Pep Talk: Intellectual property

It is a case from the mid-1980s I remember well. It was concerned with the notion of passing off, in this instance the use of a trademark considered to be similar to that of another business. The two protagonists were Laura Ashley and the wallpaper/home furnishings company Coloroll. The latter had developed a range of wallpapers that had a similar look to Laura Ashley's. This wasn't really the problem; the logo was. Coloroll's logo looked not unlike Laura Ashley's. It was an oval and had a sort of flowery arrangement inside it. So did Laura Ashley's. Whether consumers were inclined to think that there was some association between the two businesses is doubtful, but this wasn't of course the point; Laura Ashley's intellectual property and the goodwill and attributes of its brand were.

There is a very well-known global restaurant brand which has an establishment in Palma. Away from the capital, there is - or was - a restaurant that isn't globally known. Its name was very similar. Its logo was pretty much identical to the globally known brand. There was an application to register this as a trademark, which was seemingly and probably unsurprisingly opposed. Nevertheless, the restaurant with the similar name and logo operated for a season before changing the name the following season. The logo also changed, but not to the extent that this prevented a reviewer on Trip Advisor from still being able to comment on the similarity with a famous chain of restaurants.

The restaurant with the similar name and logo appears to be no more. At any rate, when I passed by the other day the sign was down and the "local" appeared to have been cleared. If it is no more, then it is a bit of a shame. It wasn't bad, and for the most part reviews on Trip Advisor agreed that it wasn't bad. But one does have to ask why it was felt necessary to apparently wish to imitate a very well-known restaurant. Surely some form of challenge had to be expected, which at best might mean having to go the trouble and cost of changing signs, menus etc. At worst, it might mean far more. Were the punters likely to have thought that there was a genuine association with the well-known brand? Probably not. In which case, why bother?

In Tenerife, lawyers acting for Gordon Ramsay are trying to find ways of dealing with a restaurant in Puerto Colon which has been trading by the name "Gordon Ransay's" for the past four years or so. You would think that, despite the alteration of one letter in the name, this is a clear infringement of intellectual property. Even with this one letter change, the script style of the restaurant's name could lead one to read it as "Ramsay", while the "R" is not a million miles away from the "R" that is in Ramsay's signature trademark. To make matters worse, this particular restaurant gets some rotten reviews. Ramsay has every right to be furious and to be frustrated by the difficulties encountered in tackling this apparent passing off.

Andema is the national association for the defence of trademarks and brands. Its director-general said recently that Mallorca and the Canaries were "black spots" for trademark falsification. He was speaking in the context of a product counterfeiting case involving a Chinese retailer who had been fined a mere 240 euros for selling a bag with the Louis Vuitton name. The reason for the low fine was that, though the retailer had acquired 1,075 pirated Vuitton bags, 1,074 of them were in a warehouse. Only one had been in the store.

Whether counterfeiting or passing off, the principle is the same; there is an attack on intellectual property, and I imagine most of us will be fully aware of the  counterfeiting that exists in Mallorca. No one is really duped into believing they're buying the genuine item (or at least you would hope they aren't), and while it might seem fairly innocuous to buy some fake sunglasses or what have you, the scale of the counterfeiting is anything but innocuous.

A national law of 2001 was designed to help protect large and well-known brands from infringements. How well it is being applied is perhaps a question that Gordon Ramsay might like an answer to, but there may nevertheless be a danger that it goes too far in undermining efforts of local entrepreneurs, such as those behind the successful Lemon Factory, makers of Pep Lemon. While the process of a challenge by Pepsi to its Pep Cola is ongoing, the company is marketing it simply as "Pep". There may be some similarity, but as everyone knows, Pep is a common name in Mallorca. Would anyone seriously mistake a Pep Cola for a Pepsi? No, but then such is the way with intellectual property.

Why Mallorca?: Business development

Why Tenerife? Without any explanation as to this question, an interpretation of it might be "what's the point of Tenerife?" On its own, it does sound odd, but the world (some of it) is going to get used to the question being posed. "Why Tenerife" is a slogan and it is intended to draw attention to what Tenerife has to offer for foreign investors, to its location as a hub for three continents (Europe, Africa and America) and to further develop international air and sea routes.

This initiative brings together various organisations on the island, such as the Tenerife Council and the Chamber of Commerce, who will share resources in advancing what they hope will be a new model of economic promotion for Tenerife. Key to the whole thing is a recognition that, or so says the vice-president of the Santa Cruz chamber, the only opportunity in current difficult economic times is to "look outside and to be attractive to businesses which might locate themselves (in Tenerife)".

Such an outward-looking attitude doesn't necessarily come easy to those with an insular mentality. Islands breed certain attitudes, and suspicion of outsiders, of whatever type, tends to be one. The presence of such an attitude might be denied by Mallorcans, but it prevails in Mallorca nevertheless, as no doubt it does in Tenerife, or has done.

There are similarities between Tenerife and Mallorca, other than attitudinal ones. The two islands' populations are virtually identical, Tenerife having fractionally more people than Mallorca, even if Tenerife is significantly smaller than Mallorca (roughly half the size). There is a similar reliance on tourism, but surprisingly perhaps, given that Tenerife is known for its greater level of all-year tourism, the annual volume of tourism is quite a bit lower than that in Mallorca (three to four million tourists lower).

Apart from tourism, Tenerife's economy has a similar mix to Mallorca's: agriculture, some industry, construction (not that there is much of this at present) and ambitions for further developments in the world of information and communications technology. One advantage that Tenerife enjoys over Mallorca is its status as a special tax zone, which means a considerably lower rate of corporation tax. This status is a recognition of a natural disadvantage, being stuck out in the Atlantic; Mallorca may suffer from being isolated but not as much as Tenerife does.

But this isolation, tax advantage or no tax advantage, is just one reason why attempts at attracting foreign investment might be difficult. And for Tenerife, read also Mallorca. If there were to be a similar campaign for Mallorca - a Why Mallorca? campaign - what would be the benefits? Any?

Economic diversification for Mallorca is essential, but there are several obstacles to inward investment or to that which might mean more than just small amounts of employment opportunities. One of them is the standard of education (in the public education sector at any rate), a problem shared with Tenerife. This might not matter if investment requires primarily manual skills, but information technology, if this is to be the key to diversification (and Mallorcan politicians keep insisting that it is), tends to demand rather more than the local education service can offer; the Balearics and the Canaries both underperform badly.

Other problems are ones that are all too familiar: political capriciousness, the result of government changes, trade-offs between coalitions and a general absence of any form of consensus across the political spectrum; political favouritism and suspicions or examples of corruption; environmental challenges and legal decisions that can take even businesses with the best due diligence by surprise.

A further problem, at least at present, is a structural one in government. It is one that is being highlighted by the planned introduction of the environmental tax for large retailers and the car-rental sector. The minister overseeing this tax, the vice-president, José Aguiló, is also meant to be the minister for business and employment. How on earth he reconciles these roles by going around looking to slap taxes on businesses I have no idea. It makes no sense to have one minister in charge of such potentially competing portfolios.

The fact that there is a minister with joint responsibility suggests that the government has not thought through what its commitment to business development might be. Indeed, does it actually have one? It would argue yes, but the evidence suggests no. This is a government interested in the short-term and the short-term alone. Its strategy for business is a shambles, which is a compliment in that it suggests that there might actually be one.

In Tenerife, they are at least trying. In Mallorca, they are not even doing that. Why Mallorca? Who knows.


Any comments to andrew@thealcudiaguide.com please.