Live to Ride, Ride to Live by Nonda Stamatakis

It’s, a story no one on earth could have made up. Four young men experiment with internal combustion in a tiny wooden shed. Not only does the shed not burn down, but, the motorcycle they build goes on to serve for over 100,000 miles, under five owners. And that’s just the beginning. [1]

This paper will investigate the area of intellectual property relating to the Harley Davidson Motor Company. After a brief introduction into the business, attention will be drawn towards the firm’s legal dealings regarding intellectual property. Moreover it will detail the commercial aspect and the value derived from the said intellectual property.

Background

Founded in 1903, Harley Davidson manufactures motorcycles in the United States of America. The motorbikes were different in style sound and performance from the outset. The machines were utilized in competition racing as well as having served in active duty in both WWI and WWII. Harley Davidson motorcycles have also been supplied to Police forces around the world. These include the Los Angeles Police department, the Chicago Police department and the Iowa State Patrol, etc. By 1920 HD (Harley Davidson) became the largest motorcycle manufacturer in the world. Unlike other Japanese manufacturers, HD could not sustain operations and nearly went bankrupt on a few occasions.

With the introduction of the “Fat Boy” model in 1990, HD once again led the industry in sales in the heavy weight division, which is over 750 cc. [2]

An urban legend quickly spread that the Fat Boy model received its name from the atom bombs “Fat Man” and “Little Boy” which were dropped on Nagasaki and Hiroshima respectively in WWII by the American B-29 bomber. [3]

Harley Davidson has also become synonymous with outlaw motorcycle gangs, i.e. Hells Angels. The company’s reputation was also somewhat tarnished with the cinematic release of outlaw motorbike gang movies in the 1950’s through to the 1970’s which followed the biker gang riots at Hollister, USA, in 1947, for example, “Easy Rider”, an American classic road movie written by Peter Fonda in 1969. It starred Dennis Hopper, Terry Southern, Jack Nicholson and Peter Fonda. This was a story about two bikers travelling through the American South and Southwest.

Company financials

Harley Davidson Inc. has been a successful Fortune 500 company for many years. It had revenue of $US5.34billion and a net income of $US959.6million in 2005 whilst shipping over 329,000 new Harley Davidson motorcycles in 60 different countries to its dealerships. The company employs more than 9600 worldwide employees.[4] The Harley Davidson logo was, in itself, licensed for over US$41 million (2004) or about 5% of the organizations total revenue.

The product

Harley Davidson motorcycles have V-twin engines with two-cylinders and pistons mounted in a 45° “V” shape. The pistons fire at uneven intervals because of this design. This choppy “potato-potato” sounding V-twin engine design is covered under several United States patents.

The organization produces much more than highway style road bikes. HD has taken full advantage of their key asset, which is their brand name, and commercialized that asset to receive revenues from non-motorcycle sales.

Below is an example, although but a fraction, of what HD has taken to market through its strong branding.

Trade Mark No. 607418 Date Expires: 3 October 2013 Classes: Class 9 Eyeglasses; sunglasses; goggles; protective helmets; motorcycle electrical parts and gauges namely, radios, speedometers, tachometers, batteries, wiring, cruise controls, switches, breaker points, turn signals, terminals, starters, circuit breakers, thermostats, battery chargers, armatures, voltage regulators; recorded and blank video tapes and discs, audio and video equipment, television sets, stereo equipment, pre-recorded and blank audio tapes and discs, juke boxes, disc players, recorded computer software, automatic slot machines and pinball machines. Trade Mark No. 607419 Date Expires: 3 October 2013 Classes: Class 12 Motor cycles, motorcycle engines and parts and accessories therefore not included in other classes; horns Trade Mark No. 607420 Date Expires: 3 October 2013 Classes: Class 14 Jewellery, ankle bracelets, bracelets, earrings, necklaces, tie tacks, ornamental lapel pins, stick pins, clocks, watches, rings, charms, key fobs, belt buckles of precious metal, watchbands, money clips, collar tips, boot chains, hat pins, pewter plates, figures of precious metal. Trade Mark No. 607421 Date Expires: 3 October 2013 Classes: Class 16 stationery, books, bumper stickers, chequebook covers, playing cards, calendars, decalcomanias, photo albums, posters, printed publications and printed matter road atlases, service manuals for motorcycles, parts catalogues for motorcycles, accessory catalogues and lists, instruction books and handbooks, greeting cards, banners relating to motorcycling, note paper, pens and pencils, paper hats, paper table covers, paper napkins, photographs, pictures, bags of paper or plastic for wrapping and packing, tattoos (removable) and decals. Trade Mark No. 607422 Date Expires: 3 October 2013 Classes: Class 18 Saddlery, purses, wallets, backpacks, duffel bags, motorcycle saddlebags, key fobs and key holders made of leather, garment bags, key cases, suitcases, tote bags, briefcases, attaché cases, chequebook clutches, luggage, travel bags; leather beverage container holders; handbags, hip bags, haversacks, satchels, rucksacks, umbrellas and parasols, valises, trunks, pouches and note pad holders made of leather. Trade Mark No. 607423 Date Expires: 3 October 2013 Classes: Class 25 Outer clothing, sweaters, suspenders, scarves, bandannas, jackets, coats, vests, gloves, jeans, chaps, shirts, shorts, caps, hats, headgear for wear, knit hats, rain hats, belts, wristbands, coveralls, hosiery, halter tops, neckties, nightgowns, night shirts, pyjamas, pants, rain suits, rain coats, shirts, sweatshirts, sweat pants, tank tops, T-shirts, underwear, suits, head bands, leg warmers, aprons, mittens, lingerie, leather clothing, swimsuits, skirts, bibs; footwear, namely shoes and boots, and parts of footwear, namely boot tips, sole plates, heel guards. Trade Mark No. 607424 Date Expires: 3 October 2013 Classes: Class 26 Ornament for hair and clothing not of precious metal, belt buckles not of precious metal, embroidery, buttons, slide fasteners, pins other than jewellery, badges, medallions, embroidered patches, decorative boot straps.Source: Trade Mark Notice: Under Section 137 of the Trade Marks Act 2002

