Lollar lawsuit

[8mileshigher]

There is always the alternative of a Licensing Agreement and Royalties payments.... because legal defense costs and time involvement have monetary values that a business has to consider. Seems to me, from reading lots of issues of Vintage Guitar magazine, that there were several guitar makers in the 1930s who licensed the Horseshoes from Electro-Rickenbacker.

[jps]

Seems to me, from reading lots of issues of Vintage Guitar magazine, that there were several guitar makers in the 1930s who licensed the Horseshoes from Electro-Rickenbacker.

Did they license the design and build their own, or did they buy pickups from Rickenbacker?

[8mileshigher]

Did they license the design and build their own, or did they buy pickups from Rickenbacker?

Jeff, I don't know the answer on that. My recollection is seeing pictures of Kay and a couple of other brands who utilized Horseshoe pickups (for both Hawaiian guitars and Spanish guitars) and I seem to recall some reference in an article, to licensing.

[antipodean]

“[…] the Supreme Court in TrafFix Devices, Inc. v. Marketing Displays, Inc. 3 held that a feature is functional when it is essential to the use or purpose of the article or if it affects the cost or quality of the article. 4 Further, when the product feature was the subject of an expired utility patent, there is a strong evidentiary inference of functionality, and the patent owner bears the burden of showing that such a feature was not a useful part of the invention, but was instead arbitrary, incidental or ornamental.”

The appearance of horseshoes pickup which RIC have trademarked, is not a functionless ornament designed with the only purpose of identify RIC as its origin. The whole appearance of this pickup came from its functional design.

I follow this argument, but there is a counter-argument based on the fact that the shape and/or composition of the magnet is not vital to the functionality of the pickup, where functionality is defined as the ability of the pickup to transform string vibration into usable alternating current. There is a multiplicity of possible configurations that will enable a pickup to function and produce a particular tone (as evidenced by the plethora of aftermarket pickups). Thus, it can be argued that the shape and appearance of the magnet is incidental to the functionality of the pickup.

On another tack, I would note that the design (and appearance) of the horseshoe is unique and iconic, and is strongly (almost exclusively) associated with Rickenbacker, given that the firm (under various names) created and featured such pickups on its instruments for over thirty years. One could thus argue that the appearance of the horseshoe pickup is as much deserving of trademark protection as the shape of the TRC or 4000 series bass headstock.

Please note that I'm actually a bit conflicted here as I have a Lollar pickup on one of my basses and prefer it to the original RIHS. I have had a little contact with Lollar and have found everyone there to be extremely helpful and professional in dealing with customers. I think that they believe that they are acting in their customer's interests in providing the product. I have, however, become convinced by various arguments in this thread that the product infringes upon RIC's trademark.

[antipodean]

Did they license the design and build their own, or did they buy pickups from Rickenbacker?

Jeff, I don't know the answer on that. My recollection is seeing pictures of Kay and a couple of other brands who utilized Horseshoe pickups (for both Hawaiian guitars and Spanish guitars) and I seem to recall some reference in an article, to licensing.

Apparently BF Meissner made and supplied HS pickups to various guitar builders in the '30s before Rickenbacker enforced its patent.

[bluewhale]

Parts of this discussion reminded me of a previous thread asking how the horseshoe was chosen for the original 4000 bass. No definitive answer, but I think some good stuff here:

viewtopic.php?f=2&t=395263


bluewhale

[Wiker]

[...] Seems to me, from reading lots of issues of Vintage Guitar magazine, that there were several guitar makers in the 1930s who licensed the Horseshoes from Electro-Rickenbacker.

when Rickenbacker still held a patent on it, but patents doesn’t last forever.

[Wiker]

I follow this argument, but there is a counter-argument based on the fact that the shape and/or composition of the magnet is not vital to the functionality of the pickup, where functionality is defined as the ability of the pickup to transform string vibration into usable alternating current. There is a multiplicity of possible configurations that will enable a pickup to function and produce a particular tone (as evidenced by the plethora of aftermarket pickups). Thus, it can be argued that the shape and appearance of the magnet is incidental to the functionality of the pickup.

Then it can be argued that:
The horseshoe shaped magnets are vital functional parts of the pickup, so should not be protected by trademark. The rectangular shape undisputable is the most cost effective way of making these magnets, and should not be protected by trademark. The only argument I can see that might be valid is to alter the dimensions of magnets, but that will also alter the magnetic field.
Saleability of the pickup is also of concern as altering shape and dimension would make it unattractive (as Rickenbacker bass owners are the main market for this pickup), but I’m not sure how far that argument can be stretched.

It’s important to keep in mind that function of a trademark is and should be only to establish its source of origin, not to hinder competition.

