Under the Influence with Terry O'Reilly - Copycat Brands

Episode Date: January 13, 2024

This week, we look at copycat brands.Even though they walk a razor’s edge legally, copycat brands seem to pop up all over the world.You may like Walmart here, but there’s a Wumart in China.You may like North Face apparel, but did you know there was a South Butt brand?And, we’ll tell the story of a copycat cookie that overtook the original to become the best-selling cookie in the world. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. This is an apostrophe podcast production. You're under the influence with Terry O'Reilly. Back in 1978, an Australian rock band was formed in Melbourne called Men At Work. The band released its debut album in 1982 titled Business As Usual. The first single from that LP was Who Can It Be Now, which reached number one on the Billboard Hot 100. Ten weeks later, the second single, Down Under, was released and soared to number one as well. It was one of the few major rock songs to feature a flute solo. The following

month, Business As Usual began a remarkable 15-week run as the number one album on the Billboard 100. Men At Work became the first Australian group to have a number one album and number one album on the Billboard 100. Men at Work became the first Australian group to have a number one album and number one single on the Billboard charts simultaneously. The band would win a Grammy as Best New Artist of the Year in 1983. 25 years later, an Australian music-themed TV game show called Spicks and Specks asked the following question.

What children's song is contained in the song Down Under by Men at Work? One of the competitors on the game show answered the Kookaburra song, which was correct. Somewhere, an executive at publishing company Larrikin Music sat upright and said, Wait, what? Larrikin Music owned the publishing rights to the Kookaburra song. It had been written back in 1932 by music teacher Marion Sinclair. She had entered the song in a competition run by the Girl Guides. The rights of the winning song were to be sold to raise money to purchase a camping ground.

The Kookaburra song won and has become a campfire favorite around the world ever since. Marion Sinclair lived until 1988, which meant the song was still protected under copyright. So Larrigan sued Men at Work, stating that the distinctive flute solo in Down Under was copied from the Kookaburra song. Larrigan demanded 60% of the music royalties. A judge ruled in favor of Larrican music, but stipulated that the flute solo was neither the hook nor a substantial part of the song and therefore ordered Men at Work to pay Larrican 5% of the music royalties from 2002 onward.

It was a strange copycat case, decided 25 years after the song became a hit. There are some strange copycat cases in the world of marketing, too. Sometimes, a company's logo and its products are copied by companies in far-off foreign countries. Sometimes, a company's entire image and branding is copied by another company that claims it's free to do so because it's a parody. And sometimes, a cultural icon is revealed

to be a copycat product and the original is relegated to history as a cheap knockoff imitator. It's a recipe for lawsuits. You're under the influence. If you were looking to save money in Beijing, you might visit a department store called Walmart.

Not Walmart. WooMart. Like the giant American retailer, the WooMart department stores have a conspicuous blue logo, they offer low prices, the stores are well-lit, very clean, and its wares are thoughtfully displayed. Although, the products may differ a bit from the ones you may be used to. The Walmart food department features basins full of live fish, sea turtles, birds' nests, pigs' feet, and sea cucumbers. Walmart entered China in 1996 and has around 400 stores. Walmart, on the other hand, was started in 1994 by a Chinese Stanford University student

who had developed an IT system for retailers. He couldn't generate any interest from American companies, so he returned to China and opened his own chain of retail stores. Today, Walmart has over 1,000 locations. Only 1.4% of urban Chinese households make more than $15,000 a year, so low prices are extremely important. In just over 10 years, Walmart has become the leading retailer in Beijing.

Walmart maintains that only English-speaking people would notice the similarities between Walmart and Walmart, as the two names look completely different when written in Chinese. Although, a spokesperson for Walmart has candidly said they hope to become the Walmart of China.

Starbucks is ripe for copycat brands. Here's an interesting case. A coffee shop opened in Los Angeles called Dumb Starbucks. The logo adorning the storefront and on the coffee cups was the actual Starbucks logo, only with the word dumb in front of it. Dumb Starbucks offered the same decor as Starbucks and many of the same menu items. Coffee lovers could enjoy things like a dumb espresso

and a dumb vanilla blonde roast in three sizes, dumb tall, dumb grande, and dumb venti. There were even dumb versions of the CDs you used to see at the Starbucks cash.

