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A legal feel to “look and feel” suits?
ABSTRACTS
bles and costs fail. The early entrant can t discourage followers via p ce cutting and ability to support h:;!vy introduc expenses. The pioneer’s brand comes synonvmous with the p (e.g., Kleenex tissues. Jell-0 Wal kman). There are. however. several possi tages. Estimating market demand seemingly promising markets can quickly disappear (e.g., CB radios). Further. the technology or product design that will eventually dominate as the industry standard is unclear (e.g.. VHS technology displaced the Beta format in VCRs). Finally, the pioneer must spend heavily to educate buyers and build demand.
The advantages to a follower strategy center on lower costs and risks. The pioneer takes the risks of knowing that the market is really there (e.g.. entered mainframe computers after Sperry ntroduced personal computers following Apple but built significant leads over both). The follower can lea4m from the pioneer’s trials and tribulations (e.g. q RCA as an early entrant in color TV learned that demand for color TV was still years away). Follow,crs can also introduce superior manufacturing techniques (e.g.. Texas Instruments bested Bowmar in hand-held calculators by capitalizing on superior manufacturing technologies, forward integration and cost eticiencies not available to Bowmar). Additionally, followers can introduce products with superior design attributes. Final!y, followers can fine-tune the pioneer’s marketing mix (e.g., Bat-ties and Jaymes improved on pioneer California Cooler by designing a more sophisticated, wine-type package and by removing all the fruit sediment to make the product look and taste more like wine). The major disadvantage facing tht follower is that the pioneer’s position might be unassailable, even if the follower spends heaviiy on R&D roduct improvement and marketing (e.g., Aneuser-Busch has been unable to beat Miller in Eight beer). Overall, perhaps the most important considerations in choosing between pioneering and followhether there is an unmet potential size of the ma eveiopment costs. Prior studies have shown that common elements of pioneering in-
223
eluded superior quality . superior service, Iower direct costs and tower selling prices. all r-dative to actual and potential competition (e.g.. Federal Express failed with Zap cause it did not deliver on these key criteria relative to existin services. Also. the sustaina uct-market leadership position should be assessed. This is a function of the rate of technology diffusion as determined by patents. trade secrets and the like. Also important is that pioneers can continually introduce innovative product modifications. Additionally, consideration should be given to the pioneer’s ability to define the rules of the competitive game and to institutionalize its first mover advantages through establishing sustainable competitive advantages. such as reputation for quality and searvice, high share of voice, freedom of voice in channel selection and de facto definition of category standards against which later entrants are judged. On the other hand, the feasibility of successfully following can also be weighed. Important considerations here include ability to build consumer brand recognition and to fine-tune the pioneer’s product and marketing mix. plus awareness of changing societal trends which might impact on the market (e.g., Heinz’s Weight Watchers focused only or dieting women whereas Nestle’s Lean Cuisine broadened beyond weight loss to health and well-being).
A Legal Feel to “Look and Feel” Suits? Steven A. Meyerowitz, Business Marketing (December 1988). pp. 49-51 (JLB) Current litigation in the complex arena of computer software will shed light on innovators’ ability to protect the format in which a software program is presented to the user-its “look and Inc. has filed infeel.” Apple Computer fringement suits against Microsoft Corp. and Hewlett Packard Co. because they utilize a screen that presents a desk top image allowing users to perform such tasks as erasing documents by “visually dragging them to the onscreen image of a garbage can.” In addition, Lotus is suing erback Software International and Mosaic Software for their clothing of l-2-3 spreadsheet instructions, menus and visual displays.
