Copyright protects the expression of an idea. This includes spoken, written and audio-visual expressions. Hence books, movies, documentaries, photos, recordings, paintings, articles, drawings, poems, songs and music are all covered by copyright (subject to the creators jurisdiction).

Trademarks (and service marks) are a distinctive sign, logo, word,  phrase or indicator used to indicate a good or service comes from a specific individual, company or group as opposed to some other source. It is designed to give consumers confidence in the quality and reputation of a good or service.

Many people say “Monster cable” is copyrighted when they actually mean it’s trademarked.

Trademarks were invented to prevent unscrupulous merchants passing off an inferior tradesman’s work for a more reputable work. So master tradesmen would make their mark on the item they’d made indicating they had approved it’s quality and finish, much like a master painter signs his work.

Really good and expensive work attracts counterfeits. Wanna purchase a watch?

Trademarks don’t have to be registered, but it’s a good idea. Then other similar trademark holders can object and everyone does the intellectual property dance.

It is supposed to be nearly impossible to trademark something generic such as the word “Elite”, but large IP practices seem to get them registered. Often a registration is canceled  on appeal for being too generic or if found to be in broad use by many people.

If the name is a range identifier as opposed to the main brand, and it is not attempting to pass itself off as another brand, then trademark registration is either not worth defending or too generic. So Kogan is releasing the Elite range and Panasonic also has an Elite range. Nobody is going to think they come from the same company.

My preference  is brands, ranges and models be uniquely named as it makes searching for them so much easier.

Board members of community service organizations have legal responsibilities just like for-profit corporate boards. If you want to be effective, learn the rules. For most service organizations the rules are laid out in the constitution and applies to formal board members or “committee” members. Too many people don’t look at this document until it’s too late. I’ve seen active Not-For-Profits that have not held an Annual General Meeting for 3 years because the board blindly followed what the previous guys did. But someone forgot to have an AGM.

Some constitutions are hard to read, in that case consider updating the constitution to plain English. The existing constitution should have provisions for making changes.

Take the time to familiarize yourself with the contents of the constitution.

I am advising a non-profit organization on a internal members dispute. That’s one advantage of my background in Alternative Dispute Resolution and consulting. Sadly it means I spend too much time with people who are in the middle of arguments. Getting the emotion and heat out of a dispute is the best way to win a satisfactory resolution. That outcome may be Win-Win, Win-Lose or even Lose with damage mitigation.

This nonprofit organization had to spill its board but encountered two problems. Firstly most board members relied on their Chairman to explain this board removal process outlined in the constitution. Not enough of them checked the details themselves. Secondly the process they followed was mostly right. Had they read the constitution, they could have quoted the clause under which they acted and worded their resolutions better. Now they’ve got a vocal and unhappy minority who are threatening legal action because of some unclear wording.

I look forward to watching the fall-out in the industry over this. When a major market player decides to flex their muscle, they should make sure they are a big enough player. I suspect that at a claimed 18% of the Australian book retail market Angus & Robertson will find it is not enough to succeed.

Bunnings on the other hand does have enough market share. But more on that later.

Update Michael Rakusin has granted permission to reproduce his letter below

6 August 2007
Mr Charlie Rimmer
ARW Group Commercial Manager
14th Floor, 379 Collins Street,
Melbourne, VIC 3000

Dear Mr Rimmer

We are in receipt of your letter of 30 July 2007 terminating our further supply to Angus & Robertson. As you have requested, we will cancel all Angus & Robertson Company orders on 17 August and will desist from any further supply to your stores.

I have to say that my initial response on reading your letter as to how you propose to “manage” your business in the future was one of voluble hilarity, I literally burst out laughing aloud. My second response was to note the unmitigated arrogance of your communication, I could not actually believe I was reading an official letter from Angus & Robertson on an Angus & Robertson letterhead.

