the copyright law for the company’s own benefit, proving that it had the power to bend rules. Disney, therefore, was a company that could influence the decision of the court had the case not been publicized. The owners of Modern Dog also had to sell a building that was part of their property and engaged in rigorous online fundraising initiatives to get funds that would cover their legal fees. These activities were mentally exhausting and tormenting for the owners of Modern Dog.

Target

Target failed to generate the revenue that it hoped to sell from the printed tee shirts. Sales of the said tee shirts went down, and the negative view that the retailer had from the public made them reconsider their options in their stores. They were also prohibited by a law court to stop selling these tee shirts. As such, they could not even recover the amount of money used to print them.

Customers of Target who were loyal to Modern Dog, or who were artists advocating for the protection of original art work, must have felt cheated by the retailer. Therefore, most of them changed stores and sought other retailers. Target lost a number of customers, even if not substantial to affect its operations, to some of its competitors (Bently & Sherman, 2014).

This retailer had to change its operational strategies to cover for the effects of the case. They paid the damages incurred by Modern Dog so as to try and regain their reputation with the public. They also put up strict measures in their sales departments to ensure that everything they sold was well researched and had no possibility of tainting the retailer’s name.

Disney

Similarly, Disney suffered a reputation loss. People recalled the move that the company had made in influencing the governmental decision of modifying a law on copyright infringement (Merges, 2011). Consumers of art products, and the general public, were also furious at Disney for trying to use its financial strength to undermine a small studio, the Modern Dog design studio. It is important for corporations to realize that consumers make assumptions as per their own views. In as much as Disney probably had no wrong intentions by partnering with Target, it had a lot to do in convincing the public not to lose its loyalty to the company.

Disney’s strategies were modified to include scrutiny of partnerships and the types of deals that they engage in. The company lost the revenue it had invested in the tee shirt due to the legal battle. It hoped not to lose in such battles again. Moreover, it had to spend a lot of finances in marketing so as to recreate its reputation among people, especially Americans and artists who felt that their overall loss of intellectual property was growing by the day (Bently & Sherman, 2014).

Effects of the Case on Industry Structure and Dynamics

To begin with, the US government failed to get the revenue that it would have generated had the tee shirts been sold and their revenue taxed. Similarly, the art industry lost revenue that would result from the sale of the art products generated by Modern Dog. The credibility of retailers and their retail products also went down as people started to view them as companies taking advantage of the efforts of other people without paying for them.

Copyright infringement has harmed the global economy in that replication leads to the production of fake items (Spinello & Tavani, 2004). Consumers get cheated, and can even incur losses due to the use of fake products (McJohn, 2009). They are also at risk of failing in their health should they consume fake products that are imitations of healthy foods or drugs. This case has highlighted some of the effects of copyright infringement, including the legal, social and economic effects. It is, therefore, necessary that governments take action to ensure that strict measures are put in place to protect intellectual property (Barrett, 2008).

Conclusion

It is, therefore, evident that copyright infringement cases have been in existence due to the violation of rights pertaining to intellectual property. It is necessary that individuals learn to protect their ideas and patent them or get copyright protection for them to ensure that they do not fall in the wrong hands. People should also be aware of the legal processes to follow in the event that they feel their ideas have been copied and replicated.