Monday, August 27, 2012

Universities Acting Like BAD Businesses - Again

One of the recurrent themes here has been the intersection between universities and business. While many faculty friends of mine over the years have claimed that universities are not businesses, I beg to differ. Universities are businesses, they are just rather odd ones.

Acknowledging that universities are indeed businesses doesn't excuse them from behaving badly. In writing on the UVa flap over the firing and subsequent re-hiring of Teresa Sullivan, I argued that the lesson wasn't that universities shouldn't act like businesses - it's that they shouldn't act like bad or stupid ones.

Today we are treated to a new story, published in the Chronicle, about yet another university going off the rails when it comes to business practices. This one involves the University of Alabama, which reported threatened legal action against a small-town bakery for making cookies and cakes featuring the university's "Crimson Tide" elephant and other Alabama-themed icons.

The threatening letter in question actually came from the Collegiate Licensing Company, a corporation hired by UA and some 200 other colleges and universities to represent the university on trademark issues and manage its licensing deals. The letter was a standard "cease-and-desist" type: stop making the cookies, or pay the university the mandated licensing fee.

The baker, Mary Cesar of Mary's Cakes and Pastries in Northport, Ala., has become an instant hometown hero. Hers being a small business, she doesn't have the money for the licensing fees, and lots of people have flocked to her defense. In the current economy, the "big, bad corporation vs. the small main-street business" narrative is easy to construct. After coming under a hail of PR gunfire for a few days, the university instructed its reps to back off.

Those paying close attention will note that this isn't the first flap the Crimson Tide has gotten itself into over trademarks. Earlier this summer, a federal appeals court ruled in favor of an artist who had been painting scenes of Alabama football. The university tried to argue that the uniforms and logos in the paintings were protected trademarks, for which they deserved royalties. The court agreed with the artist that the works were protected by the First Amendment as artistic expression. No word yet as to whether cookies count as art (how good are they?), but the university lost $2 million fighting that earlier case - not a sound business decision.

The problem here is not that the university, in the cookie case, is technically wrong - this is the kind of legal action that corporations take all the time to protect their trademarks, and it's entirely possible that if this case were to go to court, the university would win. The problem isn't even that it makes the university look politically tone-deaf, although it does. The administration can't hide behind having hired an outside company - those are your reps, you hired them, you have to keep them on an appropriately-lengthed leash. The political damage in this case is probably containable, and won't last forever. But it was stupid and entirely avoidable, and makes them look (for a little while) like fools.

The real problem is that the university has misunderstood the nature of the trademarks it "owns". The fact that the "Crimson Tide" elephant, colors, UA logos and the rest are popular is the direct result of having been given both subsidies and (far more importantly) the imprimatur of the state. UA is the "flagship" state school, bearing the state's name. The university didn't create that, it was handed to them - by the state government, on behalf of the people of Alabama - on a silver platter.

So for UA (or its hired guns) to go out and claim that these are somehow "their" trademarks is absurd. Their popularity, as well as their very existence, comes directly as a gift from the people of Alabama. Big private corporations like Apple and Disney did create their own trademarks, and the value underlying them. UA did not, and therein lies the difference. One would imagine that sooner or later, the leaders of Alabama's flagship public institution will figure that out.

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