On another tack, I would note that the design (and appearance) of the horseshoe is unique and iconic, and is strongly (almost exclusively) associated with Rickenbacker, given that the firm (under various names) created and featured such pickups on its instruments for over thirty years. One could thus argue that the appearance of the horseshoe pickup is as much deserving of trademark protection as the shape of the TRC or 4000 series bass headstock.

That is an argument I almost agree with that. When you see a bass with the unique Rickenbacker headstock shape you would believe it to be a Rickenbacker. Even it had a different body you could believe that unless you’re completely familiar with the Rickenbacker product catalogue. Same goes for the body shape.
I walk into a shop and see a bass with the familiar Rickenbacker body shape, but it has a Fender headstock shape. Unless I’m familiar with the product range and I know that such a bass does not exist, the body shape alone can surely lead me to believe it is a Rickenbacker.
I.e. the headstock shape and body shape alone are (trade)marks that can identify a bass’s origin, and can mislead a customer if those marks are misused by others.

It can be argued, but I don’t believe the same is true for the horseshoe pickup. If I walk into a store and see any kind of bass with such a pickup, the pickup itself wouldn’t make me believe it’s a Rickenbacker bass.

On the other hand, the pickup itself as a separate product. ??? I don’t know. Does it really have such a strong visual appearance (to other than us that are into Rickenbackers)?

Please note that I'm actually a bit conflicted here as I have a Lollar pickup on one of my basses and prefer it to the original RIHS. I have had a little contact with Lollar and have found everyone there to be extremely helpful and professional in dealing with customers. I think that they believe that they are acting in their customer's interests in providing the product. I have, however, become convinced by various arguments in this thread that the product infringes upon RIC's trademark.

I have two horseshoe pickups from Lollar, and I’m grateful to Lollar for sticking his head out and making these. It’s a completely different pickup from the RIHS. As I’m very pleased with the pickups from Lollar I’m not neutral to the subject, but I’m in no conflicted about it.

Had RIC been making these pickups I probably would have bought a genuine RIC horseshoe pickup instead (unless of course the Lollar pickup was significantly better quality). And, had RIC been making these pickups then Lollar probably wouldn’t anyway so.
A trademark is not there to stop others from making and selling anything, it’s there to identify who has made it.


But now I’m tired of all this legal stuff. Will be interesting to see how this suit ends.

[8mileshigher]

But now I’m tired of all this legal stuff. Will be interesting to see how this suit ends.

Looking at this from a strictly business viewpoint, there is the possibility that this will end in a Licensing Agreement and possibly Royalties payments, because, there are just not enough dollars involved in aftermarket replacement Horseshoes to justify anybody (like a small manufacturer) to wade very deeply into the waters of the very expensive American legal system no matter how “right” any party may perceive the merits of their legal position to be. Or how justified the “cause” would be to litigate.

By his own admission, Lollar has seen approx. 100 Horseshoes go through his shop over the years. [Mar 4, 2013 http://music-electronics-forum.com/t32315/] If that defines the market for re-winds/repairs, would it be reasonable to assume he might have manufactured a guesstimate of say, no more than 100 more units in the time-span of his manufacturing operation, (started in approx 2005) before they received the cease and desist letter ?

Lollar sold the pickups for $450. If we use the analysis put forward by a couple of Forum members, that magnetic shoes alone cost $120; let’s assume for arguments sake that the total materials cost is under $200 per unit, and allowing for additional administrative, financial and entrepreneurial costs for each unit, it would probably be fair to guesstimate the total cost figure at $200 per unit. If Lollar possibly sold 100 units over the time span, at $450, with $200 in costs, their margin (gross profit) was approx $250,000 prior to taxes (and that amount is over eight years).

So the supposition is, what business person would spend any dollars to litigate the uncontested Trademark that the Patent and Trademark Office already approved; (even for those who have emotional attachments to the “functionality” argument) for the sake of this limited market-base as estimated above, (approx $250,000 over eight years which works out to $31,000 per year) ? One could easily rack up $40,000 in attorneys bills very quickly for even the simplest responses and filings which obviously would exceed the annual-dollars involved…. and the burden of proof is on Lollar. And any prolonged litigation involving discovery and research will go into the six-digits attorneys costs before you know it.

And the other aspect of the dollar-value hypothesis is that, if Lollar rewired/repaired 100 units as he estimates and if we calculate he may have possibly sold another 100 new manufactured Horseshoes ---- that’s 200 units that will probably last another 40 or 50 years based upon Lollar’s reputation for good quality. It is a very limited market to begin with and those first 200 customers will not likely be purchasing another Horseshoe unit in their lifetime. Thus, how many more Horseshoes can possibly be sold over the next 20 years, to justify Lollar (or anyone sympathetic) spending any money on litigation ?? Basic economics would lead the cost-conscious, business-person to be seeking a resolution to this quickly….. because, like it or not, that is how the system works.

