Breast Cancer in Hispanic PopulationsNR502 ProposalSession, .docx

Breast Cancer in Hispanic Populations
NR502: Proposal
Session,
NOTE: This is a template and guide. Delete all highlighted
materials.
Running head: Breast Cancer in Hispanic Populations1
Breast Cancer in Hispanic Populations1
Breast Cancer in Hispanic
Populations
Note that there is no heading that says Introduction. The
paragraph or two that follows the title on the first page of your
text is assumed to be your introduction. Your introduction
follows the title of your paper (note that the title is not bolded).
You should start your introduction with a powerful statement or
two to stimulate interest. You should identify the purpose of
your paper. Remember that formal papers are in third person, so
no I, me, we except in specified areas. The introduction should
include the purpose of the project and the Methods (Literature
review). 1 page
Significance of the Practice Problem
Start this section with identification of the practice problem.
This section should also answer the question “why is this
important?” You should address the significance to the
patient/client (e.g., pain, suffering, quality of life, impact on
income potential, etc.), the family, healthcare system (e.g.,

impact on cost or delivery systems), and society (e.g., cost of
care, need for healthcare policy). Discuss the incidence and/or
prevalence and include the financial impact if possible. You
might discuss the impact on length of stay, readmission, home
health care requirements, disability and/or mortality. Also, you
should address any quality, safety, legal, and ethical
implications. This discussion must be substantiated by citations
from professional literature. 1page
Research Question
Which are the determinants for a higher incidence of breast
cancer in the Hispanic population compared with African
Americans?
Objective
1. To identify which are the determinants for a higher incidence
of breast cancer in the Hispanic population compared with
African Americans.
2. To establish the incidence of Breast Cancer in the Hispanic
population and African Americans.
3. To analyze if those determinants are modifiable or not.
Theoretical Framework
This section should include the theoretical framework that
supports your MSN Project. Describe the theory or model that
served as the foundation for your project. This may be a nursing
theory. KOLCABA'S THEORY OF COMFOR. 2 paragraphs
Synthesis of the Literature
Synthesize at least 15 primary research studies attached and/or
systematic reviews; do not include summary articles. This
section is all about the scientific evidence rather than someone

else’s opinion of the evidence. Do not use secondary sources;
you need to get the article, read it, and make your own decision
about quality and applicability to your question even if you did
find out about the study in a review of the literature. The
studies that you cite in this section must relate directly to your
research question. This is a synthesis rather than a study-by-
study review. Address the similarities, differences, and
controversies in the body of evidence. One paragraph per article
(15 in total, the synthesis can be obtained from the abstract) 15
paragraphs 4PAGE
Practice Recommendations
So. . . using available evidence, what is the answer to your
question? This section is for you to summarize the strength of
the body of evidence (quality, quantity, and consistency), make
a summary statement, and based on your conclusions drawn
from the review, give a recommendation for practice change
based on scientific evidence. This would logically be the
intervention of your PICOT question. You might want to design
an algorithm and include it in as a figure. Perhaps you found
substantiation for usual practice, and you recommend
reinforcement and education regarding this best practice. What
you found on the articles 1PAGE
Project Description
The keywords that I will use for my search are: ……….
The results obtained from the study will contribute to
identifying ………..
Discussion and Implications for Nursing and Healthcare
Discuss the conclusions you can make from the project
evaluation results: review and answer your PICOT question.
Examine, interpret, and qualify the results. Discuss internal
validity and limitations of the project evaluation. Take into
account sources of potential bias and other threats to internal
validity, the imprecision of measures, and other limitations and
weaknesses of the evaluation (adapted from APA, 2010, p. 35).
Describe the implications of your project and the project

evaluation on nursing practice and healthcare. Do not overstate
the significance. Identify the impact on the appropriate
microsystem. Include any recommendations you have as a result
of this project and project evaluation. Also, include what you
might recommend with replication of this project and project
evaluation and your potential next steps for this practice
problem.1PAGE
Summary and Conclusion
The conclusion should start with a statement regarding the
intent of the paper and your achievement toward that intention.
Remember that the introduction is a preview, and this section
should contain a summary. 2 PARAGRAPH
When completed your summary and conclusion, do not include a
categorical conclusion, which means, that you should not
mention the results of your literature review, otherwise, this
would give the impression that your project has ended. It must
include the importance of what has been reviewed so far, and
the need to finalize the literature review in order to have a more
conclusive result.
References
Remember that this is a reference list rather than a
bibliography. A bibliography is everything you read to prepare
the paper but a reference list is only what you cited. If there is
not a citation for a reference, it should not be here. PLEASE
make sure that your references here and your citations
throughout the paper are in APA format. Take the time to make
sure that they are correct. We have already formatted the paper
for you with this template.

116
RESPONSES
DOES RUNNING OUT OF
(SOME) TRADEMARKS MATTER?†
Lisa Larrimore Ouellette∗
Professors Barton Beebe and Jeanne Fromer’s empirical tour de
force presents a strong challenge to the conventional wisdom
that there
are infinite potential trademarks.1 To be sure, the claim that
potential
trademarks, broadly defined, are inexhaustible is tautologically
true:
there are infinite combinations of letters and other symbols —
including
sounds and colors — any of which might serve as a mark.2 In
this sense,
the claim that we might run out of trademarks seems as absurd
as John

Stuart Mill’s concern that we might run out of music.3 But not
all marks
are created equal. Some combinations of letters are unwieldy or
un-
memorable; others have negative connotations. Beebe and
Fromer ar-
gue that the most valuable marks are common words, short and
pro-
nounceable neologisms, and common U.S. surnames.4 The
concern
about running out of these marks is far from absurd — just as
Mill’s
anxiety about running out of music makes much more sense
when con-
fined to three-note melodies such as the trademarked NBC
chimes,5 of
which there are only 469 possibilities.6
In this short space, I wish to laud the remarkable descriptive
contri-
bution of Are We Running Out of Trademarks? while sounding
a note of
caution on the normative implications. Beebe and Fromer’s
data con-
vincingly demonstrate that short, common word marks are
becoming
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
† Responding to Barton Beebe & Jeanne C. Fromer, Are We
Running Out of Trademarks? An
Empirical Study of Trademark Depletion and Congestion, 131
HARV. L. REV. 945 (2018).
∗ Associate Professor of Law, Stanford Law School. For very
helpful comments, thanks to
Daniel Ho, Mark Lemley, and the editors of the Harvard Law

Review.
1 Barton Beebe & Jeanne C. Fromer, Are We Running Out of
Trademarks? An Empirical Study
of Trademark Depletion and Congestion, 131 HARV. L. REV.
945 (2018).
2 See Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 162
(1995).
3 JOHN STUART MILL, AUTOBIOGRAPHY OF JOHN
STUART MILL 102 (Columbia Univ.
Press 1960) (1873) (“I was seriously tormented by the thought
of the exhaustibility of musical com-
binations. The octave consists only of five tones and two semi-
tones, which can be put together in
only a limited number of ways, of which but a small proportion
are beautiful . . . .”).
4 Beebe & Fromer, supra note 1, at 951.
5 NBC — Entertainment — Chimes, U.S. PAT. &
TRADEMARK OFF., https://www.uspto.gov/
trademarks/soundmarks/72349496.mp3; see also Trademark
“Sound Mark” Examples, U.S.
PAT. & TRADEMARK OFF.,
https://www.uspto.gov/trademark/soundmarks/trademark-sound-
mark-examples [https://perma.cc/A6GL-BTTW]. But note that
none of the other well-known
sound marks are such simple melodies.
6 See Oli Freke, How Many Melodies Are There?, PLUS (Nov.
6, 2014), https://plus.maths.org/
content/how-many-melodies-are-there [https://perma.cc/D54H-
ZMBF].
2018] RUNNING OUT OF (SOME) TRADEMARKS 117
depleted and congested, and they present a number of plausible

hypoth-
eses about the negative welfare impact of this trend.7 Their
findings
suggest that trademark policy has been based on false
assumptions and
should be closely reexamined. But their data cannot elucidate
the actual
costs of depletion or congestion — particularly without noting
how the
market will adapt to reduce these costs — and cannot reveal if
there are
countervailing benefits. Generating concrete evidence of these
costs and
benefits seems like a necessary next step before recommending
any sig-
nificant changes to the current trademark system. After
offering a laud-
atory evaluation of the value of Beebe and Fromer’s descriptive
work,
I explore why reforms in reaction to their research should
proceed cau-
tiously, and I suggest important avenues for future empirical
work to
build on these results.
I. TRADEMARK DEPLETION AND CONGESTION:
FROM ANECDOTE TO EVIDENCE
In a recent trademark case, the Second Circuit asserted that
“[o]ne
seller’s monopolization of a particular term does not deprive
competitors
of anything of value because the number of arbitrary or fanciful
marks
available for use is infinite.”8 No citation was given; the court
merely

echoed the conventional wisdom that trademarks are
inexhaustible.9
Similarly, forcing an infringer to change its mark has been
found to cre-
ate little competitive harm because “there are infinite other
names under
which defendants may continue to operate.”10 In some cases
where the
trademark is well-known, the “choice of a confusingly similar
mark, out
of the infinite number of marks in the world, itself supports an
inference
[of] bad faith.”11
While a few courts have recognized that competitively effective
marks might not be limitless,12 these judges have had no more
data to
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
7 Beebe & Fromer, supra note 1, at 950–53.
8 Guthrie Healthcare Sys. v. ContextMedia, Inc., 826 F.3d 27,
42 (2d Cir. 2016).
9 See, e.g., Union Nat’l Bank of Tex. v. Union Nat’l Bank of
Tex., 909 F.2d 839, 847 n.18 (5th
Cir. 1990) (“Much of trademark law seems predicated on the
assumption that there is an infinite
universe of acceptable words for businesses to choose for their
names . . . .”); Mead Data Cent., Inc.
v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1037 (2d
Cir. 1989) (Sweet, J., concurring) (as-
serting that infringers have “infinite other words to choose
from” (quoting 1954 N.Y. Legis. Ann.
49)); W.T. Rogers Co. v. Keene, 778 F.2d 334, 339 (7th Cir.
1985) (noting that “useable” trademarks
are “for all practical purposes infinite”); William M. Landes &

