Thursday, January 8, 2009

For Sale: Our culture's collective soul

For Sale our Culture Collective soul

We all like deals and in fact the cheaper the more exciting the conquest. I am no different, but I would like you to give the following some thought the next time you decide that buying that pirated CD ect. from China, or pick up that little decorator do dad to hang on your wall, or clever little time saving device, (and by all mean do continue buying them without customers we have nothing), understand, someone has put their heart and soul into that piece, in an attempt to make your life easier, prettier and better. And it is hard work...none of us have a magic wand. Now turn over and see where it was produced. Then read this article from my business associate, Karla Buckley. And see if it doesn't change your perspective. It is time to value our cultural assets, our artists, engineers,inventors ect. We have become a get for next to nothing society, cheap fast and easy. There is a price...a huge price. And finally ask yourself how much are you willing to pay for the forfeiting of our collective cultural soul?

We have all heard about the huge piracy problem in China. One might think, "It's really not a big deal. China is just making copies of DVDs and software that big companies like Microsoft and Warner Bros. produce. Those big companies make enough money anyway." Unfortunately, not just large companies are affected. Small businesses are losing thousands of dollars as well.

Alma Lee Originals, Inc. is a small home-based business that creates artwork. The artwork is licensed to manufactures, who then produce art prints and home d├ęcor items. Alma Lee Originals, Inc. negotiates contracts, which give legal permission to these manufacturers allowing them to produce and distribute a specific number of items over a given period. The manufacturers agree to pay Alma Lee Originals, Inc. a royalty fee, which is a percentage of the sale on each item sold.

Many of the manufacturers contract with Chinese vendors to produce the product. Alma Lee typically sends the manufacturer a JPG file of the artwork and the manufacturer often sends the file to its Chinese vendor. Unfortunately, once the file is sent to China, the file runs the risk of being nationalized.

Alma Lee Originals, Inc. was recently the victim of such a theft. Alma Lee, the creator of a line of roosters, was shopping at Hobby Lobby and noticed a set of clocks featuring roosters from the Alma Lee collection. When she examined them closely, she also saw her signature. The back of the item was labeled with Hobby Lobby's copyright, but the artwork was clearly produced from Alma Lee files.

Hobby Lobby was contacted and made clear the fact that they were not responsible for the alleged copyright infringement. They did not design, develop, or manufacture the items. Hobby Lobby simply purchased the items from a third party vendor in the course of their normal business operations. Their vendor, manufacturer of the product, Fuzhou Profit International Trading Company was unresponsive to both phone calls and written responses. Alma Lee Originals, Inc. was left without recourse and was simply told by its art licensing agent, "As you know, it is very difficult and expensive to prosecute piracy cases in China. It is a huge problem."

The situation is disheartening. The Chinese manufacturer makes a profit by manufacturing and distributing Alma Lee's artwork. The U.S. retailer makes money by selling Alma Lee's artwork in its stores, while Alma Lee receives NOTHING. (Please note Hobby Lobby pulled the Alma Lee inventory from its shelves and is no longer doing business with Fuzhou Profit International Trading Company.) Alma Lee Originals, Inc. is a small business with limited resources and cannot afford a legal battle with the Chinese government.

The lesson learned is simple. The U.S. is part of a global marketplace. Since we are no longer a manufacturing society, our main commodity is our intellectual, trademarked and copyrighted property. We are giving away our competitive advantage, and run the risk of our property being taking over by the Chinese government every time a piece of intellectual property is sent to China.

Key Definitions:
• Licensing - legal permission to do or own a specified thing
• Nationalized – to be taken over by the government.
• Communism – collective ownership of property

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