Starbucks is extremely vigilant and litigious when it comes to protecting its trademark. So what was dumb Starbucks thinking? As it turns out, the owner was a comedian named Nathan Fielder. Hi, I'm Nathan Fielder, president and founder of Dumb Starbucks, a brand-new coffee experience located in Los Angeles, California. By adding the word dumb, we are legally allowed to use the coveted Starbucks name and logo

because we've fulfilled the minimum requirements to be considered a parody under U.S. law. As you just heard, by adding the word dumb, Fielder was technically making fun of Starbucks, using parody to make a point about their high-priced coffee, and therefore could use their trademarks under the fair-use stipulation. According to Fielder's lawyer, dumb Starbucks wasn't a coffee shop. It was an art gallery. The coffee you could buy there was considered performance art.

When Dumb Starbucks opened, people lined up for over an hour to get a coffee. Dumb Starbucks was the top trending hashtag on Twitter. Fielder held a well-attended press conference on opening day, saying this was a real business he planned to get rich from. Good afternoon, and thank you all for coming. My name is Nathan Fielder, and I'm the president and founder of Don's Starbucks. Firstly, I'd like to thank our customers, neighbors, and the community of Los Feliz for embracing my independent coffee shop with open arms. I'm proud to announce that we'll soon be opening a second Dunk's Starbucks location in Brooklyn, New York

in the next few weeks. The coffee shop was created to be part of Nathan Fielder's Comedy Central TV show called Nathan For You, where Fielder uses his business background to dream up wacky, non-traditional business ideas. The show's slogan is, Real people, real business, results not guaranteed. Dumb Starbucks didn't last long.

The coffee shop was closed down when the L.A. County Department of Health Services slapped the store with a notice of closure for operating without a valid public health permit. Speaking of parody, have you heard the one about the North Face suing a kid for his south butt? A first-year college student named Jimmy Winkleman needed a way to generate money to help pay his tuition. So he created a line of casual clothing that spoofed the popular brand called the North Face. Winkleman called his brand the South Butt. His company's slogan was Never Stop Relaxing,

which was a parody on the North Face slogan Never Stop Exploring. The North Face has a logo of a half dome with three ridges. The South Butt logo is similar but upside down with two ridges,

which Winkleman confirmed was meant to infer butt cheeks. The South Butt clothing line includes fleece jackets, shirts, and shorts. Winkleman posted a video on YouTube saying, Save your money, don't buy the name, relax with South Butt. It didn't take long for the North Face to issue a cease and desist letter. The North Face apparel company threatened to sue Winkleman if he did not cease all sales and promotion of the South Butt. The letter said that the use of the South Butt logo

and the Never Stop Relaxing slogan was not defensible as parody. The company demanded that Winkleman abandon his pending South Butt trademark application because the similar logo could cause, quote, consumer confusion. Winkleman's lawyer responded by saying this. I did try to explain with a great deal of candor to counsel for the North Face that the general public is aware of the difference between a face and a butt. Cheeky.

South Butt refused to budge, saying the tiny company posed no threat to the North Face Corporation. As the media began to cover the legal battle, it generated increased interest in the South Butt. Soon, its entire inventory was sold out. It was reported Winkleman was making over $100,000 a month at that point. The North Face again asked Winkleman to cease and desist.

The South Butt responded by launching a Facebook app that helped people see the difference between a face and a butt. The North Face then filed an 84-page federal lawsuit alleging trademark infringement. It said, saying, quote, The court ordered both sides to enter into mediation to resolve the conflict. But before that could take place, the two parties came to an amicable agreement on April 1st. The irony was inescapable. Regarding the agreement, the Denver Post reported that Winkleman promised to stop selling merchandise under the name The South Butt

and the North Face paid Winkleman a considerable amount of money to do so. Not long after, Winkleman created a brand new company called the Butt Face. The North Face again alleged Winkleman was in contempt of the settlement. Winkleman said the agreement stated he couldn't use the South Butt anymore, but nowhere did it say

he couldn't do another parody of the North Face. Conversely, the North Face argued the settlement agreement prohibited any other reproduction, counterfeit, copycat, or colorful imitation of the North Face trademarks. Eventually, Winkleman backed down. He was ordered to pay $65,000, although the amount dropped by $1,000 for every month he didn't violate the agreement. It was an interesting copycat case, because it raised two questions.