Richard A. Posner, Trademark Law:
An Economic Perspective, 30 J.L. & ECON. 265, 274 (1987)
(“[W]ords that will serve as a suitable
trademark are as a practical matter infinite . . . .”).
10 Lettuce Entertain You Enters., Inc. v. Leila Sophia AR,
LLC, 703 F. Supp. 2d 777, 791 (N.D.
Ill. 2010).
11 Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d
947, 963 (7th Cir. 1992); see also
WSM, Inc. v. Tenn. Sales Co., 709 F.2d 1084, 1087 (6th Cir.
1983).
12 See, e.g., In re Coors Brewing Co., 343 F.3d 1340, 1346
(Fed. Cir. 2003) (“[I]n light of the very
large number of restaurants in this country . . . the potential
consequences of [assuming confusion
118 HARVARD LAW REVIEW FORUM [Vol. 131:116
cite than the many judges and scholars who have argued that
trademark
depletion and congestion are impossible. Beebe and Fromer’s
Article
will help move these discussions from anecdote to evidence.
They show
that existing registrations do in fact substantially constrain the
ability of
new competitors to use common words and short neologisms as
marks.
Their Article is teeming with striking statistics — for example,
of the
1000 most frequently used nouns or adjectives in American
English,
all 1000 were claimed within an active registration in 2014, and

the av-
erage word appeared within registrations by 745 distinct
registrants.13
Other noteworthy findings are that single-word marks cover
79% of all
word usage14 and 81% of all syllable usage,15 and that 55% of
the U.S.
population has a surname that has been claimed as a single-word
mark.16 And the real problem is likely significantly worse than
these
statistics indicate because their dataset does not include
unregistered
marks or account for the broadening scope that trademarks seem
to be
acquiring.17
This evidence suggests that the Second Circuit and other courts
quoted above are simply wrong: based on depletion and
congestion of
the most sought-after trademarks, the “monopolization of a
particular
term” does in fact deprive competitors of something that they
appear to
value. And inferring bad faith based on the choice of a similar
mark
makes less sense when one realizes that firms are focused on a
finite
subset of possible trademarks. The question is not: “Given the
infinite
supply of marks, what is the chance that defendant would have
chosen
this plaintiff’s mark?” Rather, courts should ask: “Given the
finite sup-
ply of marks that are perceived to be effective, the large number
of those
marks that are already being used in this category, and the

expected
search effort, what is the chance that defendant would have
chosen a
mark that is similar to some existing mark?”18
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
between a restaurant name and a food brand] would be to limit
dramatically the number of marks
that could be used by producers of foods and beverages.”).
13 Beebe & Fromer, supra note 1, at 1016 & fig.24.
14 Id. at 985.
15 Id. at 988.
16 Id. at 986.
17 On the expansion of trademark rights, see Mark A. Lemley
& Mark P. McKenna, Owning
Mark(et)s, 109 MICH. L. REV. 137 (2010).
18 Focusing on the probability of matching a particular mark
rather than matching some mark
in the relevant population is analogous to the error in the
criminal law context of finding a match
between DNA at a crime scene and DNA in a large database and
then focusing on the probability
of that particular match rather than the probability of matching
some DNA in the database. Cf.
Jonathan J. Koehler, Error and Exaggeration in the Presentation
of DNA Evidence at Trial, 34
JURIMETRICS J. 21, 33 (1993).
For example, consider the more than 5300 breweries in the
United

States.19 If we assume that each uses an average of 10 marks
and that
there are one million effective marks for beer, the probability
that a new
brewer who hasn’t done a thorough trademark search would
choose the
same trademark as an existing brewer — say, FIREMAN20 — is
not one
in a million (0.0001%); it is [1 − (1 − 1⁄1,000,000)10×5300] ≈
5%. If there are
only 100,000 effective marks, the probability jumps to 41%.21
Of course,
if the new brewer does thoroughly search existing marks, then
the like-
lihood of choosing an existing mark decreases — but at a
corresponding
increase in the costs of entry. If nothing else, Beebe and
Fromer’s Article
should give courts a much better understanding of the difficulty
of find-
ing an unused, simple mark, and the resulting constraints that
might
cause a firm to choose a mark that is similar to others already in
use.
II. COSTS OF TRADEMARK DEPLETION
AND CONGESTION
Beebe and Fromer’s primary contribution is descriptive, but
they
also argue that the costs of depletion and congestion are
significant
enough to require policy reforms such as higher fees or
congestion pric-
ing, and a more stringent use requirement coupled with more
rigorous

auditing of the trademark register.22 “[T]he ecology of the
trademark
system is breaking down,”23 they say, and there is no “excuse
for inac-
tion.”24 They emphasize the costs to both firms and consumers,
con-
tending that new entrants face higher costs of entry or
expansion and
must settle for less effective marks, and that consumers face
higher
search costs due to firms choosing less memorable marks and
due to the
blurred distinctiveness of individual words.25
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
19 Press Release, Brewers Ass’n, Steady Growth for Small and
Independent Brewers (Mar. 28,
2017), https://www.brewersassociation.org/press-releases/2016-
growth-small-independent-brewers
[https://perma.cc/X8Q7-MV9L].
20 See Jess Krochtengel, Texas Craft Brewer Blocks Calif.
Rival’s Use of ‘Fireman’ Mark,
LAW360 (Nov. 18, 2016, 7:34 PM),
https://www.law360.com/articles/864560/texas-craft-brewer-
blocks-calif-rival-s-use-of-fireman-mark
[https://perma.cc/E9VQ-9S33].
21 See Alastair Bland, Craft Brewers Are Running Out of
Names, and Into Legal Spats, NPR
(Jan. 5, 2015, 9:08 AM),
https://www.npr.org/sections/thesalt/2015/01/05/369445171/craf
t-brewers-
are-running-out-of-names-and-into-legal-spats
[https://perma.cc/X8FZ-AJRV] (noting that one
trademark lawyer “has never seen a brewery intentionally
infringe upon another’s trademarked

name” but that “with tens of thousands of brands in the
American beer market, it happens all the
time”).
23 Id. at 948.
24 Id. at 1041.
25 Id. at 1021–24, 1026–28. They also point to disturbing
examples of how cultural expression
has been harmed by trademark owners who prevent others from
using common words and expres-
sions even in nonconfusing ways, id. at 1025–26, though it is
unclear that depletion and congestion
make trademark bullying worse.
These hypothesized costs are both concerning and plausible.
But
there is not yet rigorous evidence that these mechanisms
actually create
a significant negative social welfare impact in practice. Further
empir-
ical research could help hone in on the actual costs of depletion
and
congestion, particularly given that market adaptations may
already be
mitigating what costs exist.
First, Beebe and Fromer’s argument lacks empirical support for
their assumption that depletion and consumption force entrants
to bear
significant financial burdens. Beebe and Fromer cite news
articles that

quote entrepreneurs who have trouble naming new firms or
products as
their primary evidence.26 But this evidence alone cannot show
how
trademark depletion actually affects the average costs of entry.
There
might be ways to at least approximate the financial costs: one
branding
guide estimates the low-end cost of name development and logo
creation
at $13,500.27 What remain untested are the different financial
costs that
may result depending on the particular trademark class, the size
of the
market entrant, and the depletion or congestion level of the
class.
Further empirical research would likely fill in these gaps in the
re-
search. For example, interviews with branding agents (or
branding
scholars) might clarify how much of these trademark-related
financial
costs to entry is driven by searching through existing marks,
whether
the cost is higher in more depleted classes, and how it has
changed over
time. Empirical research should also take into account the
possible ame-
liorating effect of technological changes, including the
increasing ease of
using search engines to quickly and cheaply test the
distinctiveness of
potential marks.28 In addition, technological developments
have re-
duced branding-related entry costs by making it easier to search

existing
registered marks29 or pay for low-cost searches,30 and by
allowing firms
to crowdsource logo design,31 connect online with low-cost
freelance de-
signers,32 or design their own logos.33
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
26 Id. at 948–49.
27 See BILL CHIARAVALLE & BARBARA FINDLAY
SCHENCK, BRANDING FOR DUMMIES
19 (2d ed. 2015).
28 See Lisa Larrimore Ouellette, The Google Shortcut to
Trademark Law, 102 CALIF. L. REV.
351, 399–400 (2014).
29 See CHIARAVALLE & SCHENCK, supra note 27, at 127–
28.
30 See Jen Udan, How to Trademark a Name Cheaply, CHRON,
http://smallbusiness.
chron.com/trademark-name-cheaply-60984.html
[https://perma.cc/M563-5EYW].
31 See, e.g., Anthony St. Clair, Top 4 Crowdsourced Logo
Design Sites for Small Businesses,
BPLANS, https://articles.bplans.com/top-4-crowdsourced-logo-
design-sites-for-small-businesses
[https://perma.cc/Q8CD-K8SV].
32 See, e.g., Hire the Best Logo Designers, UPWORK,
https://www.upwork.com/hire/logo-
designers [https://perma.cc/GJ5U-LT32].
33 See, e.g., Maggie Aland, Best Logo Design Software: Tailor
Brands vs Logo Garden vs
Withoomph, FITSMALLBUSINESS.COM (Dec. 26, 2016),
https://fitsmallbusiness.com/best-logo-
design-software [https://perma.cc/WHD5-JC7V].

Another way to empirically tackle the problem of measuring the
costs of depletion and congestion may be through comparisons
with
other countries.34 The United States is an outlier in requiring
trademark
use to maintain registration, so if depletion and congestion
“have
reached chronic levels”35 in the United States, trademark
systems in
other countries should presumably be on life support. If Beebe
and
Fromer are correct, one would thus expect trademark
development costs
to be a significant barrier to entry outside the United States.
There is a
vast literature on how variations in regulatory barriers affect
entrepre-
neurship across countries;36 investigating how trademarks
affect these
barriers seems like an important avenue for further research.
Empirical work is also needed to understand the other
hypothesized
cost to new entrants: that after bearing this “ever-greater cost”
to find a
usable mark, applicants are forced to settle for “ever-less
benefit.”37
Beebe and Fromer argue with some support from the branding
litera-
ture that the areas of greatest trademark depletion and
congestion —

common words and neologisms — are also those with the most
desirable
trademarks.38 But it does not necessarily follow that a firm’s
inability
to use a common word or short neologism, such that it is left
with a
more complex mark than it initially desired, will have a
significant im-
pact on the firm’s value. The branding literature on “good”39
trade-
marks that Beebe and Fromer discuss does little to answer this
question.
Whether more complex marks actually reduce firm value is
linked
to the corresponding concern for consumer welfare: do these
marks in
fact significantly increase search costs for consumers? This is a
cogent
hypothesis, as is the idea that congestion will harm consumers
by blur-
ring the distinctiveness of nonfamous marks. But given the
difficulty
scholars have had finding any concrete harm caused by blurring
of fa-
mous marks,40 it seems worth empirical study. Furthermore, to
deter-
mine whether reforms such as decluttering the register of
underused
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
34 International coordination may also be practically important
for implementing Beebe and
Fromer’s proposal for a heightened use requirement that applies
to foreign applicants as well as

