04/ 02/ 2008
by by Geoff Williams
In school, you could hunker over your paper and shield it from prying eyes. But it's not that easy in the business world.
If imitation is supposed to be the most sincere form of flattery, Ben Chestnut would appreciate some insults. When the competition began shadowing MailChimp.com, Chestnut, unlike his business partner, was almost pleased. After all, it demonstrated that the Atlanta-based e-mail marketing services provider was doing something right. But the novelty wore off, especially after MailChimp offered potential customers a free 30-day trial, and another competitor then promised 60 days.
"At first, we gave them the benefit of the doubt, thinking that maybe it was just a coincidence," Chestnut says. But his attitude changed after he installed a live chat system that allowed the company to see the IP addresses of MailChimp's visitors. "We could flat out see that our competitors were visiting our Web site--a lot," he says.
To keep the copycats at bay, Chestnut recently hired a patent attorney before unveiling MailChimp's latest feature.
Dale Eisenberg and Mike Ventre, owners of Chicago-based 2Toots Train Whistle Grill are franchising their business as a proactive defense against copycats. Last year, the partners noticed they weren't the only locomotive-loving eatery around and that their signature neon-colored plastic whistles delivered to customers with their desserts was not so original anymore. "In one case, a supplier told me that another restaurant owner had actually admitted to copying us," Eisenberg says. "I have no issue with fair competition, but at some point it crosses the line."
Taking legal action against imitating enterprises is an option, but Eisenberg warns that it will mostly be your word against theirs without proper documentation, like dated marketing materials and news coverage. "You must clearly create a timeline of events that can pinpoint your beginning and that of your copycat," he says.
Chestnut is actually sympathetic with his nemeses--to a point. "In the early days, I did the same thing," he confesses. "You have to do competitive research, but there was a point when I was so obsessed with it that we were building features that people didn't use. When that happens, you're not listening to your customers. You're just competing with your competitors."
NFIB.com
Learn more about protecting your business from copycats in the "Legal Issues" section of www.NFIB.com/toolsandtips.
This article is from the April/May 2008 issue of MyBusiness.
