The Economics of Brand Protection
A Tale of Two Universities
The University of Cincinnati (UC) sent a cease-and-desist letter to Cheatham Middle School in Tennessee over their Bearcat mascot. Routine trademark enforcement has evolved into an unexpected lesson in strategic brand management. This incident, involving UC and its crosstown rival Xavier University, offers insights into the economics of intellectual property rights and competitive strategy.
The Trademark Dispute
UC, through its licensing agency Collegiate Licensing Company (CLC), demanded Cheatham Middle School stop using the Bearcat mascot and logo. The school district, faced with limited resources, chose to comply rather than engage in a legal battle. What happened next transformed a standard legal procedure into a fascinating case study in competitive strategy.
Xavier's Market Response
Enter Xavier University with a masterclass in strategic marketing. Through its marketing partner Synergistic, Xavier offered its Musketeer mascot to the middle school free of charge. This wasn't just goodwill—it was strategic positioning at its finest. As any sports fan knows, the UC-Xavier rivalry runs deep, and this move added a new chapter to their competitive history.
The Economics
Brand Protection's Hidden Costs The paradox of trademark enforcement played out here. While UC had clear legal grounds to protect its intellectual property, the enforcement action may have damaged its brand equity. Think about it like calling the police on a kid's lemonade stand - legally correct, but not great for community relations.
Principal-Agent Problems in Practice The UC-CLC relationship highlights a classic economic problem we often discuss in class. When you hire someone to protect your brand (the agent), their actions might not always align with your broader institutional interests (the principal). Sometimes, strict enforcement can work against the very brand value you're trying to protect.
Strategic Opportunity in Market Competition Xavier's response was Competition Strategy 101 in action. They spotted an opportunity in their competitor's defensive move and transformed it into offensive marketing. By offering their mascot freely, they demonstrated how understanding competitor behavior creates opportunities for brand enhancement.
The Takeaway
The key lesson? Legal rights and optimal business strategy don't always align. UC's technically correct but arguably heavy-handed approach opened a door that Xavier skillfully walked through. This case reminds us that in business, having the right to do something doesn't always mean it's the right thing to do.
This incident will likely become a staple in business school discussions about brand management and competitive strategy. It shows how seemingly routine decisions about intellectual property can have broader implications for brand value and market positioning.
What are your thoughts on how UC could have handled this differently? I would love to hear your perspective in the comments.
Best,
Dr. A
Strategic allocation of scarce resources. This is an excellent example of it.
That's brilliant on Xavier's part. Copyright protection is critical, but that middle school is not making a material impact on UC's brand or depriving UC of revenue. That was a bad move on their part.