U.S. applicants. See Crocker Nat’l Bank v. Can. Imperial Bank
of Commerce, 223 U.S.P.Q. 909,
927–28 (T.T.A.B. 1984) (holding that the Paris Convention for
the Protection of Industrial Property
requires that the Lanham Act be interpreted to allow foreign
nationals to register without demon-
strating use).
36 See, e.g., Leora Klapper et al., Entrepreneurship and Firm
Formation Across Countries, in
INTERNATIONAL DIFFERENCES IN ENTREPRENEURSHIP
129 (Josh Lerner & Antoinette
Schoar eds., 2010).
38 Id. at 964–70.
39 Id. at 969.
40 See Barton Beebe, Roy Germano, Christopher Jon Sprigman
& Joel Steckel, Is Trademark
Dilution a Unicorn? An Experimental Investigation (May 9,
2017) (unpublished manuscript),
marks will have any impact, it is necessary to determine how
much of
any consumer harm from depletion and congestion is caused by
these
inactive marks as opposed to a growing number of active
brands.
Unfortunately, the most concrete evidence of consumer harm
Beebe
and Fromer present seems insufficient to take as proof that the

current
trademark regime reduces consumer welfare. The Article
argues that
“trademark congestion can literally kill”41 because “between
eight and
twenty-five percent of medication errors are attributed to name
confu-
sion.”42 There is reason to doubt this statistic.43 But in any
case, the
pharmaceutical industry is not a good illustration of the harms
Beebe
and Fromer are focused on; as they note, it has low rates of
congestion
and depletion, and different branding practices.44 Given the
high non-
trademark-related barriers to entry, it seems unlikely that
reforms
related to trademark pricing or use requirements would have
much ef-
fect. Rather, any harms from drug-name confusion seem better
ad-
dressed by the computer systems that are already being used to
tackle
this concern.45
Another reason to exercise caution before implementing major
trade-
mark reforms is that markets may already mitigate at least some
of the
costs of depletion and congestion. For example, Beebe and
Fromer sug-
gest that “trademark law can more generally learn” from the
Food and
Drug Administration’s efforts in the pharmaceutical industry.46
Perhaps
one lesson from the pharmaceutical industry is that many harms

of con-
gestion and depletion can be addressed without any change in
trade-
–––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––
https://ssrn.com/abstract=2960082; see also Rebecca Tushnet,
Gone in Sixty Milliseconds: Trade-
mark Law and Cognitive Science, 86 TEX. L. REV. 507 (2008).
42 Id. at 1027–28.
43 Beebe and Fromer cite Amy Nordrum, Why Do Prescription
Drugs Have Such Weird Names?
Blame Branding Consultants and the FDA, INT’L BUS. TIMES
(June 24, 2015, 1:33 PM), http://
www.ibtimes.com/why-do-prescription-drugs-have-such-weird-
names-blame-branding-consultants-
fda-1981819 [https://perma.cc/ZG5T-T75S], which says that “8
to 25 percent of medication errors
were said to be caused by drugs sounding too much alike” based
on Ruth Filik et al., Drug
Name Confusion: Evaluating the Effectiveness of Capital (“Tall
Man”) Letters Using Eye Movement
Data, 59 SOC. SCI. & MED. 2597, 2597 (2004), which sources
the twenty-five percent figure from
James M. Hoffman & Susan M. Proulx, Medication Errors
Caused by Confusion of Drug Names,
26 DRUG SAFETY 445, 445 & 451 n.4 (2003), which bases this
number on unsubstantiated industry
sources such as Cynthia H. Starr, When Drug Names Spell
Trouble, DRUG TOPICS, May 15, 2000,
at 49 (quoting, for support of the twenty-five percent figure,
Susan M. Proulx, who is the president
of a for-profit organization focused on recognizing medical
errors).

45 See MEDICATION ERRORS 178–79 (Michael R. Cohen
ed., 2d ed. 2007). There are also
numerous patents focused on technological solutions to this
problem. See, e.g., Systems and Meth-
ods for Look-Alike Sound-Alike Medication Error Messaging,
U.S. Patent No. 7,716,068 (filed Jan.
9, 2003).
mark law itself. If consumers have trouble keeping track of the
explod-
ing number of craft beers,47 they can keep track of favorites
with the
Untappd app — including by scanning barcodes rather than
searching
by name.48 Consumers can scan barcodes or take pictures of
other prod-
ucts to see reviews and prices with shopping tools such as the
Amazon
app.49 The drawbacks of longer brand names also are less
significant if
consumers simply search for the desired product type using
websites like
Amazon or Google and then choose a product based on its
prominence
in the search results, giving them little reason to pay attention
to the
brand name.
The market for domain names may be instructive. As Beebe and
Fromer note, appealing domain names are limited.50 But they

also rec-
ognize that technological developments such as the availability
of inter-
net search tools and the creation of “new top-level domains”
have alle-
viated many of the problems associated with the limited supply
of the
most desirable domain names.51 Similarly, new technologies
may be
able to reduce the negative externalities of constraints on
attractive
trademarks: if consumers can find products with unusual
trademarks
through search engines, then firms can decrease attempts to find
the
most desirable trademarks because they know consumers have
alterna-
tive effective means to identify their goods.
In sum, there is not yet any concrete evidence that trademark
deple-
tion and congestion impose any significant harms for either
firms or
consumers. Without such evidence, reforming the trademark
system
seems premature and likely unresponsive to the actual
challenges firms
and consumers face. Of course, one response might be that
policy re-
forms are still warranted simply to counteract a plausible risk of
harm.
But that would only be true if there were no offsetting benefits
— some-
thing Beebe and Fromer never consider.
–––––––––––––––––––––––––––––––––––––––––––––––––––––

––––––––
47 See supra notes 19–21 and accompanying text.
48 See Billy Steele, Beer-Tracking App Untappd Gets Barcode
Scanning, Hails an Uber,
ENGADGET (Feb. 9, 2016),
https://www.engadget.com/2016/02/09/untappd-update-barcode-
scanning-uber [https://perma.cc/AJT9-BE5Q].
49 Amazon Mobile LLC, Amazon Shopping, GOOGLE PLAY,
https://play.google.com/store/
apps/details?id=com.amazon.mShop.android.shopping&hl=en
[https://perma.cc/TQ9Z-9FSZ] (list-
ing a feature that allows users to “[s]can product barcodes and
images to compare prices and check
availability using Scan It”); see also Chandra Steele, The Best
Shopping Apps to Compare Prices,
PC MAG. (Dec. 3, 2017, 8:20 PM),
https://www.pcmag.com/feature/290959/the-best-shopping-
apps-
to-compare-prices [https://perma.cc/6DYS-W6VB].
51 Id.
III. POTENTIAL BENEFITS
OF …
BBA 3210, Business Law 1

Course Learning Outcomes for Unit III
Upon completion of this unit, students should be able to:
5. Define the limitations of all forms of business ownership.
5.1 Define the limitations of business ownership and protecting
property.
6. Classify the different types of intellectual property.
6.1 Recognize how the topics of real, personal, and intellectual
property are related.
6.2 Identify the similarities and differences among the methods
for protecting intellectual
property.
Course/Unit
Learning Outcomes
Learning Activity
5.1
Unit Lesson
Chapter 8, pp. 158–175
Unit III Assignment
6.1
Unit Lesson
Unit III Assessment
6.2

Unit Lesson
Unit III Assessment
Unit III Assignment
Required Unit Resources
Chapter 8: Real, Personal, and Intellectual Property, pp. 158–
175
Unit Lesson
Introduction to Property
Most people can easily identify certain types of property. The
car you drive, the home you live in, the clothes
you own—these are all varieties of property. Real property, or
“realty,” is land and everything permanently
attached to it. Personal property consists of tangible, movable
objects. Intellectual property consists of those
intangible things that result from mental creativity, such as
composing music, writing a book, and making a
scientific invention, rather than making a physical effort.
Real Property
Owning realty includes more than the surface of the land. There
are three types of realty: airspace rights (at
the top), surface rights (under airspace rights but just under
Earth’s surface), and mineral rights (under
surface rights).

The significance of these three types is well illustrated in
“Special Report: U.S. Builders Hoard Mineral Rights
Under New Homes” (Conlin & Grow, 2013). This describes how
some homebuilders in the United States keep
the subsurface mineral rights for themselves, which is definitely
a situation where caveat emptor (Let the
buyer beware!) applies. This situation illustrates an important
aspect of property ownership—the bundle of
rights, which proposes that owning land is like owning a bundle
of sticks, and each stick represents an
UNIT III STUDY GUIDE
Real, Personal, and Intellectual Property
UNIT x STUDY GUIDE
Title
individual right. The report describes how some property
developers kept a stick for themselves and sold the
bundles without the mineral or subsurface rights to the
unwitting homebuyers (Conlin & Grow, 2013).
The textbook describes each of the various interests in land,
including fee simple absolute, conditional estate,
life estate, future interest, and leasehold estate (Kubasek,
Browne, Herron, Dhooge, & Barkacs, 2016). These
are possessory estates because they involve possessing the land

but not having an ownership interest in the
land. Nonpossessory estates are interests in land that do not
involve possession. Examples of this are
easements, profits, and licenses.
An example of an easement is within the following example.
Imagine the creation of a conservation easement
for purposes such as historic preservation, natural resource-
based outdoor recreation or education,
watershed preservation, and preservation of scenic open space.
The party granting this easement retains
ownership of the land but is allowing it to be used by others for
the stated purposes, without taking anything
from the land. In contrast, a profit allows the right to go onto
someone’s land and take part of the land or a
product of the land away. If easements and profits are properly
recorded, they are transferred with the land to
subsequent owners. Licenses, however, can provide the same
rights but are revocable and temporary in
nature.
Personal Property
Personal property specifically refers to tangible objects that can
be physically moved (e.g., a car).
Intellectual Property (IP)
One of the biggest challenges associated with the creation and
ownership of intellectual property (IP) is the
fact that it has the nature of other types of property. This is
often overlooked; however, IP is indeed property,
similar to realty and personal property, and it, too, carries a
bundle of rights, both for the creator of the
property and for the community. Article I, Section 8, Clause 8
of the United States Constitution grants

Congress the power, "To promote the progress of science and
useful arts, by securing for limited times to
authors and inventors the exclusive right to their respective
writings and discoveries" (U.S. Const. art. I, § 8).
From this constitutional provision, the legislative and judicial
system decides which rights to set aside for the
creators of IP and which will be left for the public. Possible IP
creator rights include copyright, patent,
trademark, and trade secret.
Under the common law of copyright, a potential user (i.e.,
infringer) may be prevented from reproducing a
copyrighted work. To learn more about the costs, learn more
about the process, and to review the forms
involved, visit the United States Copyright Office
Lincoln promoted the patent system and believed it to be
powerful (Lau & Johnson, 2014).
Thomas Edison, the famed inventor, is responsible for three key
innovations in the United States: the
phonograph, the incandescent light bulb, and a moving picture
camera. He filed over 1,000 patents in his
lifetime (“Thomas Edison’s Patent,” n.d.). The patent
application process is very unique in that the applicant is
required to literally provide a blueprint for his or her invention.
A U.S. patent grants to the applicant 20 years
from the date of application the right to exclusively produce,
sell, and use the object. After the exclusivity
period lapses, the patent expires, and anyone can produce, sell,
and use the object. The blueprint provided in
the application is an exchange that bestows the exclusive right
to the applicant but also can help others
reproduce the invention once the patent lapses. Many consider
the patent to be the most protective of all the
forms of IP; however, it is also the shortest-lived.