Sound trademark

At the start of 1994, HD applied for a sound trademark for its distinctive engine sound. “The mark consists of the exhaust sound of applicant’s motorcycles, produced by V-twin, common crankpin motorcycle engines when the goods are in use”. Nine of HD’s competitors, including Kawasaki, Yamaha, Suzuki and Honda, as well as American manufacturer Polaris, filed oppositions against the application. They argued that basically all single-crankpin V-twin engine cruiser-style motorcycles produce a similar sound. Litigation soon followed the objections. The Company finally decided to drop its federal trademark registration in August 2001. Legal counsel for HD claims that their client still holds sound trademark rights even without registration. [5] Bob Starr, the Yamaha spokesman said, “Yamaha has been building V-twin engines since the early ’80s, and there’s no difference between the sound their engine makes and the sound our engine makes. . . . All V-twins, by their nature, have two pistons. The pistons go up and down, and they all sound the same.” [6]

The following are some examples of companies that successfully registered sound trademarks:

v MGM – Lion roar (US Reg No 7,3555,319)

v Twentieth Century Fox – drum roll (US Reg No 7,4639,776)

v New York Stock Exchange – sound of its closing bell (“a brass bell tuned to the pitch D… struck nine times at a brisk tempo”)

v Intel – ‘five-tone’ sound registered in US, Australia and New Zealand

v Time Warner – Looney Tunes Theme Song (US Reg No 7,6051,811)

v Nokia – default ringtone (US Reg No 3,288,274).

v Edgar Rice Burroughs, Inc.- the “Tarzan yell” (US Reg. No 2,210,506)

v AT&T – spoken letters AT&T

v US broadcaster NBC – sound of the chime used to identify a station break (1971, US Reg. No 0916552)[7]

Only about 23 of more than 729,000 trademarks in the United States of America are sounds. Only 71 applications have been lodged to register sounds as trademarks or service marks. Harley Davidson has over 5,000 trademark applications and registrations worldwide. Harley Davidson, Harley, the bar and shield design and Hog are the key marks of the company.

Harley Davidson submitted three of its motorcycle models to the US Patent and Trademark Office for “trade dress” intellectual property protection. The Sportster, the Electra Glide and the Heritage Softail are those three in questions.

This has an enormous impact on other motorcycle manufacturers as well as on manufacturers for aftermarket motorcycle parts as they would violate copyright laws if any of their products resemble the layout or design of HD’s above-mentioned motorcycles. This would eliminate competition, especially to suppliers of aftermarket motorcycle parts as customers would only have the option of purchasing parts directly from HD, or their distributors, at a premium price. [8]

Steve Piehl, HD’s PR manager said, “It has long been a routine practice for businesses to register patents and trademarks to protect assets they have developed . . . Thus, we have applied with the U.S. Patent & Trademark Office for the registration of the configurations of our Sportster, Heritage Softail Classic and Electra Glide models as well as our FL front fender. While we welcome competition in the motorcycle market, our message to the other motorcycle and parts manufacturers is clear: “we respect your trademarks and expect that you will respect ours.'” “Applying for and registering trademarks does not necessarily imply legal action”. “Most often, once a trademark registration is granted, it is respected by legitimate business concerns and legal action is rarely required.” [9]

Some legal case examples

On the 3rd of March 2004, In an APEC Senior Officials’ Meeting regarding intellectual property held in Santiago, Chile, it was said that counterfeits of motorcycle were appearing and that infringements against design as opposed to trademark are becoming mainstream. [10]

In 2005, Harley Davidson brought a lawsuit against S&S cycles regarding the alleged infringement of Harley Davidson patents and trademarks. This was brought in front of the federal court in Wisconsin’s Eastern District. The portion of the lawsuit that pertains to patient infringement claims that S&S is marketing twin-cam engine parts that infringe on HD’s intellectual property. Brett Smith, S&S president said, “We do not understand why after all this time Harley-Davidson is raising these claims. Whatever the reason, this lawsuit will not affect our continued commitment to be the premier provider of proven performance components to the V-twin aftermarket.” [11]

In June 2007, Harley Davidson Inc. commenced proceeding against Chrome Horse Motorcycles Beijing, China, for trademark infringement. HD’s Vice-President and Chief Trademark Counsel Linda Heban said, the decision by the Chinese court has once again proved that the Chinese government is keeping its promise in intellectual property protection. [12]

In January 15th 2009, The United States court of appeals had stopped a motorcycle service business called “The Hog Farm” which was using HD’s bar and shield design. Moreover they also concluded that the word “hog” was generic to large motorcycles therefore HD could not remove the name from public domain. [13]

Conclusion

Harley Davidson has definitely derived maximum value out of its intellectual property and is an example of an organization that has diversified its commercial scope to include accessories that promote its core business, namely manufacturing and selling classically styled motorcycles at a premium price, the world over.

This paper is not an exhaustive study of the motorcycle industry or that of its intellectual property but an attempt to promote further research within the realm of intellectual property protection and its presence and necessity in the ever growing and lucrative business of motorcycles. The author is somewhat biased as he himself sets fire to the tires occasionally.

You’ve got to ride to live, live to ride

Feel the flames burn inside

And though you know you ride to hide

You ride to live to ride.

Twisted Sister – Ride to live, live to ride