Does freedom of speech mean a young entrepreneur can make money peddling successive lines of parody clothing, and does an agreement to end the South Butt really mean you can never use the butt face? A popular burger chain that began in Southern California back in 1948 is called In-N-Out. It currently has nearly 400 locations across the U.S. Not long ago, it discovered a copycat brand operating in Australia. That burger chain was called Down and Out. In-N-Out alleged that Down and Out was mimicking its menu and its famous logo with the yellow arrow. The owners of Down and Out said that because In-N-Out

had no restaurants down under, there was no trademark to protect. In-N-Out responded by stating it had advertised in Australia since 2012 and has operated pop-up restaurants there. So, they went to court. When the federal court ruled, it sided with In-N-Out. Down-N-Out was ordered to hand over, within 60 days,

all material bearing the Down and Out logo, including signage, packaging, promotional items, advertising, brochures, pamphlets, merchandise, stationery, and business cards, and to cancel any domain names and social media accounts. Down and Out appealed the decision. It admitted it was inspired by In-N-Out, but that wasn't against the decision. It admitted it was inspired by In-N-Out,

but that wasn't against the law. And it maintained the judge had failed to place sufficient significance to the difference between the word in and the word down. Again, the appeal court sided with In-N-Out. The justice said the Australian company had, quote, sailed too close to the wind by crossing the line between inspiration and appropriation and sought to attract customers by having them wonder whether Down and Out was, indeed, in-and-out burger or perhaps a down-market or down-under version. Down and Out was finally down and out.

Can you guess what the best-selling cookie in the world is? Answer? Oreo. It is now sold in over 100 countries. Oreo was first produced in 1912 by the National Biscuit Company, now known as Nabisco. But did you know Oreos are a copycat product? Four years earlier, in 1908, another cookie was launched. It was two chocolate biscuits with a sweet vanilla cream in the center. That cookie was

called Hydrox. And it was the result of a rift between two brothers who ran rival bakery companies. Back in the 1890s, brothers Joseph and Jacob Luce opened a bakery together in Kansas City, Missouri. It was very successful, and Jacob, who had a knack for business, knew that in order to grow, they would have to merge with other bakeries. Through several acquisitions, Jacob created the American Biscuit and Manufacturing Company.

This new business was now the second largest bakery in the country at the time. For the next seven years, their company fought other big bakery corporations in what seemed like a race-to-the-bottom price war. It was grueling work, and the pressure and strain caused Jacob's health to suffer. To recuperate, he moved to Europe and his brother Joseph took over temporarily. Joseph believed the only way to win the price war was to merge with two other rival bakeries and create an even bigger company. Jacob disagreed strongly and wrote letters from his sickbed urging Joseph not to merge. But there wasn't much he could do from so far away.

So brother Joseph went ahead with the mergers and created the National Biscuit Company. Once Jacob recovered, he returned home and started his own company called the Sunshine Bakery. Ten years later, it was one of the largest bakeries in the nation, second only to his brother's company, Nabisco. Even though Jacob's bakery was smaller, it had a winning cookie the country loved. It was two beautifully embossed chocolate wafers with a sweet vanilla filling in the center. They called it Hydrox. While that name sounds more like a household cleanser today, that wasn't the case in 1908. Back in the early 1900s, people had become increasingly concerned about the purity of food. So the government cracked down and passed a food purity law.

The Sunshine Bakery always advertised that they used the highest quality ingredients. So when it came time to brand their new cookie, they wanted a name that suggested purity. And what was more pure than water? So they created a brand name from the words hydrogen and oxygen, the two chemicals that make up water. Hydrox. Four years later, rival Nabisco came out with a new cookie.