A trademark connects a product or service with a specific
producer. Trademarks are powerful business tools
in that they are designed to resonate with a consumer in a way
that will perpetuate business (i.e., support the
brand identity). How do trademarks do that? Consider your last
supermarket visit. While strolling down the
laundry detergent aisle, you see dozens of brands in colorful,
uniquely shaped containers. You prefer Tide
laundry detergent and know that it is the orange bottle with the
blue cap. Instantly, you see it and know that is
the detergent you want to purchase because you recognize the
product among all of the others. This is the
power of the trademark. In this example, color, shape, and logo
design are all factors. Can a sound be
trademarked?
http://copyright.gov/forms/
UNIT x STUDY GUIDE
Title
There is a multitude of rules that regulate the use of trademarks.
The owner of a trade secret is required to take all reasonable
precautions to prevent that secret from being
discovered by others. The formula for Coca-Cola is an excellent
example of a trade secret. Coca-Cola

employees work in different and divided groups so that the
formula remains a secret (Quinn, 2012).
References
Conlin, M., & Grow, B. (2013, October 9). Special report: U.S.
builders hoard mineral rights under new
homes. Retrieved from http://www.reuters.com/article/us-usa-
fracking-rights-specialreport-
idUSBRE9980AZ20131009
Kubasek, N., Browne, M. N., Herron, D. J., Dhooge, L. J., &
Barkacs, L. (2016). Dynamic business law: The
essentials (4th ed.). New York, NY: McGraw-Hill Education.
Lau, T., & Johnson, L. (2014). The legal and ethical
environment of business (2nd ed.). Washington, DC: Flat
World Knowledge.
Quinn, G. (2012, January 6). Vault with Coca-Cola trade secret
formula on public display. Retrieved from
http://www.ipwatchdog.com/2012/01/06/vault-with-coca-cola-
trade-secret-formula-on-public-
display/id=21588/
Thomas Edison's patent application for the light bulb (1880).
(n.d.). Retrieved from

http://www.ourdocuments.gov/doc.php?flash=true&doc=46
U.S. Const. art. I, § 3
Suggested Unit Resources
In order to access the following resource, click the link below.
The suggested reading below is provided to supplement key
concepts in the Unit III Lesson.
U.S. Copyright Office. (n.d.). Forms. Retrieved from
Fall/Winter, 2 0 1 3 BCJ 19
Society for Case Research
THE FRffiD PICKLE EIGHT
S. Catherine Anderson, Queens University of Charlotte
Miranda Reynolds, Innovasource and McCoU School MBA
Christian C. Melvin, Student MBA Program McColl School
MBA
Amanda LaNeith Cash, McColl School MBA Program
77iii case was prepared by the authors and is intended to be

used as a basis for class discussion. The views
presented here are those of the authors based on their
professional judgment and do not necessarily reflect the
views of the Society for Case Research. Copyright © 2013 by
the Society for Case Research and the authors. No
part of this work may be reproduced or used in any form or by
any means without the written permission of the
Society for Case Research.
October 24, 2010 marked a culinary crossroads for Charlotte,
North Carolina. Penguingate, as it
had been dubbed on Twitter, was coming to an end and regulars
of the Penguin Drive-In
restaurant gathered to say farewell to what they knew as their
local hang-out. The next day, the
doors would be closed and a new chapter would begin for the
historic restaurant as well as its
proprietors.
How, though, did a property that started out as an ice cream
shop become the center of a media
firestorm and lead to the splintering of fiiendships,
partnerships, and a local community?
It AU Started With an Ice Cream Shop
In 1954, Jim Ballentine bought an ice cream shop that had been
known as the Penguin since the
late forties. He bought the Penguin building, lot, and existing
equipment and embarked on a
dream that he had shared with his wife on their first date - to
own a restaurant (Markovich,
2011).
Jim and his wife, Jean, took the ice cream shop and tumed it
into a classic drive-in, complete

with traditional diner fare and a beer selection. The Penguin
grew and so did the Ballentine
family with the addition of five daughters. Popularity of the
Penguin forced Jean to quit her job
as a nurse to become a full-time partner with Jim. As the
restaurant became a home away from
home, it was only natural for the daughters to be involved with
the family business.
The Penguin never had to advertise; word-of-mouth about the
drive-in spread all over Charlotte.
Patrons kept coming back to the restaurant for the food and
cheap beer. Ballentine opened the
Fall/Winter, 2013 BCJ 2 0
Penguin seven days a week, 365 days a year. H e told his
family, "There are people depending on
m e to be t h e r e " (Suchetka, 1995).
In 1999, Jim Ballentine fell ill and retired, leaving ownership in
the n a m e of his wife, Jean. With
n o one t o continue running the restaurant, the Ballentine
family k n e w it w a s t i m e to close t h e
Penguin.
Then C a m e the Fried Pickles
A r o u n d the same t i m e the Penguin closed, t w o locals,
Brian R o w e and Jimmy King, had b e e n
playing w i t h the idea of opening a bar. Friends encouraged t h
e m to approach the Ballentine
family about reopening the Penguin. R o w e and K i n g signed
a five-year lease agreement for the

property and use of the Penguin n a m e with Jean Ballentine in
2000. The lease and n a m e w a s
renewable for a second five-year term. Their promise t o Jean w
a s t o maintain the spirit of the
Penguin that the family had worked so hard to establish ( W S O
C T V . c o m , 2010).
K i n g and R o w e set out t o fulfill their dream of opening the
Penguin as a bar. However, due t o
North Carolina laws, the business also h a d t o serve food in
order to obtain a liquor license. So
R o w e invited the caterer from his w e d d i n g , Greg Auten,
to develop the m e n u and m a n a g e the
kitchen.
K i n g and R o w e invested their o w n resources t o revive the
Penguin by renovating the building,
fixing the gaping hole over in the roof over the toilet, buying n
e w kitchen equipment, and adding
a j u k e b o x and red checkerboard floors. K i n g also re-
vamped the logo to create a sleeker, m o r e
m o d e m penguin logo. In an interview. K i n g said, " W e w a
n t e d to m a k e it authentic. W e d i d n ' t
want t o m a k e it like Happy Days. W e d i d n ' t want the
Marilyn Monroe and the Elvis Presley
vibe. ' C a u s e in the fifties they w e r e current" (Markovich,
2011). Their focus w a s o n their o w n
current tastes in music and food and camaraderie. Their updated
version of t h e P e n g u i n
reopened in M a y 2 0 0 1 .
K i n g w a s the daytime front office guy while R o w e , a
former Marine, covered the night shift.
A u t e n developed a unique m e n u that w o u l d p r o v e to b
e a key t o the P e n g u i n ' s fiiture popularity.
All three sported heavy tattoos and a biker-bar swagger that

helped t o create the business they
wanted: "a dive bar that w a s n ' t threatening," a cool, safe
place for p e o p l e to h a n g out w i t h the
tattooed wait staff (Markovich, 2011).
It took three years of working seven days a w e e k , but the
Penguin began to see lines stretching
into the parking lot on a daily basis as socialites, businessmen,
students, and bikers all converged
on the place n o w nicknamed " T h e Bird." It w a s k n o w n
for its food, fiiendly welcoming staff,
and laid-back attitude. Lisa Ballentine, one of Jim Ballentine's
five daughters, said, " T h e y
[Auten, K i n g , and R o w e ] breathed n e w life into the P e n
g u i n " (Schwab, 2010).
C u s t o m e r s ' favorites included grilled pimento cheese
sandwiches, the H e m i and Small Block
burgers (names drawing o n t h e popularity of stock car racing
in Charlotte), and black b e a n
h u m m u s . B y far, the m o s t popular m e n u item w a s the
fried pickles. Auten estimated that 9 0 % of
the orders w e r e accompanied by a basket of fried pickles
(Suchman, 2007).
Fall/Winter, 2 0 1 3 BCJ 2 1
"The Bird" Goes Nuts
On January 11, 2007, the Penguin family lost its patriarch when
Jim Ballentine passed away
(Obituaries, 2007). His wife, Jean, became owner of all their
assets, including the Penguin
property. In Jim Ballentine's obituary, Auten, King, and Rowe

were listed as "extended family."
Meanwhile, his beloved Penguin was about to step into the
spotlight.
Brian Rowe said, "The first year it was slow, the second year it
was slow. Around the fourth
year, things started to pick up and the sixth and seventh year we
were very busy. Then that Food
Network thing aired and we went nuts" (Hodges, 2010).
In March 2007, Guy Fieri, star of the Food Network's Diners,
Drive-ins, and Dives, fihned a
segment at the Penguin. Auten, King, and Rowe were all
featured in the segment, though most of
the attention was on Auten's menu creations.
On May 7, the same day the Penguin made its national
television debut, Ballentine Family
Investments, LLC was formed. Ownership of the Penguin was
transferred from Jean Ballentine
to the limited liability company, which would later be managed
by Lisa Ballentine, one of Jim
and Jean's daughters.
After the segment aired on May 7, the Penguin was no longer
Charlotte's hidden gem. We "took
the spot from relative obscurity to a thriving hotspot," King said
(King, 2010). Now, not only
were patrons lining up outside the door, so were investors who
were looking to capitalize on the
Penguin's success. Franchising seemed like an obvious next
step.
Penguin Proprietorship?
The trio initially declined franchising offers, contending that

the secret of the Penguin was the
mix of food, environment, and people, which could not be
replicated. That sentiment changed
after the premiere on Diners, Drive-ins, and Dives.
Martin Sprock, the successful franchisor of restaurants such as
Flying Biscuit and Moe's
Southwest Grill and CEO of Atlanta-based Raving Brands,
approached Auten, King, and Rowe
with a $750,000 offer to franchise the Penguin. Negotiations
between Sprock and the three
Penguin partners lasted about six months, but a deal was never
signed. Sprock said, "I didn't try
to buy this particular little restaurant right here. I was buying
the name and the marks and the
rights to expand the Penguin, all over into fifty states if
possible" (Markovich, 2011).
In 2008, to protect the Penguin brand from knock-offs. King and
Rowe worked with Jean
Ballentine to trademark the Penguin logo and name. When the
trademark was filed. King and
Rowe's names were absent from the registration, even though
King had redesigned the logo that
graced bumper stickers and t-shirts advertising the restaurant
and bar. The trademarks for the
Penguin logo and name were filed, respectively, on July 29 and
30,2008. (See Figures 1 and 2.)
Rowe recalls Jean Ballentine saying, "... as long as you're
running the Penguin, you can use the
name" (Markovich, 2011). Documents exist that prove this, but
they are not part of the public
record.