My reply to you will perforce be a lengthy one. I hope you will take the trouble to read it, you may learn something. Then again, when I look at the level of real response we have had from Angus & Robertson over the past six or so years, I somehow doubt it.

The first thing I would say to you is that arrogance of the kind penned by you in your letter of 30 July is an unenviable trait in any officer of any company, no matter how important that individual thinks himself or his company, no matter how dominant that company may be in its market sector. Business has a strange habit of moving in cycles: today’s villain may be tomorrow’s hero. It is quite possible to part from a business relationship in a pleasant way leaving the door open for future engagement. Sadly, in this case, you have slammed and bolted it.

More to the point, however, we have watched our business with Angus & Robertson dwindle year upon year since 2000. We had to wear the cost of sub-economic ordering from you through ownership changes, SAP installation, new management, and stock overhang. In summary our business with you has dropped from over $1.2 million at the end of 2000 to less than $600,000 in 2007.

You would be quite correct to question whether our offering to the market had changed in any way. The answer can be derived from the fact that during the same period our business with Dymocks, Book City, QBD and Borders continued to grow in double digits, our business with your own franchise stores has grown healthily, and our overall business during the same period has grown by more than 50%.

Six years ago we were allowed to send reps to your company stores and do stock checks. Then these were “uninvited” and we had to rely on monthly rep calls to your Buying Office. Subsequently even that was too much trouble; your Buying Office was too busy to see us, so we were asked to make new title submissions electronically. Every few months the new submission template became more and more complex. This year, we have been allowed quarterly visits to your Buying Office at which we were to be given the opportunity to sell to all your Category Managers. At the first, we did indeed see all of the Category Managers – but they didn’t buy any of the titles offered. At the second, one Category manager was available, and again no purchases resulted. At the last (only last week), two Category managers attended. Through all of this, your overworked and under resourced Buying Department never got to see, let alone read, an actual book. While one may be forgiven for believing that Angus & Robertson is actually a company purveying “Sale” signs, I do believe you are still in the book business?

That Angus & Robertson is struggling for margin does not surprise me. It amazes me that the message has not become clear to your “management”: there are only so many costs you can cut, there is only so much destiny you can put in the hands of a computer system, there are only so many sweetheart deals you can do with large suppliers. After that, in order to prosper one actually has to know one’s product and have an appropriately staffed buying department. Most importantly, one has to train sales people of competence. You will never beat the DDSs at their cost cutting game, you will only prosper by putting “books” back into Angus & Robertson. And it would seem to me paramount to stop blaming suppliers for your misfortunes, trying ever harder to squeeze them to death, and actually focus on your core incompetencies in order to redress them.

How a business that calls itself a book business is going to do without titles such as the Miles Franklin Prize winning book or titles like Rich Dad Poor Dad (according to this week’s Sydney Morning Herald it is still the fifth best selling business title in Australia nine years after publication) is beyond me. And how in good conscience Australia’s self-purported largest chain of book shops proposes to exclude emerging Australian writers who are represented by the smaller distributors, is an equal mystery.

We too have expectations Mr Rimmer. We have had the same expectations for many years, none of which Angus & Robertson have been willing to deliver:

• That we are treated with equal respect to the larger publishers within the obvious parameters of commercial reality;
• That your Buying Department is able and willing to assess our books with equal seriousness to those of the big publishers and buy them appropriately;
• That you recognise the fundamental differences between the smaller distributors and the larger publishers and stop demanding of us terms that we are unable to deliver;
• That you would support and help develop Australian literature.

Had you made any effort to meet these expectations you would have found the niche we should have occupied in your business, as have all other book shops, and you would have found our contribution to the profitability of your business would have been dramatically different.

In summary, we reject out of hand this notion that somehow, even giving you 45% discount on a Sale or Return basis, with free freight to each of your individual stores, where we make less than half of that on the same book, puts us in the “category of unacceptable profitability”. We have seen Angus & Robertson try this tactic before – about 12 years ago Angus & Robertson decided that unless we gave them a 50% discount, they would not buy from us any longer. We refused. Angus & Robertson desisted from buying from us for seven months. We survived, Angus & Robertson came back cap in hand.

