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Mixed Chicks

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Questions and Reponses, Scarborough, Case 1 (Mixed Chicks), page 674.
1. Why is securing proper intellectual property protection such as trademarks, patents and copyrights important for entrepreneurs?
Answer:
Especially in this case, securing proper intellectual property protection is very important. As mentioned in the text, small businesses do not have the cash and time to be involved in law suits. The small business had a great idea with their hair products and made a good amount of money until a retail giant sold a cheaper version of their product. The small business can file a lawsuit however will be put at risk if they do not win it. An entrepreneur can fail or succeed as we all know. It is very important to have a copyright, trademark or patent in case the product is very successful. If there is not any protection, the case (Mixed chicks) shows what can happen. (Scarborough, 2015, 674; WSJ, Sept 25, 2011)
2. Analyze advantages and the disadvantages of filing a trademark infringement lawsuit against the large chain selling Mixed Silk products? Conduct the same analysis for filing a lawsuit.
Answer:
Filing a trademark infringement in court would have several advantages. Etheridge and Levy would get the exclusive rights to sell the product as they designed it. Other companies cannot sell the product or a similar version of it that would confuse the customer and make them believe that it was the original product. The small business would not have to worry about loss in revenue as they are the only supplier for this specific hair product. However, in order to get to this point, the small business would have to file a lawsuit for trademark infringement which can cost a lot of money. Neither party knows at this point if they will win and take a risk upon them. As the text explains, if the small business challenges the big retail chain, who will have to take their products off their shelves for the time the lawsuit is underway, they may have to reimburse them for loss in revenue if they lose the lawsuit.
On the other side, the small business can continue their business without filing a lawsuit against the large retail chain. In this case, the small business risks big amounts of revenue as they sell the product at a much higher price than the big retailer. The small business could add something to their original bottles such as a slogan or something very unique which the large retailer does not display on their version. (Scarborough, 2015, 674; WSJ, April 4, 2009)
3. What course of action do you recommend that Etheridge and Levy take? Explain?
Answer:
The small business should file the trademark lawsuit and do all they can do win it. Overall the only product they sell is now being sold at a lower price at a large retailer. The fact that the large retailer has the same shape and look of the original bottle which would confuse the consumers should give them the necessary facts to win the lawsuit and continue operating their small business with prices they can set. With every lawsuit comes a risk but it’s a risk of paying the retailer damages in revenue rather than closing their business because they cannot sell any more products. (Scarborough, 2015, 674)
4. Can you recommend ways that Etheridge and Levy might be able to use the significant difference in the size of their company and the national retail chain to their advantage, especially for marketing their company?
Answer:
The small business could advertise that it is a local business, supporting the community and making sure that the money is used to reinvest in the city that they operate in, rather than the big retail chain which will send the money somewhere else. It could also advertise that proper wages are paid to their employees with benefits. This is possible as they charge a higher price and can therefore use the money to invest it in other places whereas the big retail chain has a thin profit margin. Another good marketing strategy is to let the public/ community know that they are trying to expand and bring to jobs locally which will enrich the community overall. (Scarborough, 2015, 674; WSJ, Nov 3, 2014)

Online Sources: http://guides.wsj.com/small-business/starting-a-business/how-to-trademark-a-company-name/ http://www.wsj.com/articles/SB123869022704882969
http://www.wsj.com/articles/four-marketing-strategies-that-paid-off-for-small-companies-1414965293

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