ARKTRACTC
None of the suits alleges plagiarism of the actual source or object code. The coding i:self i$, clearly protected by copyright. a legal battic softwart: writers won several years ago. Rather. suits are aimed at the imitation of user interfaces: input and output screens. formats. menus. command structures and the ways in which the user interacts with them. The inclusion of these user interfaces under a program’s copyright umbrella may actually be more important to marketers than protection of the code itself. If users feel comfortable with the personal interaction offered by the program. this will be a key factor in the program’s popularity. If this interactive presentation is legal!;4 clonable. the advantage of being first to market could be considerably lessened. yet the risk of investing large amounts of money in the development of innovative software will continue to be high. The suits hinge on the interpretation of a software program’s user interface as either an idea. which is not copyrightable. or an e.~~~~ssi~n of the idea. N hich is. In S_MCY<*O~IZ Tdttd~gy u. W~tiwrsir_v Corq~rriirtg. the court ruled that the format of input screens was inseparable from the idea of the program itself, and therefore no copyright infringement could exist. But, in Wirckrrr A.~wh~tc~s K Jtdow l3ertttrl Lhmrtor~. the court found that other software packages xcomplished the same end \t*itl~c~! using the same screen displays. The screens were therefore held to be a copyrightable expression of the program’s concept or idea. A similar finding was issued in L+c~dt~:*l~rrncr’i v. U~tisw~ World. Another district court later interpreted Wiwlm much more narrowly. The court utilized the precedent only to the extent that the similarity of menus and screens is evidence of plagiarism of the code itself. The outcome of the new litigation wiir affect both new product rnnouators and their close-on followers. If the “look and feel” of ;t softuvarc package is protected by copyright. the innovator’s position in the market ic greatly enhanced. His program will not only be unique in the marketplace when introduced, but will remain unique throughout its product life. in form if not in function. If it is not protectable, followers urili feei free to go beyond mere c~~~~~~t~b~~~t~~ to imitate the input and TV u\ers have come to know an
Causes of New Venture Faike: 1960s vs. b!N%, Albert V. Bruno and Joel K. Leidecker. B~~.sirzrss Hcwizorts (November -December 1988). pp. 51-56 (AAB) The business failure rate in the United States has risen steadily since 1978 and reached a level of 120 failures per 10,000 companies in 1986. Dun and Bradstreet statistics show that over 50,000 businesses are discontinued each year, with incompetant management responsible for nearly 90% of these failures. To what extent are failed firms founded in the 1960s different from those founded in the 198Os? The authors compared IO firms founded in Califoril;z:’E qilicon Valley in the 1980s with 12 firms founded in the 1980s. All of the firms were founded by engineers or scientists, emphasized R&D and had strategies based on utilizing new technology. Each of these firms was interviewed to determine the major and minor reasons for failure. Eleven reasons for failure were cited by both in the 1960s firms and the 1980s firms, along with two additional reasons in the 1980s. arket Reasons Product timing. While product timing was cited by both study groups. there was a shift in emphasis from p~‘m~~tw~~ market entry in the 1960s to the more serious problem of lait market entry in the 1980s. Perhaps the marketplace had to be sold more 011technology-based products in the 1963s. Product design. This reason was mentioned by founders from both periods. The planned product design time or budget could not be met because of the inability to develop a working prototype irom the original design criteria or because of the in:iWity to produce a marketable product from a working prototype, iate distribution or selling stratason was mentioned more by the 19HIs firms. probably because more channels are available now than in the 1960s. More channels should make the matching of product types. es and ..3lannels somewhat easier. SC
.T wse
the
bles and costs fail. The early entrant can t discourage followers via p ce cutting and ability to support h:;!vy introduc expenses. The pioneer’s brand comes synonvmous with the p (e.g., Kleenex tissues. Jell-0 Wal kman). There are. however. several possi tages. Estimating market demand seemingly promising markets can quickly disappear (e.g., CB radios). Further. the technology or product design that will eventually dominate as the industry standard is unclear (e.g.. VHS technology displaced the Beta format in VCRs). Finally, the pioneer must spend heavily to educate buyers and build demand.
The advantages to a follower strategy center on lower costs and risks. The pioneer takes the risks of knowing that the market is really there (e.g.. entered mainframe computers after Sperry ntroduced personal computers following Apple but built significant leads over both). The follower can lea4m from the pioneer’s trials and tribulations (e.g. q RCA as an early entrant in color TV learned that demand for color TV was still years away). Follow,crs can also introduce superior manufacturing techniques (e.g.. Texas Instruments bested Bowmar in hand-held calculators by capitalizing on superior manufacturing technologies, forward integration and cost eticiencies not available to Bowmar). Additionally, followers can introduce products with superior design attributes. Final!y, followers can fine-tune the pioneer’s marketing mix (e.g., Bat-ties and Jaymes improved on pioneer California Cooler by designing a more sophisticated, wine-type package and by removing all the fruit sediment to make the product look and taste more like wine). The major disadvantage facing tht follower is that the pioneer’s position might be unassailable, even if the follower spends heaviiy on R&D roduct improvement and marketing (e.g., Aneuser-Busch has been unable to beat Miller in Eight beer). Overall, perhaps the most important considerations in choosing between pioneering and followhether there is an unmet potential size of the ma eveiopment costs. Prior studies have shown that common elements of pioneering in-
223
eluded superior quality . superior service, Iower direct costs and tower selling prices. all r-dative to actual and potential competition (e.g.. Federal Express failed with Zap cause it did not deliver on these key criteria relative to existin services. Also. the sustaina uct-market leadership position should be assessed. This is a function of the rate of technology diffusion as determined by patents. trade secrets and the like. Also important is that pioneers can continually introduce innovative product modifications. Additionally, consideration should be given to the pioneer’s ability to define the rules of the competitive game and to institutionalize its first mover advantages through establishing sustainable competitive advantages. such as reputation for quality and searvice, high share of voice, freedom of voice in channel selection and de facto definition of category standards against which later entrants are judged. On the other hand, the feasibility of successfully following can also be weighed. Important considerations here include ability to build consumer brand recognition and to fine-tune the pioneer’s product and marketing mix. plus awareness of changing societal trends which might impact on the market (e.g., Heinz’s Weight Watchers focused only or dieting women whereas Nestle’s Lean Cuisine broadened beyond weight loss to health and well-being).
