Nike has had extreme success marketing their subsidiary Converse in recent months. Sales from Converse increased 28% in the last economic quarter, bringing the revenue to about $538 million dollars. Although officials at Nike are crediting the success of Converse to "better distribution in the US and Europe". While this may account for a portion of the sales increase, there is certainly more to the story.
Last fall, Nike filed lawsuits against 31 different companies, claiming that these companies were infringing upon the trademark of Converse shoes. As the article states, Nike claimed to have sent around 180 cease and desist letters to the companies in an effort to stop production. However, this didn't seem to be working well enough, so Nike took the issue to court. The court cases have resolved mostly in Nike's favor, as many settlements have been reached. Citing one specific example, the article explains that designer Ralph Lauren has "agreed not only to pay Converse monetary damages, but it also would be required to destroy all infringing shoes".
Would you say that Nike's strategy of using trademark lawsuits to earn monetary compensation and increase their market is a fair practice?
2 comments:
Nike's strategy is technically fair, but what it is doing constitutes sort of a more ethical issue regarding making money. Preying on perceived infringements isn't really something that looks good for a company as big as Nike. However, given Nike's track record with other not so savory issues, it may pale in comparison. Because this method works, Nike is just going to continue it, and I think no one is really going to try to actively call them out on it.
I think Nike's strategy of using trademark lawsuits is perfectly fair game. They created a brand that works and there is no doubt that many companies have tried to create similar designs off Nike's Converse. I don't think this is that harmful (if at all) to Nike's image, since many customers value and respect the brand Converse. Additionally, in terms of protecting their image, Nike has bigger issues to worry about (if they are worried), like the well-known use of horrid and dangerous sweatshops in other countries.
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