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June 2019
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Caterpillar Inc. Bullies Cat And Cloud Coffee Shop Over Its Store's Apparel

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One of the more frustrating aspects of the intersection of trademarks and business is how blind the law seems to be when it comes to recognizing the primary market in which a company operates. This is specifically an issue when it comes to merch and apparel, as many companies build up brand loyalty in their primary markets and then also move to sell clothing to those loyal fans. This all makes sense until these same companies get the USPTO to grant overly-broad trademarks for those ancillary markets, which are then used to bully smaller companies with the excuse being, "Hey, we have to protect our marks, or we lose them."A perfect example of this is the dispute currently going on between Caterpillar Inc., famed makers of tractor equipment and the like, and Cat & Cloud Coffee, which slings java.

The large corporation has trademarked "CAT" and has taken legal action against the small business to stop them from using it. Owners of the small business say they first received the letter in August of 2018."It seemed ridiculous. So, we responded and got a lawyer,obviously," said Jared Truby, co-owner of Cat and Cloud Coffee. "We asked them to further explain their case, asked them to drop it as we are in a completely different industry. They didn't want to, so we went back and forth a few times and called them out for bullying."Truby says when they opened the shop almost three years ago, they couldn't have predicted something like this happening."Could anybody imagine a $54 billion machinery company coming after a coffee company? I don't think that's even in the cards," said Truby. "The first biggest thing they want us to do is not print the name Cat and Cloud on anything again. I think that is unbelievable. I don't think that's going to hold up."
For its part, Caterpillar has pushed back on the outcry over this, pointing out that the only trademark it is disputing is Cat & Cloud's use of the word "cat" on merch and apparel, as Caterpillar sells an absolute ton of this stuff itself. It's an attempt at claiming its being reasonable, but it very much is not.First, a trademark on the the acronym "CAT" is plainly insane if it's going to be used against apparel that uses the word "cat." I would hope that is obvious to everyone. Such a generic trademark is simply not justified. On top of that, the coffee shop's use of the word is a reference to a literal cat. The CAT mark, on the other hand, is a reference to a caterpillar. So we're not even in the same taxonomic family. As you might expect, the branding on Cat & Cloud's apparel looks nothing like Caterpillar's.
It all kind of has that cutesy motif that is well suited for a coffee shop with a cute name and terribly suited if you're trying to fool the public into thinking you're a tractor company. Nobody looking at anything the shop sells on its site is going to somehow think Caterpillar is involved.Which doesn't mean the bullying won't work. As is always the case in situations like this, the expense to defend itself could force Cat & Cloud's hand.
"I guess the good news is if somebody is intimidated by our small little company in Santa Cruz, it means we're doing something right," said Truby. "It leads me to believe we're doing something that's far more important than I can see right now."Truby says they've spent nearly $10,000 already dealing with this case. He says not being able to sell apparel for extra income will have an impact on both employees and the business.
Here's hoping they get the support to stick this out. Or that someone at Catepillar gets a whiff of this and wants to craft a PR win for itself by ceasing this bullying behavior.

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New Study Shows That All This Ad Targeting Doesn't Work That Well

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Just a couple months ago, I wrote a post saying that for all the focus on "surveillance capitalism," and the claims that Facebook and Google need to suck up more and more data to better target ads, the secretive reality was that all of this ad this ad targeting doesn't really work, and it's mostly a scam pulled on advertisers to get them to pay higher rates for little actual return. And, now, a new study says that publishers, in particular, are seeing basically no extra revenue from heavily targeted ads, but some of the middlemen ad tech companies are making out like bandits. In other words, a lot of this is snake oil arbitrage. The WSJ has summarized the findings:

But in one of the first empirical studies of the impacts of behaviorally targeted advertising on online publishers' revenue, researchers at the University of Minnesota, University of California, Irvine, and Carnegie Mellon University suggest publishers only get about 4% more revenue for an ad impression that has a cookie enabled than for one that doesn't. The study tracked millions of ad transactions at a large U.S. media company over the course of one week.That modest gain for publishers stands in contrast to the vastly larger sums advertisers are willing to pay for behaviorally targeted ads. A 2009 study by Howard Beales, a professor at George Washington University School of Business and a former director of the Bureau of Consumer Protection at the Federal Trade Commission, found advertisers are willing to pay 2.68 times more for a behaviorally targeted ad than one that wasn't.Much of the premium likely is being eaten up by the so-called ad tech tax, the middlemen's fees that eat up 60 cents of every dollar spent on programmatic ads, according to marketing intelligence firm Warc.
As a site that relies on advertising to make money, this is hellishly frustrating. For years we've been pitching non-invasive, non-tracking ad campaigns for Techdirt. Over and over again we tell potential advertisers that people here would be much more open to paying attention to their ads if they promised not to do any tracking at all. And, over and over again companies (even those that initially express interest) decide to throw all their money at the big flashy adtech firms that promise to use "AI" and "machine learning" to better target their ads -- and get little in return for it.We still hope that sooner or later advertisers realize that they're getting scammed by the ad companies promising miracles in the form of tracking everything, and go back to recognizing that good, old fashioned, brand advertising works well without the need for invasive, intrusive surveillance.

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