No kidding when it comes to litigation

Mon, Dec 17, 2012, 00:00

Entrepreneur Richard North has no fear in taking legal action against companies that have stolen his ideas

Having their ideas ripped off is soul destroying for small companies. Even more galling is that the guilty parties rarely get brought to justice. They bank on small businesses having neither the money nor the bottle to challenge them. Those who assumed this about Richard North’s toy company, Wow!, were wrong.

North has already spent about €185,000 on patent attorneys and legal support to stop companies counterfeiting and selling his company’s remote control shark and fish toy, Air Swimmer. With a number of other actions pending, the company’s legal bill is fast heading towards €600,000.

Serial entrepreneur

North estimates that counterfeit versions of Air Swimmer could have cost his company as much as €20 million in lost sales in 2011. With this year’s offering from Wow! (a battling robot called Attacknid) slugging it out with Furby to be the top-selling toy this Christmas, North is no mood to stop chasing the forgers.

North is a serial entrepreneur who loves gadgets and toys. He fizzes with enthusiasm when talking about Attacknid and how his company worked with a young inventor living in a remote cabin in the hills of Vermont to develop it.

Attacknid is probably not every little girl’s dream, but its exploding armour-clad body has gone down spectacularly well with boys (of all ages) and there were queues to see it in action when it went on sale here in Smyths Toys in October.

“The toy business is something of an enigma. It is notoriously difficult to crack and littered with failures,” North says. “I hear about IP infringements all the time and many good friends in the industry who create wonderful toys are sometimes in despair at the illegal rip-offs that steal their investment. We rely on innovation both internally and in association with inventors all over the world and we are not afraid of taking on big names.”

That said, North chooses his battles carefully. He breaks toys into two basic categories – “items”and toys with the potential to become enduring brands. An item is a toy that probably won’t last beyond its first Christmas. His attitude to items is to get them to market quickly, don’t waste money protecting them and make hay while the sun shines.

Toys with endurance potential are an entirely different ball game. These are the ones North is prepared to fight for. “We knew we had something special with Attacknid because it’s visually spectacular and a modern take on the age-old pastime of battling with toy soldiers,” he says.

“The tooling alone cost around €400,000 and we have spent around €75,000 on patents so far. This is a toy with a defendable competitive advantage and we believe it will still be here in five years time and that the Combat Creatures family will grow. Part of the development process has been to ‘future proof’ the Attacknid with sophisticated electronics that will allow it to interact with all sorts of smart devices coming down the tracks.”

Wow! employs 60 people in Wolverhampton and is among the 100 fastest growing companies in the UK. North has no formal qualifications, having served his time as a salesman before setting up a photography company, followed by an internet search engine, followed by an online gift company, followed by Wow!

“In terms of global toy companies we are small and because of that the big guys ignore you if you try to tackle them about infringements,” North says. “They assume you will go away because you lack the tenacity and money to pursue them. We had both.”

Copies are most likely to come from places such as China and tracking them down is a problem. But North says is also possible to take proceedings closer to home against retailers and their suppliers.

Deterrent

Wow! took an action against the Le Clerc supermarket chain in France and was also successful in having counterfeit goods destined for a UK online retailer intercepted and seized by trading standards officers.

People often ask me why we expend all this energy and money chasing these guys? The answer is if we don’t, why would anyone want to innovate?” says North. “Richard Dyson made people think twice about copying his technology and we too believe that if you put up a hard enough fight, it will act as a deterrent.

“I’m not saying legal actions will completely prevent copies of Attacknid coming onto the market. But I’d put money on it that there will be far less copies appearing than if we hadn’t shown we were prepared to go after people.

“If you are serious about innovation and have the finances to protect yourself and a balance sheet strong enough to go to war, then do it. Far too many companies are lazy and want to piggyback on other people’s ideas and ambitions.

“What would be useful is a fast-track way of getting these people. Right now it takes over a year and the copies have been made and sold by the time they are stopped. For me the best bit about Wow! is innovating. The worst bit is defending what we’ve created. The fun and the upset go hand in hand.”

Toy stories: Protecting your inventions

Bringing the ideas thieves to justice. Is it worth the effort?

Yes, if it’s a product with a defendable competitive advantage.

Yes, if it’s a product with longevity potential.

Yes, if you have the money and the energy.

No, if it’s a one-season wonder product.

No, if you don’t have the budget to keep supporting the product in the marketplace.

No, if you’re not patient and tenacious.

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