Online reputation is a critical factor for companies’ business success online as well as offline. Large social networks, more and more blogs, and a plethora of comparison portals attract users to consult them in their decision making. If these sites portray a company in a negative way, the damage done to their reputation will affect their overall business success. The management of German clothing company Jack Wolfskin knows how that mechanism works. In hindsight, they could do without that particular experience.
The company uses a wolf's paw as a visual logo. They hold copyright protection for the exclusive use of it. While that is sensible to guard against the wolfs in business (howling from China), it can backfire quite spectacularly if applied in the wrong situation at the wrong time.
Jack Wolfskin’s management felt that the company’s reputation and legal rights were threatened by a handful of homeworkers. These hobby designers had made use of a paw in their homemade products and offered some items for sale on a selling platform for homemade and handmade products. In Germany, DaWanda.de is such an online marketplace for self-made goods offered by amateurs. Homemade goods (sewn, knitted, concocted, or constructed) are offered for sale on that site by housewives, students, and grannies. DaWanda.de offers a platform and sales opportunity for amateur designers and Nano sized companies. And now a handful of them had integrated a generic paw into their designs.
Jack Wolfskin’s management felt so threatened by a jumper and a pair of socks, they decided to let full weight of their lawyers lose to deal with the issue; a management decision that was correct in its legality and amounted to suicide as far as its reputation was concerned.
In such cases, instead of having to file a lawsuit, German law allows a company (or an individual at that) to send a letter to cease and desist to a real or perceived perpetrator against its right or copyrights. The letters to several DaWanda.de users stated that the use of a paw was the sole right of Jack Wolfskin's and that they should desist from using it in future and remove it from any goods they held in stock. While annoying for the vendors, and ridiculous in its heavy-handedness, this was not the real problem.
The same German law allows a company to ask for money from any recipient of such a letter for expenses incurred. There are no clear guidelines and limits as to how high these costs are, but they are never based on reality. The DaWanda.de users were asked to pay 1,000 Euros (1,400 Dollars; 900 Pounds Sterling) each within three weeks to Jack Wolfskin’s lawyers. To the recipients, this felt like being fined without legal proceedings. The real cost of such a letter including a secretary's time may be estimated to be around 20 Euros (28 Dollars; 18 Pounds Sterling).
Imagine a granny selling a couple of hand knitted jumpers receiving such a letter. With luck, she would earn 100 Euros in a full year with the small stuff she was selling through DaWanda.de. Recipients were not the China or Hong Kong based government companies swamping the world with their 'legal' copies; these were amateurs selling a few items a year for the odd Euro to add to their pension or pocket money. Most of them faced instant financial ruin. Instead of hanging their heads, they banded together and made Jack Wolfskin’s claims public by using the Internet. It took very little time for their online disclosure to mutate into 'The Affair Jack Wolfskin'.
The story was taken up by bloggers who in turn took it to social networks. Within two days, the sorry affair was on German TV; the next day, it was in newspapers across Germany, Austria, and Switzerland. The negative impact on Jack Wolfskin’s reputation was instant and enormous. It had taken three days to convert a paw of quality into the paw of oppression.
The heavy handed approach of its lawyers had damaged the company’s reputation to the point where it had to react. The management had to withdraw all legal threats and proceedings; it had to issue a statement that they were satisfied if the products showing a paw would be withdrawn and the perpetrators would desist in future of using it. It was all very public and a great humiliation for the company’s management. But damage to the reputation had been done, and it will remain present in online archives, blogs, and social media platforms. The web never really forgets.
In hindsight it is easy to say, but Jack Wolfskin could have sent a simple letter or e-mail to the perpetrators first; its name alone combined with a threat of future legal action would have carried enough weight with these amateurs to desist from using the paw. The management had used cannons to shoot at sparrows, and the smell of gunpowder will stick to its name for some time to come. It will take years for the company to repair the damage to its reputation and the damage has to be expressed in millions of Euros: All that over a knitted jumper and a pair of socks made by a granny.
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