Editorial - by David Haigh, CEO Brand Finance on how Apple has grown up
Published on 18.03.2012 in Brand Finance Journal Issue 2
"Apple is the classic American corporation, grasping and carefully managing all forms of intellectual property in order to generate super-profits"
BACK IN THE 1970s, in a small suburban garage in Los Altos, California, two college dropouts, Steve Jobs and Steve Wozniak, began to develop their interest in state-of-the-art technology. No one then could have predicted that from such humble beginnings a multinational corporation would emerge, or that Apple Inc would become a rapidly rising star in the American business firmament. There is a sort of symmetry, therefore, that within months of the death of founding CEO Jobs, Apple’s star has never shone more brightly. Indeed, it has just earned the accolade of most valuable global brand in the 2012 BrandFinance® Global 500.
Apple presents itself as the creative leader of its industry, governed by West Coast designers and trendy tech experts who fused their respective passions to create a brand that exploded onto the global stage. From the Apple Mac and iBook, through the iPod and iPhone, to the iPad, Apple’s products have generated legions of devotees across the world, their loyalty to the brand unprecedented in the previously grey technology market.
But while Apple was started by two Californian rebels in the hedonistic 1970s, the business itself has developed and changed over the years almost as much as its products have. The hippy image that it may wish customers to associate with it couldn’t be further from the truth. In reality Apple is the classic American corporation, grasping and carefully managing all forms of intellectual property in order to generate super-profits. Aggressive and highly professional, it is ready to litigate against anyone who stands in its way.
Between January 2008 and May 2010, Apple filed more than 350 cases with the United States Patent and Trademark Office, after taking exception to other organisations’ use of terms such as ‘apple’, ‘safari’ and ‘pod’. Detractors have accused its legal department of being overly vexatious — that is, bringing action solely to harass or subdue an adversary. And you can see why: no one, it seems, from The Beatles to a supermarket, is safe from their legal challenges.
One of the highest profile disputes - between Apple Inc and Apple Corps, the record label and holding company founded by The Beatles - lasted for 30 years.
It began in 1978 when Apple Corps filed a lawsuit against Apple Computer for trademark infringement. Apple Computer defended itself tirelessly until 2007 when the two parties reached a confidential agreement (reputed to be worth $500 million) under which Apple ultimately secured all the trademarks related to ‘Apple’. However Apple Inc licenses some of these trademarks back to Apple Corps for its continued use.
Even New York’s ‘Big Apple’ moniker has been attacked by these enthusiastic litigants, who declared the apple design infringed their trademark. Currently Apple and Samsung are engaged in 19 different lawsuits across ten countries over mobile phone patents. Vexatious litigation has become Apple’s own particular brand of urban warfare, helping to secure its position as a US corporate leviathan.
This position has been bolstered further still by Apple’s closer relationship with the business market. To counter scepticism about the relevance to the corporate environment of its highly designed ‘creative’ products, Apple has dedicated entire sections of its website to showcase the use of its products by the likes of Standard Chartered Bank, Hyatt Hotels and GE.
As the BrandFinance® Journal goes to press Apple has just won a patent dispute against Motorola in relation to the ‘slide to unlock’ feature on smart phones. I expect that this will be just one of many courtroom decisions soon to affect the technology market and the wider business world. But while Apple’s tactics have their critics, they are impressive, not least in the way they demonstrate how the assiduous management of intangible assets can help a company to exploit its potential.
The importance of patents, trademarks and brands can’t be overestimated: they are critical in driving revenues and establishing corporate reputations. Apple is proud of its genesis in a suburban garage in sunny California, but it should be equally proud of how well it has grown up.
Questions? Please contact us directly:
+44 (0) 20 7389 9400