We have seen Myer effectively eliminate smaller suppliers. We survived and prospered but look at the Myer Book Departments today.

We have seen David Jones decide that it had too many publishers to deal with and to exclude the smaller suppliers. We survived and prospered but look at the David Jones Book Departments today.

David Jones and Myer sell other goods; Angus & Robertson does not.

That the contents of your letter of 30 July are both immoral and unethical, I have no doubt. That they probably contravene the Trade Practices Act, I shall leave to the ACCC to determine. (Five percent interest PER DAY !!!)

If you wish to discuss any of the contents hereof you may call my secretary for an appointment at my office in Frenchs Forest. I shall be marginally more generous than you and at least allow you to pick a convenient time.

Michael Rakusin
Director
Tower Books Pty Ltd
Carpentaria, Alexis Wright : Winner of 50th Anniversary Miles Franklin Literary Prize, 2007

Copy: Graeme Samuel, Chairman, ACCC
Rod Walker, Chairman, ARW Group
Ian Draper, ARW Group Managing Director
Rickard Gardell, Managing Director, Pacific Equity Partners
Simon Pillar, Managing Director, Pacific Equity Partners
Barbara Cullen, CEO, ABA
Maree McCaskill, CEO, APA

A friend describes it as “Bookselling, The MBA way”. This is bound to be one of the case studies I’ll use in my MBA.

Here is the text of the letter for the screen readers and the blind:

Angus & Robertson

30th July 2007

Michael Rakusin
TOWER BOOKS
Unit 2 / 17 Rodborough Road
Frenches Forrest
NSW 2086

Dear Michael

I am writing to inform you of some of the changes to the way we manage our business.

We have recently completed a piece of work to rank our suppliers in terms of the net profit they generate for our business. We have concluded that we have far too many suppliers, and over 40% of our supplier agreements fall below our requirements in terms of profit earned. At a time when the cost of doing business continues to rise, I’m sure you can understand that this is an unpalatable set of circumstances for us, and as such we have no option but to act quickly to remedy the situation.

Accordingly, we will be rationalising our supplier numbers and setting a minimum earnigs ration of income to trade purchases that we expect to achieve from our suppliers.

I am writing to you because TOWER BOOKS falls into this category of unacceptable profitability.

As a consequence we would invite you to pay the attached invoice by Aug 17th 2007. The payment represents the gap fro your your business, and moves it from an unacceptable level of profitability, to above our minimum threshold.

If we fail to receive your payment by this time we will have no option but to remove you from our list of authorised suppliers, and you will be unable to complete any further transactions with us until such time as the payment is made.

I have also attached a proforma for you to complete wand return to me, with your proposed terms of trade for our financial year commencing Sept 1st 2007. We have the following expectations:

• All agreements contain a standard rebate, a growth rebate and a minimum co-op commitment to enable participation in our marketing activity.

• Growth rebates activate as soon as our purchases with you increase by $1 on the previous year.

• All rebates are paid quarterly for the previous quarter’s performance, you must make sure that your remittance, with calculations, is received by us by the 7th of the month following the preceding quarter. Any remittances not received by this date will attract a daily 5% interest charge.

I am also including a copy of our ratecard, and our marketing calendar, to enable you to begin planning your promotional participation now.

If you would like to discuss this with me in more detail, I am delighted to confirm an appointment with you at 1.00pm on Friday 17th August for 10 minutes at my offices at 379 Collins St, Melbourne.

Best Regards

[signed]

Charlie Rimmer
ARW Group Commercial Manager

Enc: A&R Ratecard
A&R Marketing calendar
Trading Terms Proforma
Invoice

Keep detailed minutes of the meeting and if there is an error or over-simplification move an amendment before adopting the minutes of the previous meeting.