A Legal Feel to “Look and Feel” Suits? Steven A. Meyerowitz, Business Marketing (December 1988). pp. 49-51 (JLB) Current litigation in the complex arena of computer software will shed light on innovators’ ability to protect the format in which a software program is presented to the user-its “look and Inc. has filed infeel.” Apple Computer fringement suits against Microsoft Corp. and Hewlett Packard Co. because they utilize a screen that presents a desk top image allowing users to perform such tasks as erasing documents by “visually dragging them to the onscreen image of a garbage can.” In addition, Lotus is suing erback Software International and Mosaic Software for their clothing of l-2-3 spreadsheet instructions, menus and visual displays.
ARKTRACTC
None of the suits alleges plagiarism of the actual source or object code. The coding i:self i$, clearly protected by copyright. a legal battic softwart: writers won several years ago. Rather. suits are aimed at the imitation of user interfaces: input and output screens. formats. menus. command structures and the ways in which the user interacts with them. The inclusion of these user interfaces under a program’s copyright umbrella may actually be more important to marketers than protection of the code itself. If users feel comfortable with the personal interaction offered by the program. this will be a key factor in the program’s popularity. If this interactive presentation is legal!;4 clonable. the advantage of being first to market could be considerably lessened. yet the risk of investing large amounts of money in the development of innovative software will continue to be high. The suits hinge on the interpretation of a software program’s user interface as either an idea. which is not copyrightable. or an e.~~~~ssi~n of the idea. N hich is. In S_MCY<*O~IZ Tdttd~gy u. W~tiwrsir_v Corq~rriirtg. the court ruled that the format of input screens was inseparable from the idea of the program itself, and therefore no copyright infringement could exist. But, in Wirckrrr A.~wh~tc~s K Jtdow l3ertttrl Lhmrtor~. the court found that other software packages xcomplished the same end \t*itl~c~! using the same screen displays. The screens were therefore held to be a copyrightable expression of the program’s concept or idea. A similar finding was issued in L+c~dt~:*l~rrncr’i v. U~tisw~ World. Another district court later interpreted Wiwlm much more narrowly. The court utilized the precedent only to the extent that the similarity of menus and screens is evidence of plagiarism of the code itself. The outcome of the new litigation wiir affect both new product rnnouators and their close-on followers. If the “look and feel” of ;t softuvarc package is protected by copyright. the innovator’s position in the market ic greatly enhanced. His program will not only be unique in the marketplace when introduced, but will remain unique throughout its product life. in form if not in function. If it is not protectable, followers urili feei free to go beyond mere c~~~~~~t~b~~~t~~ to imitate the input and TV u\ers have come to know an
Causes of New Venture Faike: 1960s vs. b!N%, Albert V. Bruno and Joel K. Leidecker. B~~.sirzrss Hcwizorts (November -December 1988). pp. 51-56 (AAB) The business failure rate in the United States has risen steadily since 1978 and reached a level of 120 failures per 10,000 companies in 1986. Dun and Bradstreet statistics show that over 50,000 businesses are discontinued each year, with incompetant management responsible for nearly 90% of these failures. To what extent are failed firms founded in the 1960s different from those founded in the 198Os? The authors compared IO firms founded in Califoril;z:’E qilicon Valley in the 1980s with 12 firms founded in the 1980s. All of the firms were founded by engineers or scientists, emphasized R&D and had strategies based on utilizing new technology. Each of these firms was interviewed to determine the major and minor reasons for failure. Eleven reasons for failure were cited by both in the 1960s firms and the 1980s firms, along with two additional reasons in the 1980s. arket Reasons Product timing. While product timing was cited by both study groups. there was a shift in emphasis from p~‘m~~tw~~ market entry in the 1960s to the more serious problem of lait market entry in the 1980s. Perhaps the marketplace had to be sold more 011technology-based products in the 1963s. Product design. This reason was mentioned by founders from both periods. The planned product design time or budget could not be met because of the inability to develop a working prototype irom the original design criteria or because of the in:iWity to produce a marketable product from a working prototype, iate distribution or selling stratason was mentioned more by the 19HIs firms. probably because more channels are available now than in the 1960s. More channels should make the matching of product types. es and ..3lannels somewhat easier. SC
.T wse
the