Qwikster, branding and intellectual property

Less than two weeks ago, Netflix launched Qwikster, its DVD and Blu-Ray spinoff. The Internet balked, with public outcry greater than even for the hated new Facebook format. Soon, Netflix relented, "86-ing" Qwikster in favor of DVD and Blu-Ray rentals via Netflix. No word yet on whether the company still plans to expand into the world of video games.

The Qwikster debacle offers a teachable moment about branding and intellectual property. Not only did Netflix not do marketing research before taking the leap; it also didn’t do due diligence regarding IP and the company brand. “Qwikster” isn’t a very new brand name: several companies have used similar names. These include Quixtar (the Internet-based version of Amway), QuickStar (a fax and software utilities company), Quickster (a brand of portable sports nets), Kwik Star (a Midwest convenience store chain) and Quik-Star (a lapping unit).

While the schadenfreude gleaned from the Qwikster debacle is certainly amusing, there’s a broader point for the world of IP: do your research. While Qwikster and Kwik Star might not be remotely similar to a reasonable person, that doesn’t stop an opportunistic company from making hay off of a lack of due diligence.

Such opportunism can work one of two ways: First, a smaller company might decide it has a chance at a quick settlement from a company too big to care about fighting a lawsuit. Willing to accept any settlement, the smaller company files suit, and the larger company is out a relatively small but significant sum because it didn’t do its research. On the other hand, a smaller company can easily fall prey to a predatory larger company banking on its inability to defend itself in court. In this case, the smaller company can either fight the matter in court and hope for a win, offer a payment less expensive than a lawsuit but still plenty painful in the pocketbook, or give up its intellectual property to the larger, predatory company.

In the Internet age, it’s far easier for people to find out that your company’s name once belonged to a foul-mouthed rapper or a failed Internet start-up from the dot-com era. While this negatively impacts branding, the issue of intellectual property can be far more pressing for the reasons stated above. In the past, a company in California and a company in Florida could operate with the same name with little impact on branding and no waves made regarding intellectual property. In the 21st century, you have nowhere to hide when you — even inadvertently — infringe on the intellectual property of another company. Indeed, we might even see a whole cottage industry devoted to helping the Kwik Stars and Quicksters of the world get theirs from the Qwiksters.

Sound far-fetched? Consider the cease-and-desist Kellogg filed against the Maya Archaeology Initiative. Kellogg claimed that MAI’s logo looks an awful lot like Toucan Sam, who they also assert hangs out around “Mayan imagery.” Strange but true, this lawsuit might be frivolous, or it might not be. One thing it is for sure, however, is a big headache for everyone over at MAI. Protect your IP by doing due diligence and not letting yourself fall prey to IP lawsuits or branding confusion.