How to Keep those Customers Coming Back: Patents in a Consumer World

Amanda Carpenter is a JD Candidate at Osgoode Hall Law School.

In a recent Journal of Intellectual Property Law and Practice article, Jeremy Phillips writes about how a ‘repeat order’ is one of the most sought after goals in business, which signals that the business has done something right. A ‘repeat order’ is defined as when a consumer, having previously purchased a product or service, returns for more of the same product or advises a friend to do so. In Intellectual Property Law, the ‘repeat order’ is seen as a consequence of the establishment of a successful brand, such as Nike.

Jeremy Phillips then challenges the idea that the establishment of a successful brand name is enough. This is because the consumer seeks the same qualities of the product that he or she originally bought into when they come back, not just the brand name. If another competitor offers a product or service with the same qualities that attracted them to the original brand, but perhaps with a lower price, they may prefer the rival’s product. Reflecting on my own personal consumer tastes, he seems to have this right. Although one might give leeway to their favourite brand if its products start to lose the qualities that originally led one to become loyal to it, this would not likely continue for long until one has found a rival that has the qualities that the original brand has lost. For how long will one continue to buy a pair of brand name jeans that used to fit well, but cuts in the cost of manufacture have meant that the original quality of perfect fit is no longer present?

The author also writes that although the recession has affected fickle consumer tastes and thus some brands have lost their lustre (particularly those with higher prices), some brands remain popular, among which he lists Google and Apple. According to the idea established in the previous paragraph that returning customers return for more than just simply the brand name, it seems that to me for Google and Apple to remain this popular among consumers, their products must have retained the qualities that originally attracted consumers to them and the products of other rivals must lack these same qualities. So what are the specific qualities in regards to the products or processes of Google and Apple that has produced such loyalty?

Why do I use Google? When I say use Google, I am specifically referring to the use of the Google search engine, although Google does create other things like Google Maps and Google Wave. I use the Google search engine because as a process to surf the web it is fast, free, and easy to use. Even more, in the words of one of its founders it “understands exactly what you mean and gives you back exactly what you want.” How has this search engine retained the quality of always giving me back the pages I want, and why hasn’t the search engine of a rival taken its place? The answer is that Google has patented the core feature that makes their product special: the PageRank algorithm. The trademark PageRank algorithm used by the Google search engine assigns a numerical weighting to each element of a hyperlinked set of documents with the purpose of “measuring” its relative importance within that set. To do this it interprets a link from page A to page B as a vote, by page A, for page B. Votes cast by pages that are themselves “important” weigh more heavily and help to make other pages “important”. With PageRank, and other technologies that Google uses, such as Hypertext-Matching Analysis, Google is able to always produce relevant and reliable pages first. Since it is patented, the competition cannot use it, and thus consumers have remained loyal to Google.

Then what is it that makes Apple products such as the iPod and iPhone so special? Apple has patented various aspects of their products, such as rotational user inputs for scrolling through lists of items (ie: the little click wheel in the middle of an iPod). However, beyond this important role of patents in their products it also seems their product’s special quality of looking slick attracts consumers. For example, there are many other products that perform the same functions as the iPod, but their appearance hasn’t been designed to look equally cool. Apple products also function well – for example, Mac OS X crashes less than Windows Vista. In other words, although intellectual property law plays a role in the success of Apple products, it may not play such a pivotal role as in the case of Google, where there is no other search engine that matches the performance of the Google search engine because the algorithms they use can’t match Google’s patented PageRank algorithm. This is because Apple’s success may hinge on other things, such as marketing and visual appeal.

In conclusion, sometimes businesses will need to have recourse to Intellectual Property law to ensure that their product or process will continue to have loyalty from consumers. That is, in order to stay ahead of the competition, a patent must be obtained to protect the qualities that make their product special, as in the case of Google.