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Competition Arrives to Social Enterprise

February 7, 2011

 

The conversation about legal issues faced by social enterprises has largely centered around legal structure: what corporate clothing a venture should don at the outset of its existence.  But there are many other legal issues SEs will face, and these will become more sophisticated as the field of social enterprise expands and matures.  This occurred to me recently when I stepped into a Skechers store at the mall.

I came across what appeared to be nothing short of a intentionally obvious copycat line of shoes created to mimic Tom’s Shoes.  The not-so-subtle name: Bob’s.  I asked the sales representative and she explained that these were just like Tom’s shoes, except that Skechers donates two pairs of shoes to children in need for each pair purchased by a customer.  What’s more, Bob’s shoes were less expensive than Tom’s by two dollars.  What surprised me most about Skechers’ one-upsmanship of Tom’s was not the stark similarity between Tom’s shoes and Bob’s shoes, but the fact that Skechers is now competing with Tom’s Shoes on charitability.  The reason to buy Bob’s rather than Tom’s, evidently, is that Bob’s have a greater positive social impact.

Consumers may have mixed feelings about the knockoffs, as one loyal Tom’s Shoes customer expressed in this blog post.  In the for-profit world of footwear, such an obvious imitation by a competing company might spur an intellectual property lawsuit (meritorious or not) alleging patent or trademark infringement.  But what happens when social enterprises encounter similar imitations of their products?  While it does not appear that Bob’s Shoes is at any imminent risk of being sued, this is unlikely to be the last time social enterprise encounters competition.

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