The Miracle of Cupertino

For Chapter 4 -- "Spot On"

By Published on .

I don't know what was going on in Apple Computer's corporate mind when it didn't sue Masters for his lovely viral paen to the iPod Mini. I certainly believe, though, that the episode was a turning point in American industrial history. Not the charming spot itself, but what Apple did in response:


It was the Miracle of Cupertino. No cease-and-desist letter. No trademark-infringement lawsuit. Not even a press release to distance itself from this MP3 groupie -- a non-reaction that Apple refused to discuss with we, but which no doubt had the corporation's trademark lawyers apoplectic. Because everybody knows things aren't done that way. Since time immemorial, there is a universal corporate protocol for handling unsolicited ideas, and it isn't silent acquiescence.

"The letter's opened up and somebody starts reading it and says, 'Ah, we have to send this to legal,'" says Carla Michelotti, senior VP-general counsel of the Leo Burnett Co. "And the legal department returns it with great courtesy."

It was ever thus, because nobody wants to be accused of stealing an unsolicited idea, because the submitter can't guarantee ownership of the idea himself, because legal already has its hands full doing due diligence on the product claims, artists rights and other legal ramifications of the agency's own output, and because brand names and trademarks are priceless assets which must be protected from abuse by outsiders, no matter how well-intentioned.

Have a grrrrreat! idea for Tony the Tiger mauling a flamboyant Austrian magician? History declares don't bother.

"I can't move into your backyard and just decide what to do with your landscaping," Michelotti says. "It's trespassing. It's taking somebody else's property."

Quaint as that view may sound in the internet age, when desktop publishers deem "fair use" to mean every single paragraph, song or image they can cut and paste, Michelotti is still accurately summarizing the law. When Viacom filed a $1 billion lawsuit against YouTube for trespassing on intellectual property, it may have been testing the limits of the new Millennium Copyright Act, but by all previous statutes and case law on the issue, the suit was a no brainer. Millions of computer owners out there are running digital chopshops, and YouTube is the showroom for the stolen property.

That's why Apple's action – i.e., it's conspicuous inaction – was such a watershed. It demonstrated a new calculus for the digital age. By demonstrably failing to be vigilant about its trademarks, it signaled that the enormous value of a closely protect brand may be exceeded by the value of an open-source one. Yes, subsequent attempts to litigate against infringers will be more difficult, but the worldwide Apple audience – already more cult than marketplace – suddenly has been empowered with the privileges of membership.

If brand loyalty is important to you, there is no greater asset. On balance sheets, it is called "goodwill." With the Masters episode, Apple, for itself and others, unlocked what may ultimately amount to trillions of dollars worth of goodwill.

"The centralized model is essentially inside out," says James Cherkoff, a London marketing consultant who penned an online manifesto on open-source marketing. "You create all the messages and you send them out. The new model is outside in: What you want to do is receive all the information you can from the outside and incorporate them in the processes of the company. They have to actually open up their own systems and the way they interface with the world."
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