And if the quantity Lollar manufactured exceeded the estimate of 100 used in this hypothesis, that would only add to the economic justification for Rickenbacker to seek redress for the approved Trademarks they hold.

[Colonel Sanders]

But now I’m tired of all this legal stuff. Will be interesting to see how this suit ends.

Looking at this from a strictly business viewpoint, there is the possibility that this will end in a Licensing Agreement and possibly Royalties payments, because, there are just not enough dollars involved in aftermarket replacement Horseshoes to justify anybody (like a small manufacturer) to wade very deeply into the waters of the very expensive American legal system no matter how “right” any party may perceive the merits of their legal position to be. Or how justified the “cause” would be to litigate.

By his own admission, Lollar has seen approx. 100 Horseshoes go through his shop over the years. [Mar 4, 2013 http://music-electronics-forum.com/t32315/] If that defines the market for re-winds/repairs, would it be reasonable to assume he might have manufactured a guesstimate of say, no more than 100 more units in the time-span of his manufacturing operation, (started in approx 2005) before they received the cease and desist letter ?

Lollar sold the pickups for $450. If we use the analysis put forward by a couple of Forum members, that magnetic shoes alone cost $120; let’s assume for arguments sake that the total materials cost is under $200 per unit, and allowing for additional administrative, financial and entrepreneurial costs for each unit, it would probably be fair to guesstimate the total cost figure at $200 per unit. If Lollar possibly sold 100 units over the time span, at $450, with $200 in costs, their margin (gross profit) was approx $250,000 prior to taxes (and that amount is over eight years).

So the supposition is, what business person would spend any dollars to litigate the uncontested Trademark that the Patent and Trademark Office already approved; (even for those who have emotional attachments to the “functionality” argument) for the sake of this limited market-base as estimated above, (approx $250,000 over eight years which works out to $31,000 per year) ? One could easily rack up $40,000 in attorneys bills very quickly for even the simplest responses and filings which obviously would exceed the annual-dollars involved…. and the burden of proof is on Lollar. And any prolonged litigation involving discovery and research will go into the six-digits attorneys costs before you know it.

And the other aspect of the dollar-value hypothesis is that, if Lollar rewired/repaired 100 units as he estimates and if we calculate he may have possibly sold another 100 new manufactured Horseshoes ---- that’s 200 units that will probably last another 40 or 50 years based upon Lollar’s reputation for good quality. It is a very limited market to begin with and those first 200 customers will not likely be purchasing another Horseshoe unit in their lifetime. Thus, how many more Horseshoes can possibly be sold over the next 20 years, to justify Lollar (or anyone sympathetic) spending any money on litigation ?? Basic economics would lead the cost-conscious, business-person to be seeking a resolution to this quickly….. because, like it or not, that is how the system works.

And if the quantity Lollar manufactured exceeded the estimate of 100 used in this hypothesis, that would only add to the economic justification for Rickenbacker to seek redress for the approved Trademarks they hold.

Wouldn't his gross margin be $25 000 instead of $250 000? (100 x 250).

Lollar probably did not choose to make a Horseshoe reproduction to make a fortune...

[bitzerguy]

Yup, I get $25,000.

[8mileshigher]

Wouldn't his gross margin be $25 000 instead of $250 000? (100 x 250).
Lollar probably did not choose to make a Horseshoe reproduction to make a fortune...

Yup, I get $25,000.

Yeah --- decimal points
The lower the dollars on the income side make the legal cost hurdles, that much more formidable.

[deaconblues]

I mean, not only that but you're pretty much making a shot-in-the-dark guess at what the cost per pickup is.

[Colonel Sanders]

I mean, not only that but you're pretty much making a shot-in-the-dark guess at what the cost per pickup is.

Whatever his cost is, the market is so ridiculously small that I really do not see him choose to build horseshoe to become richer.

[daveman]

We've previously stated that when this market is fully "cleaned up" we will produce true horseshoe pickups again and our intent hasn't changed. It's only the infringements and attendant legal requirements associated with that which has delayed our program.

Having read through this entire thread... I still don't understand the delay. (Nor do I want to be killed if you explain it to me!) There is a market for this design - probably small, but enough to have drawn someone else in to manufacture a substitute. I will grant that you have the stronger legal argument; and I've always admired Ric for the way it's protected its marks. But won't you agree that the company has an obligation - perhaps only moral - to satisfy this demand, if you will not allow others to do so?