Dragons' Den: where entertainment meets mis-advice?

Following a recent exchange of correspondence, this Kat welcomes the following guest post from Brandsmiths' Andrew Lee on a matter which should be of interest to us all: the dissemination of misinformation or at least over-generalised information to a wide audience of people who may not realise its true import.  This is what Andrew writes:

Dragons' Den: would a cat give better IP advice?

Dragons’ Den is not only an entertaining show: it provides a genuine platform for entrepreneurs to get a start in business. There have been some great success stories. The show format is used worldwide. Apparently the show originated in Japan and the format is owned by Sony Pictures Television. After watching last Sunday’s show it got me thinking as to the potential impact of what some of the things the Dragons say could have. IP is at the heart of almost all the entrepreneurs’ ideas on the show, and the Dragons are never shy about dishing out IP advice.

Taking the UK show as an example, we have some of the most influential business people in the UK very often using their perceived knowledge of IP as a basis for investing (or not) and often being quite scathing about the inventions that feature in the programme. The comments on IP are quite often, in material respects, either wrong or certainly grossly overstated. At the very least they have the propensity to mislead the lay person and other inventors.

An example from last Sunday’s programme will suffice. One of the entrepreneurs had brought on to the show his “IGlove” (www.iglove.co.uk). This was a glove that could be worn and would work with most touchscreen devices. He had secured trade mark protection for the “IGlove” mark. He did not however have a patent covering the invention at present.

Peter Jones quite animatedly dismissed the product because, according to him, Apple would sue and win. There would be no defence. This is a view that Lord Sugar has endorsed since the show went out. Jones’ views were effectively that only Apple could use the letter “i” in this field of activity. Deborah Meaden agreed and went further, saying that Apple would be able to take all profits generated through sales of the glove, no matter how ancient. There was also a view expressed that, because there was no granted patent, the product had little value.

The point Peter Jones made is in my view, without more, wrong and certainly indicative of the Dragons’ typical over confident approach to their knowledge of IP rights. First, from a quick search of the IPO website I cannot see that Apple have a registration for “I” alone. They have registered as trade marks the words iPad and iPhone, among others. So where does their infringement claim against iGlove arise? A Trade Marks Act 1994 s.10(2) case [= Art.5(1)(b) of Directive 2008/95: likelihood of confusion on account of similar marks and identical/similar goods], perhaps, or passing off? But is anyone really going to be deceived, confused or assume some form of commercial link? The courts are naturally entitled to make up their own mind without evidence but, without such evidence, I think a court in this case would find the lack of any evidence of deception/confusion as telling. Or does the claim sound in infringement under s.10(3) [= Art.5(2) of Directive 2008/95: use without due cause, taking advantage of or causing detriment to the repute or distinctive character of an earlier mark]? Assuming the difficult (in my view) hurdle of establishing a link between iGlove and one of Apple’s marks is made, I do not see this as being a unfair advantage or “coat-tails” free-riding type of case. Nor do I think there is any real prospect in Apple demonstrating dilution or a change or likely change in economic behaviour of Apple’s customers. In my opinion the notion that iGlove would infringe any Apple mark is rather fanciful.

As for Deborah Meaden’s assertion that “all” profits generated from the sales of the product could be secured by Apple – I think that this is incorrect too. With any account of profits, my own view is that the successful claimant is only entitled to compel the infringer to disgorge profits that can be shown to have been attributable to the infringement itself. Logically, there must be some profit generated from the customer’s purchase that is untainted by trade mark infringement, such as that which relates to what the product actually does and the technology behind it, packaging etc., rather than being derived from wrongful use of the brand name alone. That must be so in this case where the customer is buying the product because of what it does when it solves the problem of the difficulty of wearing gloves while operating a hand-held mobile device.

Dragons' patent portfolio?

There are regularly things said by the Dragons which require some scrutiny. First the “product without a patent is useless” approach. This misses the point that often the key driver in a product and what makes it attractive is the brand itself and the way the customer is dealt with and looked after. Secondly, the Dragons (often Duncan Bannatyne) can be heard unequivocally stating that a granted patent is worthless and not worth the paper it's written on. This is to dismiss the protection accorded to an invention too readily in my view. Unlike applications for registered designs, which usually go through on the nod, patents are subject to detailed scrutiny. That is not to say that all patents are valid: almost every patent claim is met with a counterclaim for invalidity. Maybe the Dragons should have taken careers up as patent attorneys or patent judges if they can dismiss a granted patent so simply – maybe they could help Mr Justice Arnold reduce the length of his judgments?

On a more serious note, the point in all of this is that it can be dangerous when such influential business people are given free rein to comment on these issues. Their audience is wide and naturally what they say will be given some force by the lay person. The difficulty is that everyone then becomes a back-room lawyer and, in the operation of their own businesses, may make mistakes such as making groundless threats of infringement or not taking allegations of infringement by others seriously where proper advice, from a specialist, could save them a lot of hassle and money.

This Kat is fascinated by the power of the Dragons to shape popular understanding of IP concepts and issues, and wonders how far it may extend. After all, entrepreneurs who fail to make use of patents on the understanding that it is of no use, or those who mistakenly settle infringement claims on terms less favourable than they should, are unlikely to show up on any sets of official statistics.  He also notes that the show's website carries no obvious disclaimer concerning the accuracy or reliability of legal statements made on the show, whether in general terms or in relation to specific situations. While he would not expect the courts to conclude that such liability, he observes that he is living in a society in which disclaimers and warning notices are everywhere, right down to the message on his package of Brazil nuts that it may contain nuts. The real risk, he thinks, is not that the Dragons will be liable for mis-stating the effect of IP law but that others may expend time and money in a futile cause because they think they are so liable.

Trunki: Dragons' Den reject make good here
Dragons' Den recommendations as to where businesses pitching on the programme might go for business and entrepreneurial advice here
Puff the Magic Dragon here and (on YouTube) here