Rowe felt the relationship he had with the Ballentine family was
simple: the family owned the
building and the name; the three partners [Auten, King, and
Rowe] were tenants and owned the
actual business model that occupied the building.
Intellectual Property
Franchisors [sellers] are entrepreneurs who have an established
business they are looking to
expand by licensing their brand including, but not limited to,
trademarks and trade dress.
Trademarks are a form of intellectual property and include
trademarks (for products) or service
marks (for services such as restaurants). These can be words
(e.g., McDonald's, representing a
hamburger restaurant) or symbols (e.g., the golden arches or the
Nike "swoosh").
Trade dress is a type of trademark that is not easily defined and
is a continually evolving form of
intellectual property. Trade dress is best described as the
elements used to identify or promote a
product or service. Trade dress protection covers all senso.y
impressions that consumers
associate with a brand or business. These elements can include
décor, uniforms, layout, wait
staff, and menus. A famous example of trade dress protection
would be the Hard Rock Café
brand (Stim, 2010).
Trademarks are an important business asset, especially when
attracting franchises. Trademarks,
including logos and trade dress, communicate the brand to all

the stakeholders associated with
that franchise. Registration of trademarks is a way for
franchisors to protect their brand;
franchisees are buying the right to use an established brand.
Other forms of intellectual property that may be valuable to a
franchisor or important for a
business to protect are copyright (for original written or visual
created works), patent (for novel,
non-obvious inventions), and trade secrets (a secret which the
owner zealously protects, such as
the formula for Coca-Cola). The Penguin's owners had not
explored whether Auten's recipes
could or should be protected under one or more ofthese options.
Ruffled Feathers
The ten-year anniversary of the Auten, King, and Rowe era of
the Penguin occurred in 2010.
Early that year, Auten left the Penguin to start his own
restaurant, Pinky's, on the west side of
town because he "wanted more of his own thing" (Schwab,
2010). In May, King and Rowe
signed a lease to own and operate another landmark Charlotte
restaurant, the Diamond, in a joint
venture with fellow restaurateur, Andy Kastanas. King and
Rowe "thought it would be cool to
run two historic restaurants not just in the same neighborhood,
but on the same block"
(Markovich, 2011). The new venture was intended to
complement the existing setup at the
Penguin.
After King and Rowe signed the lease on the Diamond, Lisa
Ballentine approached the two
about ownership in the Penguin. She wanted to keep 5 1 %

ownership in the Penguin, with the
remaining 4 9 % to be split between King and Rowe. She was
sincere about her partnership offer,
but she also had concems about "napkins . . . flying out the back
door 'cause the Diamond's out
of napkins" (Markovich, 2011).
King and Rowe declined the offer. They felt the Ballentine
family only owned the building,
name, and logo, not the business. The business belonged to
King and Rowe, and they were not
going to sell out their business for minority ownership,
especially when they rebuilt the Penguin
from the rotting building they leased in 2000. The ownership
negotiations ceased. Lisa
Ballentine reflected, "Yeah, the lease was coming to an end, but
you were going out with another
girl anyway . . . We're all doing what's best for the Penguin"
(Schwab, 2010).
In July 2010, the Ballentine family approached Martin Sprock
about franchising the Penguin.
Little is known about the content of the discussion, but in
September 2010, Martin Sprock's
representative announced that Ballentine Family Investments
would not be renewing the lease
with King and Rowe and that the Penguin would be under new
management. King and Rowe's
lease on the Penguin would end November 1, 2010. The
announcement said, "The Ballentine
family has decided to give their restaurant a new lease on life
while staying true to the dreams

their family has always kept for the Penguin" (Hodges, 2010).
King and Rowe also issued their own press release affirming
their stance on ownership, stating
"The Penguin Drive-In [would] cease to operate under the
current ownership effective October
2 4 " (see figure 3). Although King and Rowe threatened legal
action against Ballentine Family
Investments, no official paperwork was filed.
#Penguingate
With the announcement about the Penguin's new management
and potential franchising,
websites, Facebook, and Twitter lit up with Charlotteans'
reactions. #Penguingate became a
trending topic as Charlotte's active social media community
voiced its outrage and
disappointment with the announced changes.
Mark Cline, a supporter of the Penguin under King's and Rowe's
management, started an event
page titled Boycott the Penguin as of Oct. 24. Cline wrote that
he "started this event to show
support for Brian and Jimmy, that's it." Cline only sent the
event invitation to about 50 Facebook
friends and by the next day, he had received 300 confirmations.
The event page eventually grew
to include over 15,000 people planning to boycott the Penguin
as of October 24. Cline went on to
comment, "I, in no way, intended this to be aimed at current,
past, or future owners in a negative
w a y " (Boycott the Penguin, 2010).
A comment written in response to the boycott on The Charlotte
Observer blog said, "I w o n ' t eat

in that building after October 24, and I won't respect anybody
that does. I won't eat in a Penguin
franchise. I won't eat in a restaurant owned by anybody
involved in the travesty of a ' n e w '
Penguin. I will boycott" (Opinion, 2010).
News of the boycott spread beyond the Charlotte city limits.
Andrew Mark Veety, resident of St.
Louis, Missouri, wrote on his blog, "I think it's time to retire
my Penguin tee-shirt after wearing
it with pride around St. Louis for ahnost three years. It's a sad
day for Charlotte.. .Fight the good
fight—boycott the New Penguin Drive-in!" (Veety, 2010).
Charlotte Magazine summed up the situation: "Rowe was
stunned by the online push to boycott
the New Penguin. Lisa [was] bewildered by the new reality of
social media, where sarcastic
insults and conspiracy theories can become fact when they're
repeated and re-tweeted often
enough" (Markovich, 2011).
It's Not All Black and White
As the last embers of the social media firestorm bumed out, it
left the city t o m between two
restaurants, the Penguin and the Diamond. There was no clear
victor. "No one wins a fight over
sliced dills and seasoned fiour," said restaurant critic Helen
Schwab. "The genius of the Penguin,
the reason for the passion and the poison, is that folks come to
feel it's their own, to hold it dear

and not to take it for granted" (Schwab, 2010).
References
Best N e w Restaurant (Opened in Last 12 Months): The
Diamond Restaurant. (2011, August 16).
Creative Loafing. Retrieved from http://clclt.com/charlotte/best-
new-restaurant-opened-
in-last-12-months/BestOf?oid=2441187
Boycott the Penguin as of Oct. 24. [ca. 2010]. In Facebook
[Event page]. Retrieved
August 13, 2011, from
www.facebook.com/event.php?eid=149194901785607
Hodges, C. (2010, September 27). The Penguin Drive-In
changes ownership. [Web log
comment]. Retrieved from
http://blogs.creativeloafing.com/Uieclog/2010/09/27/the-
penguin-drive-in-changes-ownership/
Intemational Franchise Association. (2011). Retrieved from
www.franchise.org
King, J. (2010, September 20). Penguin Drive-in changes
ownership [Press release]. Retrieved
from http://uptownclt.com/2010/09/the-saga-at-the-penguin-
continues/
Markovich, J. (2011, March 29). Frayed Pride and Fried Pickles.
Charlotte Magazine. Retrieved
from http://charlottemagazine.com/Charlotte-Magazine/April-
2011/Fraved-Pride-and-
Friend-Pickles/

Melvin, S. P. (2011). The Legal Environment of Business: A
Managerial Approach. New York,
NY: McGraw-Hül Irwin.
Obituaries in the news. (2007, January 12). The Charlotte
Observer. Retrieved from
http://www.legacv.com/obituaries/charlotte/obituarv.aspx?n=ia
mes-william-
ballentine&pid=85940149
Opinion: Losing a unique 'Penguin' hurts the hearts of its fans.
(2010, October 6). The Charlotte
www.charlotteobserver.com/2010/10/06/1741504/losing-a-
unique-penguin-hurts.html
Schwab, H. (2010, September 21). "Everybody's cool": Penguin
update. [Web log comment].
Retrieved from
http://helendining.blogspot.com/2010/09/penguin-update.html
Schwab, H. (2010, October 3). Why we care about the Penguin's
fate. The Charlotte Observer.
Retrieved from
http://www.charlotteobserver.com/2010/10/04/1737743/the-
polarizingplight-of-the-penguin.html
Spanberg, E. (2011, April 22). Growth on Martin Sprock's
Menu. The Charlotte Business
Joumal. Retrieved from
http://www.bizioumals.com/charlotte/print-
edition/2011/04/22/growth-on-sprocks-menu.html

Stim, R (2010). Patent, Copyright, and Trademark: An
Intellectual Property Desk Reference.
Berkeley, CA: NOLO.
Suchetka, D. (1995, December 23). Camaraderies on Tap at the
Penguin. The Charlotte
http://ttomlinson.blogspot.com/2010/09/penguin-version-
10.html
Suchman, P. (Producer). (2007, May 7). Diners, Drive-Ins, and
Dives [Television broadcast].
New York, NY; Scripts Networks Interactive.
Veety, A. M. (2010, September 23). Penguin Drive-In—Say It
Ain't So. [Web log comment].
Retrieved from www.andrewmarkveetv.com/2010/09/penguin-
drive-in-sav-it-aint-
so.html
WSOCTV.com. (2010, September 21). The Penguin Drive-In to
Change Management, Concept.
Retrieved from
http://www.wsoctv.com/news/25097714/detail.html
Website References:
United States Copyright Office, http://www.copvright. gov.
United States Patent and Trademark Office,
http://www.uspto.gov.
Fall/Winter, 2013 BCJ 26
Tahle 1

Timeline of the Penguin Drive-In
Year
1942
1954
1999
2000
2001
2007
2008
2010
Major Developments
• The Penguin was originally built to serve as a roadside soda
and ice cream shop.
• Jim Ballentine bought the Penguin building, lot, and
equipment inside.
• Jim retired and transferred ownership of the Penguin to his
wife Jean Ballentine.
• The Penguin closed its doors. The building was put up for
rent.
• Jimmy King and Brian Rowe signed the lease on the building
and the Penguin

name.
• The Penguin re-opened as a bar and restaurant.
• January 11 : Jim Ballentine died.
• March: The Food Network filmed a segment at the Penguin.
• May 7: The segment aired on the Food Network.
• May 7: The Ballentine family formed Ballentine Family
Investments, LLC.
• May 8: Jean Ballentine transferred ownership of the Penguin
to Ballentine Family
Investments, LLC.
• Franchisor Martin Sprock approached Auten, King, & Rowe
about franchising
the Penguin.
• July 29: Jean Ballentine filed trademark for the Penguin name.
• July 30: Jean Ballentine filed trademark for the Penguin logo.
• January: Greg Auten left the Penguin to open Pinky's.
• May 7: King & Rowe and Andy Kastanas signed a joint
venture to run the
Diamond.
• September 20: Ballentine Family Investments, LLC and Jimmy
King issued press
release announcing decision not to renew lease with King &
Rowe.
• October 24: Rowe & King's last night operating the Penguin.
Table 2