It was two beautifully embossed chocolate wafers with a sweet vanilla filling in the center. They called it Oreo and positioned it directly against Hydrox. Interestingly, the Oreo couldn't compete with the success of Hydrox. Oreo was priced cheaper and was considered a copycat cookie. Hydrox was the clear favorite of cookie lovers everywhere. The brothers battled it out until the early 1920s when they died one year apart. Jacob had the best-selling cookie. Joseph had the bigger company. Over the years, Nabisco grew to become a massive corporation with powerful

marketing and distribution departments. It decided to put millions of dollars behind the marketing of the Oreo. In the 1950s, Oreo was relaunched at a higher price point, which made Oreo seem like the premium choice. It's fun living on a ranch, but who's having the most fun? He's riding a pony, but they're eating Oreo cookies Delicious Oreo cream sandwich each Oreos really two cookies You know two chocolatey cookies with a luscious cream filling in between the most and the creamiest filling of all Oreo cream sandwich Hydrox battled back saying it was the original

Cream filled chocolate cookie this cookie is the original cream-filled chocolate cookie. This cookie is the perfect combination of delicious chocolate with just the right amount of vanilla filling. Do you know its name? Sunshine Hydrox? Which cookie is perfect as dessert or with your favorite desserts? Sunshine Hydrox. And which cookie is the original cream-filled chocolate cookie? Sunshine Hydrox.

Anybody knows that? It became a rivalry like Coke vs. Pepsi, the Beatles vs. the Stones. But Hydrox couldn't compete with Nabisco's marketing muscle. Soon, the cookie began losing market share, and the public began thinking that Hydrox was a generic Oreo knockoff, even though Hydrox was the original.

With sales continuing to fall, Hydrox cookies were finally pulled from the market in 2003. Twelve years later, a company called Leaf Brands decided to resuscitate Hydrox. And in 2015, original recipe Hydrox cookies reappeared on grocery store shelves. By that time, Oreo was generating sales of $660 million annually.

It was the best-selling cookie in the world and was marketed as milk's favorite cookie. But sure enough, the feud reignited. In 2018, Leaf Brands filed a complaint with the Federal Trade Commission accusing Oreo of sabotaging Hydrox cookies in grocery stores. Oreo, now owned by snack food giant Mondelēz,

has a direct-to-store distribution model where employees of Oreo stock the grocery store shelves themselves. Leaf Brands maintained Oreo employees were using that access to hide Hydrox cookies by blocking or moving them to undesirable shelf positions. Mondelez has denied the claim. Leaf Brands is seeking $800 million in damages. And that's the way the cookie crumbles.

Copycat brands always walk a razor's edge. While they hope to ride on the coattails of the original brand, they flirt with massive lawsuits at the same time. When it comes to trademarks, they have to be protected one country at a time. That sometimes opens up an opportunity for a copycat company to maintain a toehold in a country

where the original brand hasn't filed for protection yet. Then there's the gray area of parodies. The law does protect parody, but there is a fine line between lampooning and outright infringement. Jimmy Winkleman parodied the North Face, not once, but twice, but the courts didn't laugh either time. Yet Winkleman parodied the North Face, not once, but twice. But the courts didn't laugh either time. Yet Winkleman is undaunted. He went on to create OLOP, which is Polo spelled backwards.

It's a clothing line that lampoons Ralph Lauren's trademark. The logo features a horse with a polo mallet riding a human. Dumb Starbucks was the most brazen parody challenge. It didn't merely mimic Starbucks, it literally duplicated Starbucks. And did it publicly, daring Starbucks to retaliate while using comedy as a shield. But sometimes, a copycat brand can succeed. Oreo was a revenge cookie. One brother copied the other brother's cookie,

mid-feud, used marketing muscle to claim the number one spot, and managed to make Hydrox seem like the pale imitator. It's a dog-eat-dog world out there. All the rest of us can do is manage our cookie preferences when you're under the influence. I'm Terry O'Reilly. This episode was recorded in the Terrastream Airstream Mobile Recording Studio.

Producer, Debbie O'Reilly. Sound Engineer, Jeff Devine. Research, Patrick James Aslan. Under the influence theme by Ari Posner and Ian Lefevre. Tunes provided by APM Music. Follow me on social at Terry O'Influence. This podcast is powered by ACAST. And if you think there are too many ads in a show about advertising,

and you'd like to see those ads go down and out, you can listen ad-free on Amazon Music. And if you'd like to read next week's fun fact, just go to apostrophepodcasts.ca and follow the prompts. See you next week. Hi, this is Annie Kennedy from Coburg, Ontario. Fun fact,

Oreo produces 40 billion cookies every year. If stacked together, they would circle the earth five times.