I am aware of a board currently trying to deal with a decision that was not properly minuted. An executive director overstepped her delegation but the minutes of the relevant meeting did not spell the limitations out. But every board member remembers the discussion and the limits placed on the delegation. When the deal came unstuck 12 months later the board have a major problem with their process.

Directors in common law countries have a duty of care to ensure they are adequately informed. Directors are expected to make their own enquiries to ensure they are receiving accurate information from the executives reports.

Some risks haven’t been mentioned.
Sarbanes-Oxley Act (SOX): Directors have significant and onerous obligations even if they are on the board of a small public company.

NEWS ALERT: SOX could apply even if your company is not domiciled in the USA. If you do business in the USA there is the potential to be within that jurisdiction.

This includes selling products to a USA domiciled customer especially if you sell FIS, CIF or C&F. As the risk and title of the goods does not pass until the goods are in the USA a case can be made that you are trading in the USA.

If your email or webhosting is in the USA an argument can be made that you have a US presense and are subject to SOX.

This is a stretch but ignore it only if you never intend to set foot in the USA. They’ve arrested hackers on tourist visas in the past. Google Jon Lech Johansen (DeCSS) and Dmitry Sklyarov.

Secondly boards of non-profits in receipt of government funding must not only be aware of their fiduciary duties (including duty of care and duty of loyalty, but also to avoid conflict of interest), there are laws for the jurisdiction or the funding body that carry civil or criminal penalties.

Thirdly in some jurisdictions your personal credit history/score includes an evaluation of the companies where you are a director. This happened to me when I agreed to attempt a turnaround that did not succeed. The company was liquidated and I still have to explain I was a non-executive director (sometimes banks even listen).

Insurance policies can be void in the event of fraud or malfeasance.

As a result of my experience I only serve on boards that I am passionate about. It also means I am more conservative in my board role than I am with my own money.

As for suing directors for breach of duty? If there is fraud or malfeasance then let the ambulance chasers loose. Sadly all other cases highlight the move of the Common Law world from one of responsibility to a world of blame and entitlement. An unfortunate by-product of the oversupply of lawyers.

Firstly if I haven’t specifically solicited a confidential email why should it be binding on me. Here is an interesting point from the abuse.net database:

IF YOUR MESSAGE CONTAINED A NON-DISCLOSURE OR CONFIDENTIALITY NOTICE: We do not solicit or accept confidential information for the contact database since the contents of the database are available to the public. Confidentiality notices are legally meaningless in the United States, where abuse.net is located, so such notices are ignored. If you accidentally sent something that you do consider confidential, tell us nicely and we’ll consider deleting it.

So think twice about blindly grabbing someone’s signature file and using it in your organisation.

That also applies to Privacy Policies and Terms of Trade. The number of businesses I’ve seen that have obviously borrowed their terms of trade from another supplier without thinking it through. Terms of Trade has implications for accounts receivable, collections and insolvency. At least get an advisor’s opinion.

Ha!

I found definitions and some general (albeit useful) guidelines. But you’d think there would be an accessability site somewhere dedicated to enabling citizens to take control of their legal affairs. While I don’t think it is a conspiracy by the legal profession to protect their monopoly, the complexity and formality of the legal process is unjust and disenfranchises citizens.

Democracies should embrace accessability and root out practices and procedures that create obstacles to ordinary citizens participating in social, political and legal action.

Now that I’ve made such a high faluting statement, I don’t know how to simplify the process so typical high-school educated citizens can participate. I recall when selling books to prison libraries, the most requested subject was a criminal law textbook for a 4th grade reading age. Prisoners did not lack intelligence; they lacked education, vocabulary and articulation.

So back to writing affidavits, if it takes five years of university education, a law degree and two or three years experience in a legal practice to lay out evidence in a civil matter, something is broken.

Plain english law is the first step. What’s the next?