"The Bird" Bios
(Listed in order of introduction in the case)
Jim Ballentine: Owned and operated the Penguin with his family
from 1954 until his retirement
in 1999. He died January 11, 2007.
Jean Ballentine: Wife of Jim Ballentine. After Jim retired in
1999, Jean became owner of the
Penguin until 2007 when she transferred ownership of the
Penguin to Ballentine Family
Investaents, LLC. Both of the trademarks for the Penguin name
and logo were registered under
Jean's individual name.
Jimmy King: Air Force veteran and Rowe's partner; they leased
the Penguin from Jean
Ballentine in 2000. King redesigned the Penguin logo and was
more of the front office guy until
October 24,2010.
Brian Rowe: Former Marine and King's partner; they leased the
Penguin from Jean Ballentine
in 2000. Rowe helped to manage and operate the Penguin from
2001 until October 24,2010.
Greg Auten: Became chef at the Penguin in 2001 and created
many of the menu items that made
the Penguin famous, most notably the fried pickles. He left the
Penguin in 2010 to start his own
restaurant, Pinky's.
Guy Fieri: Celebrity chef and host of the Food Network's
Diners, Drive-ins, and Dives.

Lisa Ballentine: Daughter of Jim and Jean Ballentine. Lisa is
credited with making the decision
not to renew the lease with King and Rowe in 2010. Lisa took
over management of the Penguin
on November 1,2010.
Martin Sprock: Successñil franchisor of brands such as M œ ' s
Southwest Grill and the Flying
Biscuit. Sprock's franchising company. Big Game Brands,
finalized franchising agreements with
Ballentine Family Investaents in November 2010 (Spanberg,
2011).
Andy Kastanas: Charlotte restaurateur who entered into a joint
venture with King and Rowe to
operate the Diamond, another landmark restaurant around the
comer from the Penguin.
Figure 1.
Trademark Registration for Penguin Drive-In Name
Int CL: 43
Prior U.S. CIS.: 100 and 101 ^ , ^„^ , „ ,
Reg. No. 3,586,482
U n i t e d S t a t e s P a t e n t and T r a d e m a r k O f f i c e
Registered Mar. IQ. 2009
SERVICE MARK
PRINCIPAL REGISTER

PENGUIN DRIVE-IN
BALLENTINE. JEAN A. (UNITED STATES INDI-
VIDUAL)
1921 COMMONWEALTH AVENUE
CHARLOTTE, NC Î820S
FOR: RESTAURANT, TAKE-OUT, CATERING
SERVICES, BAR ,A.ND COCKX^UL LOUNGE SERVI-
CES, IN CLASS 43 (U,S. CLS. 100 AND 101).
HtRST USE 12-31-1954; IN COMMERCE 12-31-1954.
THE MARK CONSISTS OF STANDARD CHAR-
ACTERS WITHOUT CLAIM TO ANY PARTICULAR
FONT, STXE, SIZE, OR COLOR.
NO CLAIM IS MADE TO THE EXCLUSIVE
RIGHT TO USE "DRI'E-IN"', APART FROM THE
Ni-VRK AS SHOWN.
SER. NO. 77-533,979, FILED 7-29-ä»8.
DORITT L. CARROLL, EXAMINING ATTORNEY
Figure 2.
Trademark Registration of Penguin Drive-In Logo
Int. a , : 43

Prior U.S. a s . : 100 and 101
Reg. No. 3,586,500
United S t a t e s Patent and T r a d e m a r k Office R îaered
Mar, lo. 2009
SERVICE MARK
PRINCIPAL REGISTER
BALLENTTNE. JEAN A, (UNITED STATES INDI-
CHARLOTTE. NC 2S208
NO CLAIM IS MADE TO THE EXCLUSIVE
^ ° " T ™ USE "FOOD", "DRINKS". OR "DRIVE-
IN«. APART FROM THE MARK AS SHOWTi.
FOR: RESTAURANT, TAKE-OUT, CATERING
SERVICES, BAR AND COCKTAIL LOUNGE SERXI-
CES. IN CLASS 43 (U.S. CLS. 100 AND 101).
SER. NO. 77-534^78, HDLED 7-30-2008.
HRST USE 12-31-aX)0; IN COMMERCE 12-31-3)00. DORITT
L. CARROLL, EXAMINING ATtORNEY
Figure 3.
Press Release Announcing Management Change at Penguin
Press Release
Contact: Jimmy King

Phone: (704) 491-8012
FOR IMMEDIATE RELEASE
September 20,2010
Penguin Drive-in changes ownership
Charlotte, NC, September 20, 2010: The Penguin Drive-In is
changing ownership after 10 years
of business in the Plaza Midwood neighborhood. The popular
restaurant was leased to current
partners Jimmy King and Brian Rowe in 2000, who took the
spot from relative obscurity to a
thriving hotspot known for their handmade burgers and fried
pickles. The Penguin has won
numerous awards and received national recognition, including a
feature on the Food Network's
series Diners, Drive-ins and Dives. The building's original
owners, the Ballentine family, will
not renew the current lease and will retain ownership in the
building and the Penguin Drive-In
name.
Partners King and Rowe have announced plans to provide many
signature items in their new
venture. The Diamond Restaurant. The Diamond is a joint
venture that includes Andy Kastanas
of Soul Gastrolounge. Located at 1901 Commonwealth, The
Diamond is currently undergoing
extensive renovations with plans to open as a 24-hour diner in
late October.
Partner Jimmy King states, "We wish the Ballentine family the
best in their endeavors and thank
all of our patrons for 10 years of incredible loyalty. We remain
firmly committed to this

neighborhood. Regardless of The Penguin's fixture, we will
remain in Plaza Midwood and
continue to provide the quality of food and service that we have
since re-opening The Penguin in
2000."
The Penguin Drive-In will cease to operate under the current
ownership effective October 24.
Copyright of Business Case Journal is the property of Society
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permission. However, users may print, download, or email
articles for individual use.
Revisiting incremental product innovations
in the food‑manufacturing industry:
an empirical study on the effect of intellectual
property rights
Tohru Yoshioka‑Kobayashi1, Tomofumi Miyanoshita2 and
Daisuke Kanama3*
1 Introduction
It has long been a big argument as to what types of innovations
contribute to the
enhancement of the competitiveness of firms. According to
Prajogo (2016), product
innovations are effective in the changing environment but are

ineffective in the com-
petitive market. Rather, process innovations show superiority in
a fiercely competitive
industry. Another perspective of innovation research
emphasizes technological innova-
tion as one of the most inimitable innovations (Xin et al. 2010).
Indeed, many product
innovations, including new products and new features of
products (such as designs or
promotions), are targets of imitations (Bigliardi and Galati
2013), while the majority of
process innovations are hardly imitated due to secrecy of the
manufacturing processes
Abstract
The highly competitive and mature food industry has long been
process innovation‑
oriented while largely neglecting product/technological
innovation. However, recent
innovation debates have raised two issues. First, imitations of
product innovations
likely underestimate the value of innovation in this industry;
second, exaggerations of
new product development neglect incremental product
innovations, which facilitate
branding. Using intellectual property rights data as indicators of
exclusive innovation
outcomes, this study empirically examined these issues. The
distinction of consumer
communication channel‑related designs from other industrial
designs utilizing the
advantage of the simple structure of foods has realized highly
fitted proxies of distinc‑
tive innovation activities. Investigating the firm performance of
192 Japanese food
manufactures between 2009 and 2013 revealed the dominance of

incremental innova‑
tions in product packaging over other exclusive innovations.
This study provides practi‑
cal insights regarding innovations for the industry and evidence
of the effectiveness of
consumer communication‑related designs of patents, especially
as novel innovation
proxies.
Keywords: Incremental product innovation, Food manufacturing
industry, Intellectual
property right, Innovations in the static industry
Open Access
© The Author(s) 2020. This article is licensed under a Creative
Commons Attribution 4.0 International License, which permits
use, sharing,
adaptation, distribution and reproduction in any medium or
format, as long as you give appropriate credit to the original
author(s) and
the source, provide a link to the Creative Commons licence, and
indicate if changes were made. The images or other third party
material
in this article are included in the article’s Creative Commons
licence, unless indicated otherwise in a credit line to the
material. If material
is not included in the article’s Creative Commons licence and
your intended use is not permitted by statutory regulation or
exceeds the
permitted use, you will need to obtain permission directly from
the copyright holder. To view a copy of this licence, visit
http://creat iveco
mmons .org/licen ses/by/4.0/.
R E S E A R C H

Yoshioka‑Kobayashi et al.
Economic Structures (2020) 9:34
https://doi.org/10.1186/s40008‑020‑00213‑5
*Correspondence:
[email protected]‑u.ac.jp
3 School of Economics, Kanazawa
University, Kakuma‑machi,
Kanazawa, Japan
Full list of author information
is available at the end of the
article
http://orcid.org/0000-0001-9738-5434
http://creativecommons.org/licenses/by/4.0/
http://creativecommons.org/licenses/by/4.0/
http://crossmark.crossref.org/dialog/?doi=10.1186/s40008-020-
00213-5&domain=pdf
Page 2 of 19Yoshioka‑Kobayashi et al. Economic Structures
(2020) 9:34
or its dependence on social network-based supply chains. In
particular, in a competi-
tive and matured market, innovative firms encounter many
copycats. As mentioned
below, past literature except a few reports has not investigated
the economic impact of
incremental product innovations (IPIs) in the food-
manufacturing industry or even its
potential. As a fiercely competitive industry, imitations may
hinder effective analysis.
This study attempts to overcome this limitation by focusing on
three different intellec-

tual properties rights (IPRs) as proxies of different types of
hard-to-imitate innovations.
Prior scholarly works validated these proxies by examining
their correlations with vari-
ous firm performance indicators. Following these works, this
study tests the impact of
different types of innovation on firm financial performance.
Innovation trends in the food-manufacturing industry, one of the
most competitive
and matured businesses, clearly recollect this theoretical
question. Previous studies have
noted that firms in the food-manufacturing industry do not
substantially facilitate prod-
uct and technological innovation activities, compared with other
manufacturing indus-
tries (Beckeman and Skjöldebrand 2007; Christensen et al.
1996; Hullova et al. 2019).
This is evidenced by the low ratio of research and development
(R&D) intensity to sales
(Beckeman and Skjöldebrand 2007; Garcia Martinez and Briz
2000; Trott and Simms
2017) and by small amount of patent applications (Christensen
et al. 1996; Dernis et al.
2015; Garcia Martinez and Briz 2000). Rather, this industry has
been process innova-
tion-oriented (Archibugi et al. 1991; Batterink et al. 2006;
Triguero et al. 2013). Reality
indicates that product innovations are endogenously inferior to
process innovations in
the food manufacturing industry.
Still, we need further validation for judging the values of
product innovations in this
industry. Product innovations contain multiple aspects other
than new product develop-

