Keeping cool with copycats

"One thing that happens a lot is that people in Chinese companies find something they like and they make an exact copy. There’s no finesse to it, they look at the software screen-for-screen and then they essentially make a 100 per cent copy of what they see, slap a new brand on it and release it to the Chinese market.

This happened to Shopify a few times. In one interesting case, we saw that a Shopify clone (ShopQi) was available on GitHub (a social network for programmers to collaborate, where users can send a “pull” request to share software suggestions or modifications). I made a copy of the code, and then I simply went ahead and deleted every single file and jokingly sent back a pull request by saying that I had improved the code by deleting it because it was such a blatant copy. I figured people internally would find it funny. It was kind of silly, but it felt good.

Obviously (the pull request) hasn’t been accepted, but it’s still there. They can’t make it go away.

I sent some e-mails back and forth but there was a big language barrier and it didn’t go anywhere. I didn’t want anything from them – they knew they were doing something wrong.

Someone reminded me that a lot of good painters make money by making copies of famous pieces. While they can make exact copies of the pieces, that doesn’t mean they will be as good as the original artist. If they copy a Van Gogh, the next copy is not going to be Van Gogh quality. Other people could copy everything Shopify is, but it’s really a frozen-in-time copy. We make (upgrades, which means copycats don’t) tend to matter in the end."

Staying clear of the courtroom

FRISKY WHISKEY

Shopify isn’t the only company using unconventional tactics to deal with copycats.

When executives at Jack Daniel’s realized that author Patrick Wensink had used a ripoff of the whiskey company’s famous logo for the cover page of Broken Piano for President, the company took a soft approach to dealing with the copycat.

The Jack Daniel’s attorney sent a cease-and-desist letter to Mr. Wensink thanking him for his affection for the brand, but politely asking him to change his book’s cover page. The letter even went so far as to offer to pay a portion of the redesign fees.

In a blog post, Mr. Wensink said his publishing company would change the cover, but not take Jack Daniel’s up on its payment offer, suggesting the distiller’s strategy was successful.

But what would prompt a company to take such a gentle approach to a copycat in the first place?

COST

“Quite simply, intellectual property litigation is incredibly expensive,” says Adam Tracey, an associate with MBM Intellectual Property Law in Ottawa.

“You might win, but you’ll be stuck with tens of thousands of dollars in legal costs. Any award you get in a court will never cover the cost of an IP litigator.”

REPUTATION

Perhaps more importantly for a well-established company such as Jack Daniel’s is the goodwill that comes from taking a positive approach.

“Jack Daniel’s comes out of that situation looking excellent,” Mr. Tracey says. “It really reflects well on them. The average consumer can relate to a company that solves its problems that way instead of sabre rattling.”

ODDS

Allyson Whyte Nowak, a partner at Norton Rose Canada LLP’s Toronto offices, says that the reason so many copyright infringement cases are solved out of court is because businesses are driven by the need for certainty. Litigation can take a long time and the outcome is unknown.

“I think there are out-of-the-box ways to try to achieve the certainty you ultimately can’t guarantee with a court action,” she says.

BRINGING IN A LAWYER

A good lawyer will lay out all possible options so the company can take the best course of action, Mr. Tracey says. Protecting IP is important, and a cease-and-desist letter may be in order. But even if legal action is taken, the conversation can remain positive.

“I don’t see a problem with your initial correspondences being in a very friendly tone,” he says. “You always have the opportunity to play hardball if things go south.”