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What the Grateful Dead taught us about business

The Grateful Dead is studied in business schools. Founded in the tie-dyed ’60s, the band had a social network that long predated the Internet. Dedicated fans gathered outside concert venues hours before their shows to swap bootleg recordings of past performances. Those recordings contained nothing but the band’s intellectual property, and not pursuant to anything so corporate as a licensing agreement.

The band didn’t share in the proceeds, but neither did it hire lawyers to blast out intimidating cease-and-desist letters. Jerry Garcia and bandmates understood it was a good thing, something to be encouraged, that fans loved their music so much that they spontaneously expanded the market for it. Moreover, turning Dead concerts into joyous all-day carnivals only added value to the experience, at no cost to the band itself.

Business professor Barry Barnes told The Atlantic that the Dead’s relaxed attitude about bootleg recordings “was not entirely selfless: It reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets.” Their business insight propelled the Dead, a group conspicuously short on hit singles, into the realm of the highest-grossing popular music acts in history.

Today there are business books about the Dead. University courses treat them as a case study. As someone with fond (if slightly hazy) memories of seeing the Dead in a California gym the better part of a lifetime ago, I can well believe values as much as calculation drove their decision-making. But that only shows good values can be good business.

An echo of the Dead’s approach to intellectual property law can be found in Netflix’s response to an unauthorized “Stranger Things”-themed pop-up bar in Chicago. In its letter, Netflix actually thanked the infringers for liking the show so much. It only asked that the bar’s run not be extended beyond its scheduled six weeks. And if the infringers wanted to do it again? Ask permission first, please.

As explained by the legal-gossip website Above the Law, Netflix understood that the bar was actually promoting the show, just as all those vendors of bootleg recordings were promoting the Grateful Dead. The network did include an implied threat if the stunt was pulled again, but even that was couched in a way designed to cement fan loyalty: “the Demogorgon is not always as forgiving. So please don’t make us call your mom.” (If you don’t know what a Demogorgon is, you have some binge watching to do.)

Contrast that to Aloha Poke, the recently-founded Chicago chain restaurant whose lawyers brought worldwide opprobrium onto the brand by sending a cease-and-desist letter to a far more authentic poke restaurant in Honolulu itself. The Midwesterners demanded that native Hawaiians stop using “Aloha” in the name of their restaurant. Reading about the controversy made me sorry the Chicago chain doesn’t have an Albuquerque branch, because I’d love to boycott it.

It’s easy for lawyers to think of protecting intellectual property as an end in itself. Certainly no lawyer wants to be responsible for a client losing valuable rights by failing to enforce them. But a trademark or copyright is valuable only to the extent it contributes to the success of the enterprise. The Dead and Netflix added value by acquiescing in limited infringements. Aloha Poke badly damaged its brand by doing what the law allowed.

Here in Albuquerque, many lawyers were watching to see what would happen when the Seasons 52 chain opened its restaurant in Coronado Center’s parking lot. Old Town’s Seasons Rotisserie and Grill has been around for years, and the newcomer had much in common with the old favorite: full bar, entrees from $20 to $35, elevated noise level. It looked like the ground was being cleared for a trademark donnybrook.

But Seasons 52 is owned by deep-pocketed Darden Restaurants, a Florida-based Fortune 500 corporation. And as a restaurant name, “Seasons,” with its modest pun, turns out to be common across the country. Every state seemingly has one. Lawyers for Darden, we can be sure, were confident they could win any trademark battle, if not by legal merit then by bleeding their opponent dry.

When life hands you lemons, as they say, make lemon-shallot beurre blanc sauce, or maybe we can tempt you with a housemade lemon-raspberry sorbet? Instead of fighting, the two restaurants jointly sponsored a full-page ad in the Journal, promoting themselves side by side, building their brands. Taking a non-antagonistic approach goes against the grain for many lawyers, and for competitive entrepreneurs, too, but sometimes it’s the secret to unlocking the full value of intellectual property.

Joel Jacobsen is an author and has recently retired from a 29-year legal career. If there are topics you would like to see covered in future columns, please write him at legal.column.tips@gmail.com.

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