ment. In particular, this study focuses IPI, which implements
small changes in a prod-
uct’s characteristics, design, quality, functions, or components
to satisfy the needs of the
consumers (Bhaskaran 2006). In fact, some empirical studies
have referred to such inno-
vation as a marketing innovation and revealed the positive
effects of narrowly defined
product innovations and innovation performance of firms
(Gunday et al. 2011). How-
ever, without any exclusivity, IPIs will soon lose
competitiveness. Therefore, firms have
tried to protect their products by registering IPRs preventing
counterfeits (Japan Patent
Office, 2011, 2017). For example, as Silayoi and Speece (2007)
note, packaging affects
consumers’ product selection and willingness to pay; once a
package with a new design
is recognized by consumers, it is expected that continuously
utilizing it will gradually
lead to sales and profits. Naturally, firms will thus continue to
protect the design patent,
expecting the long-term preservation of design patents reflects
building the brand and
preventing competitor’s imitation.
On the other hand, if the number of IPRs is too high, it will be
difficult to main-
tain consistency with the product development strategy inside
the firm. Fleming and
Sorenson (2001) proved using patent data that as the number of
element technologies
increases, the possibility of interaction between technologies
and products will increase,
and as a result, it becomes difficult to combine them. This is
reflected as a firm’s mar-

ginal costs. Furthermore, from the viewpoint of IP management,
the maintenance of
IPRs and monitoring for counterfeit goods in the market are the
primary tasks. In other
words, the better the design or technology, the higher the need
for posterior costs. These
(2020) 9:34
arguments show that while IPI activities make a positive
contribution to firm perfor-
mance, there is a limit due to the increasing organizational and
managerial costs. Most
of IPRs such as patent and design patent can be retained for
20 years after registration,
and it should be examined how much this retention increases the
difficulty of imitating
the target product and contributes to sales and profits.
This study revisits the value of product innovations in the food-
manufacturing indus-
try by differentiating new product development and IPIs and by
focusing on innova-
tions protected by IPRs. In specific, we examined how new
product development and
IPI affect the firm performance (i.e., sales and profits). As
mentioned in the next sec-
tion, IPRs have been used as a representative proxy of product
and process innovation
activities in numerous studies. But only a few studies have
evaluated the impact of IPRs
on firm performance in the food industry. In this study, we
adopted a new approach in

which patents, design patents, and trademarks are included as
proxy variables for each
innovation activity, while using the method used in innovation
studies for other indus-
tries. This methodological setting realizes the control of
endogeneity between the prob-
ability of imitations of certain types of innovations and the
returns from them. In doing
so, there are two academic contributions of this study. First, it
quantitatively indicates
the extent to which the effect of IPI, which has been difficult to
quantitatively verify to
date, contributes to the improvement in firm performance.
Second, it proposes a new
quantitative method to demonstrate firm performance based on
IPRs, which has been
challenging to analyze for the reasons noted above.
In the next section, we describe the relation between strategic
choice of innovations
and their economic returns and between IPRs and types of
innovations. In Sect. 3, we
state the methodology of our empirical analyses and show their
results in Sect. 4. In the
subsequent section, we discuss interpretations of our
econometrical achievements and
logical deductions. Finally, managerial implications and
limitations are provided.
2 Literature review and hypothesis construction
2.1 Types of effective innovations in the food‑manufacturing
industry
Although the food-manufacturing industry shows lower R&D
intensity, its business
environment has changed immensely in the past two decades

(Aguilera 2006, 2008).
Stringent and diversified consumer demands request consumer-
needs-led R&D (Aguil-
era 2006). Several technological changes impact on the product,
food supply chain, and
business model itself (Omta and Folstar 2005). As a result,
firms have stepped up their
innovation activities, whereas innovation management has
begun to have a considerable
influence on the firms’ competitiveness (Capitanio et al.
Pascucci 2010; Grunert et al.
2005; Rama and von Tunzelmann 2008).
Product innovations in this industry put a high priority on IPIs
as well as on new
product developments (Menrad 2004). In particular, branding
through minor changes
in functions, packages, or size of the product, or extensions of
product line-ups, consti-
tutes an important part of IPIs. In contrast to the introduction of
new products, brand-
ing activities are economically reasonable in this competitive
and consumer-oriented
market. According to Narayan (2012), a brand is an important
asset for generating rev-
enue. A strong brand ensures the trustworthiness of a product
and provides its supplier
with a significant return (Keller and Lehmann 2006). In
addition, branding maintains
(2020) 9:34
competitive superiority in the long term (Keller 2003),

generates premium pricing (Aila-
wadi et al. 2003; Huang and Sarigöllü 2014), improves the cash
flow of the owner, and
reduces overall costs (Doyle 2000). Several studies revealed
that a brand plays an impor-
tant role in food or beverage firm and firms increasingly
allocate their resources into
branding activities (Fernández-Barcala and González-Díaz
2006; Kathuria and Gill 2013;
Knowles 2003).
Introduction of new package design is a key measure of IPIs to
attract consumers even
when the product itself is not new (Schoormans and Robben,
1997). Silayoi and Speece
(2007) highlighted the positive influence of package designs on
consumers’ appetite for
buying and their willingness to pay. In addition, once the
package is unique, it works
as a signal of the brand (Prendergast and Pitt 1996; Young
2004). In other words, origi-
nal package designs not only raise short-term returns by
attracting consumers but also
enhance long-term profits by maintaining product brands.
Conversely, several argu-
ments have mentioned the negative aspect of new package
introduction as established
packages maintain loyal customers. For example, Garber et al.
(2000) indicate that a
product with loyal customers tends to lose them when the
package is changed, whereas
the product without such customers gains additional willingness
to pay when the pack-
age is redesigned. Firms confront the dilemma of whether or not
they should change
package designs.

Selections of certain types of innovations are heavily influenced
by their innovation
capabilities. Firm size affects the intensities of certain types of
innovations. Large firms
prefer new product developments and medium firms like to
conduct process innova-
tions (Traill and Meulenberg 2001). IPIs are a useful option for
small and medium enti-
ties, which constitute the majority in the food industry and have
limited resources.
2.2 Innovations and intellectual property rights
IPRs (patents, trademark registrations, and design patents) grant
innovators certain
exclusivity to the implementation of these innovations. Of
course, their exclusivity is not
absolute. Some protected innovations are evaded by design
around, and some are inten-
tionally infringed by malicious followers. Despite their
imperfection, they offer at least a
first-mover advantage and divert competitors, resulting in some
financial returns.
In the management study, IPRs are regarded as an indicator of
innovations (e.g., in
the food industry, Grashuis 2019; Grashuis and Dary 2017).
Patents have been used as
a representative proxy of product and process innovation
activities in numerous stud-
ies. For example, Scherer (1965) concluded that there is a
positive correlation between
the number of patent registrations and sales growth by
analyzing 365 American firms
listed in Fortune 500. Comanor and Scherer (1969) revealed a

positive relation between
the number of patents and the sales of new products, with a time
lag of approximately
3 years. Similar results were obtained by Ernst (2001). His
paper identified a strong posi-
tive correlation between the number of applications of patents
and sales, with a time lag
of 2–3 years. Alfranca et al. (2002) reveal that global F&B
firms show a stable pattern of
technological accumulation in which “success breeds success”.
In recent years, emerging studies have been using trademark
applications as an indi-
cator of product innovation output. Mendonça et al. (2004)
argued that the number of
trademark applications reflects new product developments,
since firms tend to apply for
(2020) 9:34
trademark rights immediately before the launch of the new
product, whereas patents
are applied for during the development R&D phase. Although
trademark applications
represent new product developments rather than product
innovations in the narrow
definition, only a few empirical studies have discovered a
correlation between trademark
applications and firm performance. For instance, Sandner and
Block (2011) confirmed
that trademark applications help increase the market value of
firms. Similarly, Green-
halgh and Rogers (2007) noted that applications for trademark

rights help increase the
market value of firms in many (but not all) industries. In
addition, Greenhalgh et al.
(2011) compared a sample of firms that own and do not own
trademark rights and
revealed that the sales growth ratio was higher among the firms
that owned trademark
rights than those that did not own such rights.
In contrast to patents and trademark rights, design patents,
which protect novel
shapes of products, contain certain complexities in their
relationship with innovation
activities. Indeed, design patents are the primary measure to
protect aesthetic innova-
tions (Filitz et al. 2015) and design-award winning products
(Yoshioka-Kobayashi et al.
2018). However, they inherently cover various innovation
outputs such as new product
shapes, package designs, and advertisement equipment as well
as three-dimensional
shapes of novel tools or machines for production. In other
words, they can protect vari-
ous innovations such as product innovations, IPIs, and a part of
process innovations.
For example, approximately half of the applicants in Japan aim
to protect technologi-
cal features and aesthetical shapes (Japan Patent Office 2007).
Due to such complexities,
design patents have generally been left out of econometric
analyses. More specifically,
several non-reviewed papers have reported contradicting results.
Aoki and Odagiri
(2008) discovered a positive correlation in Japanese publicly
listed firms between Tobin’s
Q ratio and design patents stocks. Conversely, Nakamura and

Matsumoto (2009) investi-
gated Japanese publicly listed firms and confirmed a non-
significant correlation between
Tobin’s Q ratio and the number of applications for design
patents per total assets except
in the food-manufacturing industry in which they found a
positive correlations. Inter-
estingly, Bascavusoglu-Moreau and Tether (2011) examined UK
manufacturing firms
and found a positive correlation before 2002 and a negative
correlation in 2007 between
the sales per employees and firms having at least one registered
design in the UK. This
inconsistency implies the complexity of design patents.
The food-manufacturing industry, however, is one exception of
this complexity. As
discussed above, technological innovations in this industry are
limited, and the shape of
a product is not always a source of competition. The primary
competence of the indus-
try includes brands, tastes, marketing, and package designs.
Thus, major subject matters
of design patents in this industry are package designs, and
manufacturing or delivery
equipment. We can measure IPIs and a part of process
innovations using design patents.
2.3 Hypotheses
Our theoretical argument leads to two outcomes of certain types
of innovations.
One is the short-term return of attraction of consumers, which is
delivered from the
introduction of new product or packages. The other is the long-
term benefits arising

from branding and inimitable innovative products. IPRs are
advantageous in testing
(2020) 9:34
these two different returns. New registrations—in other words,
flows of IPRs—rep-
resent new introductions of innovations while their stocks
indicate accumulated
innovations.
IPIs have both aspects. In particular, regarding package designs,
their new intro-
ductions may increase sales or revenues from their implemented
products and their
stocks may bring long-term profits. Considering the
characteristics of this industry,
these innovations show relatively higher impact than other types
of innovations, at
least higher than technological innovations. If not, we cannot
explain the lower R&D
intensity in this industry. As a consequence, this study
generates and verifies the fol-
lowing hypotheses.
Hypothesis 1: A new introduction of hard-to-imitate package
designs increases the
firm performance, particularly sales growth.
Hypothesis 2: Accumulated hard-to-imitate package designs
increase the firm per-
formance, particularly profits.

