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Regional Report Triad May 2011


Lorillard treasures its measure of ‘pleasure’

Miller Brewing Co. tried in the ’80s and lost. So did developer-turned-reality television star Donald Trump in 2004. Now Greensboro-based Lorillard Inc. is sparring with Winston-Salem competitor R.J. Reynolds Tobacco Co. over whether a company can commandeer an everyday word or phrase for its exclusive use in advertising. The word is “pleasure.” Resolving the issue likely will mean lots of pain for the North Carolina Business Court in Greensboro, where Lorillard’s trademark-infringement lawsuit and Reynolds’ countersuit await hearings.

“It’s going to be a tough one,” says Charles Lankau, a professor of business law, communication and negotiation in Wake Forest University’s business school. Lorillard registered “Pleasure!” in 2005 as a trademark for its Newport cigarette brand, and Reynolds registered the word two years later as part of several phrases, including “Revolution in Pleasure,” to promote its snuff. In 2009, after an initial litigation skirmish, the companies agreed that Reynolds could use “pleasure” as part of a sentence in its advertising but couldn’t highlight it.

Lorillard contends Reynolds is violating the agreement by, among other things, using the word in some of its Internet domain names. A Lorillard spokesman declined comment. Reynolds spokesman David Howard says Lorillard is, simply put, full of snuff. “We will vigorously defend against Lorillard’s claim and prosecute Reynolds’ claim because we believe Reynolds’ use of ‘pleasure’ has always been lawful.”

The tiff illustrates how zealously companies protect brand identities, even hijacking common words. After the success of Miller Lite, Miller Brewing ­— now MillerCoors LLC — tried in 1985 to stop others from calling their beers “light.” No deal, the U.S. Supreme Court ruled. Upon the popularity of The Apprentice, Trump tried to copyright “you’re fired” to block T-shirt hawkers and others from using it. “Unfortunately, that’s something people are told every day at work, so the court determined it was simply two common words,” Lankau says. “You can’t own it.”

The flip side is that companies can see their brands slip away. Kleenex, a Kimberly-Clark Corp. brand, is so widely used in place of “tissue” that some dictionaries include it in the definition of that word. Aspirin once was a brand name. “You can have a trademark that’s so good that you lose it,” says Roger Beahm, a marketing professor at Wake. A key decision for the court, he says, is whether Lorillard’s use of the word is so tied to the brand that it suggests the brand. Folgers coffee, for example, used “mountain grown” so much it suggested the brand and was given a trademark.

Trademark lawsuits can serve a purpose other than settling legal questions — even if they don’t succeed, Lankau says. “You might make the other company more careful next time.”

HAMPTONVILLE  Lydall, a maker of heat and noise shields for automobiles, plans to add 170 jobs within three years at its factory here and its distribution center in Yadkinville, increasing its Yadkin County workforce to about 670.
LEXINGTONUnited Furniture Industries, an Okalona, Miss.-based maker of upholstery for residential furniture, plans to add at least 75 employees by the end of the year, giving it 350 here. That’s 200 more than it agreed to when it opened the factory last year.

HIGH POINT — Brian Casey resigned as CEO of the High Point Market Authority, which runs two furniture markets annually. Casey, who had held the position since 2006, is taking a job as general manager of the Cleveland Medical Mart & Convention Center.
HIGH POINTPaul Brayton Designs will add 100 jobs this year, bringing employment to 112. The company will design high-end European and American furniture for the contract and hospitality markets.
WINSTON-SALEM — Apparel maker Hanesbrands will reopen a distribution center it closed last year. The center will remain open at least three years, starting this month. It will employ 60, compared with the 240 who worked there when it closed.
WINSTON-SALEM BB&T received permission from the Federal Reserve to increase its dividend from 15 to 16 cents per share after passing a second financial stress test. It also won approval for a special 1-cent dividend in the second quarter.
WINSTON-SALEM  Reynolds American says 46 of the 1,400 manufacturing workers in its hometown accepted voluntary buyouts. All will leave the company within a year. The company does not plan layoffs.  
After a two-year rebranding study, Wake Forest University Baptist Medical Center in Winston-Salem dropped the “University” from its name. The change, including consultant fees, will cost $3.5 million.

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