The “sharing economy” seeks to empower consumers by freeing them from the burdens of ownership. The savvy CEO may wonder: How can the collaborative crowd distinguish counterfeit product from my trusted trademarked or copyrighted products? How can my company remain profitable when consumers eschew new branded goods and services? In fact, the CEO should take comfort in knowing that the brand’s intellectual property remains relevant and valuable in the sharing economy.
Companies like Lyft, Uber, and AirBnB and hundreds of startup businesses have taken advantage of social media technology to meet consumers’ demand for sharing. At the same time, major brands, like Patagonia, BMW, and Marriott, have entered this space, launching innovative branding platforms to remain relevant. Ironically, the sharing economy offers unique opportunities for traditional companies who have well-known, high quality products or services.
Defining Characteristics of the Sharing Economy
Indeed, the sharing economy thrives only in an atmosphere of trust. In fact, the Federal Trade Commission’s November 2016 report on the sharing economy focuses on trust mechanisms that facilitate seller and buyer satisfaction. The crowd’s testimonials and peer confirmation fuel the sharing economy as much as, if not more than, brands’ own marketing efforts. Reputation rating systems and related technologies feed day-to-day consumption, rather than traditional advertising models. Inevitably, brands relinquish some control over the channels of distribution in the sharing economy.
The collaborative nature of the sharing economy, thus, seems to clash with intellectual property’s monopoly concepts. At the same time, however, a recognizable trademark still assures consumers that a product or service can be trusted to deliver a predictable, reliable level of durability and performance.
The sharing economy suggests changes to the way companies do business, the way consumers interact with brands, and the expectations consumers have for their lives. Companies need to adapt if they are to thrive in this new world, sharing their proprietary rights while standing guard against interlopers. By proactively joining the sharing economy and leveraging their trusted intellectual property, traditional brands may increase sales and further develop their intellectual properties’ good will and value. Concurrently, they should seize the opportunity to shape the legal landscape, the marketplace, and the peer-to-peer mindset.
Guidance for CEO and other C-Suite Executives
As brands transition into the sharing economy, they should not disguise themselves as just “one of the crowd.” Instead, they should utilize both traditional and new technologies to disseminate a message that they are, indeed, still relevant.
To maintain the value and strength of their intellectual property, the following principles should guide the CEO and other c-suite executives:
- Be vigilant to ensure proper usage of trademarks.
- Enforce existing intellectual property licenses.
- Develop creative licensing strategies for businesses marketing your goods and services. Make sure those license agreements have robust quality control measures to protect reputation and prevent abandonment of intellectual property.
- Police the marketplace for false impressions of affiliation.
- Partner with sharing providers to offer certification programs that provide assurances to the consuming crowd.
- Consider launching new divisions or purchasing companies, allowing them to operate under the umbrella of your trusted brand, so as to better control distribution channels.
- Stay ahead of the curve by utilizing cutting edge techniques, such as native advertising, experiential marketing, gamified content, virtual reality, and co-branded relationships.
- Recognize that regulators are watching to ensure that consumers are not deceived. All advertising and marketing campaigns, no matter how innovative, remain subject to existing regulations for commercial speech.
- Work with other industry members to establish ethical marketing practices that foster consumer confidence and discourage regulators from taking action specific to this marketplace.
- Think strategically before approaching intellectual property infringers. Look for ways to avoid social media backlash by collaborating with those seeking to leverage your brand’s equity.
For a more in-depth look at the issues presented in this article, please see COLLEN’s white paper on the subject.