Hypothesis 3: Hard-to-imitate package designs have a higher
impact on the firm
performance than hard-to-imitate technological innovations.
Our theoretical framework is shown in Fig. 1. We analyze
product innovations in
depth by focusing inimitable incremental innovations and
inimitable technological
innovations. The former is likely to attract consumers and
establish brands. Techno-
logical innovations include certain types of process innovations,
but we do not dis-
tinct two innovations because they are not our primary interest.
We also considered
other process innovations, which are measurable by design
patents. These process
innovations also improve firm performance through cost
reductions. New product
developments, a major element of product innovation, also
contribute to the fruit.
This study captures such innovations with trademark
registrations, which protrude
from the introduction of products new to the market.
Fig. 1 Research framework
(2020) 9:34
3 Methodology
3.1 Dataset
Our research framework confronts an important limitation:
availability of sufficient

design patents with detailed classifications of subject matters.
For example, European
countries have an efficient industrial protection system (Filitz
et al. 2015). However, its
registrations contain only sketchy classifications. Distinctions
of design patent into two
different innovations require a manual procedure. In contrast,
industrial design protec-
tion systems in Japan, Korea, and the United States provide a
precise classification of
registered designs. Moreover, granted designs in these nations
are certificated its novelty.
A further challenge of our analysis is the market structure.
Some food and beverage
industries are under a strong influence of dominant
manufacturers. In the United States,
several giant multinationals, such as Mars, Mondelez, and
Kellogs, actively compete in
the market. We require a more complicated research framework
to analyze the industry
in the country. Antithetically, Japanese and Korean industries
consist of several leading
manufacturers (Meiji, Nippon Ham, and Ajinomoto in Japan;
CJ, Nongshim, and Sam-
yung in Korea) and numerous small- and medium-sized entities
(SMEs).
Therefore, this study analyzed 192 Japanese food and beverage
firms to verify the
model. More specifically, the sample consisted of 103 publicly
listed firms on the Tokyo
Exchange and 93 unlisted firms obtained from the 2008 to 2014
Japanese Influen-
tial Non-Listed Firm Annual Handbook (Kigyo Shikiho
Mijoujouban). We selected the

firms that produced products for end-customers and eliminated
those that specialized
in B2B services such as original equipment manufacturers and
foodstuff/food material
manufacturers.
The period from 2009 to 2013 was chosen as the analysis period
to eliminate the effects
of the economic downturn precipitated by the Lehman Brothers
bankruptcy. To inves-
tigate the number of possessions (stocks), we acquired patent
and design patents’ data
beginning from 1990.1 Then, we tracked the transition of the
applicant name for each
firm in the past and the principal subsidiaries that applied for
IPR, based on the appli-
cant name disambiguation database, which is provided by the
National Institute of Sci-
ence and Technology Policy of Japan. The patent and design
patents’ data were acquired
from a commercial patent and design patents’ database. To
correct some defects, we
completed the dataset using the official design patents’ database
provided by the Japan
Patent Office. Finally, trademark data were acquired from the
official trademark rights
database, whereas financial data were obtained from the Nikkei
NEEDS commercial
database and the Kigyo Shikiho Mijoujouban (see above).
3.2 Variables
3.2.1 Dependent variables
As our assumption is that innovation activities generate
additional sales and profits, we

adopt sales and operating profits as firm performance
indicators. The dependent vari-
ables used in this study included (1) the logarithmic value of
operating profits (Hsu
et al. 2013); (2) annual growth rate of sales (%) (Scherer
1965); and (3) annual growth
1 In Japan, patent have a duration of 20 years from the time of
application and design rights have a duration of
20 years from the time of registration. Therefore, we acquired
data filed after 1990.
(2020) 9:34
of operating profits. For operating profits, we adjusted each
firm’s difference in a given
accounting period. More specifically, if the operating profits,
r(t), of year t closed in
month n, then the adjusted sales, R(t), were calculated as
follows:
Seasonal changes were not reflected in the results of the
calculation. Also, we indicated
the value obtained as defective in cases where deriving an
accurate value was impossible
due to changes in the accounting period.
3.2.2 Independent variables
Among the independent variables, stock and flow (the number
of applications or new
registrations) corresponding to both patent and design patents
were used. In this case,

“stock” is defined as the total number of rights that were
confirmed as effective at a cer-
tain point in time at year t, whereas “flow” is the number of
cases accumulated from t
− 2 years to t year (3 years). We chose 3 years as the duration
based on Ernst’s (2001)
claim that firm performance is reflected several years after
patent application.
The number of applications in year t was counted for both
trademark and design pat-
ents, based on the following reasons. First, the interval between
the application and the
registration for trademark rights and design patents is less than
1 year. Second, regard-
ing trademarks, their applications well represent new product or
service introductions
(Greenhalgh and Rogers 2007; Sandner and Block 2011;
Schautschick and Greenhalgh
2016), focused on applications for trademark rights. Third,
when examining the data
from the perspective of intellectual property, the exclusive
effect of owning trademark
rights is limited to restricting competitors from using a given
name and trademark. For
these reasons, we positioned trademark rights as a proxy for the
development of a new
product line.
As discussed above, design patents in Japan are used to protect
both the technological
configuration and the outer shape of a product, as a
communication channel to consum-
ers. These purposes differ in that the former pertains to the
protection of technological
innovation, whereas the latter corresponds to the protection of

IPI. Moreover, design
protections on package designs are often used for the purpose of
maintaining the prod-
uct brand using a specific package design over the long term. In
fact, 41% of the Japanese
manufacturers that conduct R&D stated in the questionnaire
survey that package design
protections are primarily for the brand creation of products or
services. Meanwhile, only
23% the respondents based their reason on the protection of
other types of industrial
designs (Japan Patent Office 2010a).
To categorize design patents, each design patent is assigned by
an examiner of the
Japan Classification for Industrial Design (JCID) (Table 1).
Based on this process, we
selected several classifications, which is apparently related to
the following three pur-
poses: (1) communication channel-related designs such as
packages, display instruments
for shops, and advertisement equipment (package-related
designs); (2) product shape
designs, including the shapes of food products or tableware
(food shapes and tableware);
and (3) process innovation-related designs such as shapes of
tools or machines for pro-
duction or transportation (manufacturing equipment). The
difference between the first
(packages) and second (tableware) purposes is their role; that is,
the former provides
R(t) = r(t) × n/12 + r(t + 1) × (12−n)/12.

of 19Yoshioka‑Kobayashi et al. Economic Structures
(2020) 9:34
communication to consumers at the time of purchasing, whereas
the latter often works
as a communication channel at the time of consumption. Since
JCIDs are assigned by
professional examiners in accordance with the detailed
guidebook, its reliability is quite
high.
3.2.3 Control variables
The control variables are the logarithmic value of the number of
employees and asset
intensity, which is the volume of total assets divided by the
number of employees (both
variables are only for listed firms). The annual amount of sales
in the previous year is
also treated as a control variable. It is important to note that
some dependent variables
that we focused on included differences, compared to those in
the previous year. To
avoid multicollinearity in the regression estimation, we
excluded the data regarding the
amount of R&D and advertising expenditure, since such data
exhibit a high correlation
coefficient (greater than 0.8) with the number of employees.
3.3 Descriptive statistics
The descriptive statistics of the variables is presented in
Table 2.
3.4 Analysis model

We estimated the variables using the multiple regression
methods. Since no appropri-
ate …
http://dx.doi.org/10.17770/lner2019vol1.11.4310
This is an open access article under the Creative Commons
Attribution 4.0 International License.
THE IMPORTANCE OF INTELLECTUAL PROPERTY IN
BUSINESS
Juna Kjaksta1, Kristaps Gailis2
1 Mg. iur, lecturer, Rezekne Academy of Technologies,
Rezekne, Latvia,
e-mail: [email protected]
2 Mg. iur, lecturer, Rezekne Academy of Technologies,
Rezekne, Latvia,
e-mail: [email protected]
Abstract. The search for a balance of interests of right holders
and users, legal means for
the exclusive rights enforcement in the conditions of the
development of new technologies,
the problems of protection of intellectual property are
considered in the paper. At the
present time intellectual property is considered to be one of the
most valuable assets of a
business. Possessors of rights can secure their loans using their
intellectual property as
collateral. The authors claim that the Latvian legal and
regulatory framework does not

cover essential issues. The aim of the research is to explore and
identify the importance of
intellectual property rights in business. The following tasks
were set to achieve the aim: to
explore the theoretical aspects of intellectual property rights, to
identify possibilities for
intellectual property development in business. The following
scientific research methods are
used in the paper: the development of intellectual property
rights in commercial law is
investigated with the help of the descriptive method; the
systemic method is used to analyse
national legal norms in conjunction with international
documents and recommendations;
the comparative method has been used to study models of
intellectual property rights.
Keywords: exclusive rights, intellectual property rights, piracy,
plagiarism.
JEL code: O34, K11.
Introduction
It is customary to talk about intellectual property (IP) as the
result of a
person’s mental activity. Intellectual property includes
inventions, literary
and artistic works, projects and symbols, names and images
used in
commercial activities. Legal protection of intellectual property
is provided
by patent, copyright, industrial designs and trademarks. These
tools allow

authors to get recognition or benefit financially from their
creativity, giving
them certain rights, which establishes the use of the results of
the author's
thoughts by third parties (Pētersone, 2013). The relevance of
intellectual
property lies in the fact that information technology transforms
the structure
of modern production and distribution, significantly affects
labour
productivity, becomes the basis of enterprise competitiveness,
and is an
indicator of the viability of production.
Research novelty: The importance of material property in
business
was analysed by numerous studies of law scientists, but only a
few studies
are devoted to the analysis of intellectual property. The
topicality of
intellectual property in entrepreneurship could be on the
theoretical plate,
32 Latgale National economy research
especially considering that in Latvian law, intellectual property
issues from
the point of view of commercial law have not been the subject
of extensive
and in-depth research so far.
Research period: 2017 – 2019.
Research aim: To explore and identify the importance of

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