A Huge Company Stole Our Greeting Card Ideas. A Sad Startup Lesson Learned

I am telling this story for several reasons. First and foremost I hope it will help startups to be more prepared when a giant company considers a buyout but instead steals their IP. At the New York greeting card show in the early 1980s, Hallmark (they had a 50% market share of all greeting cards sold) representatives came to our booth and took photographs of all of our greeting cards shown. Several years later they launched Shoebox Greetings using some of our words. There was nothing we could do as our lawyers said it would be a 15 year lawsuit and cost upwards of $1 million. Instead we sold our firm for a a pittance to Russ Berrie.

It didn't matter whether we had patents on words and designs. I don't know that that would have been possible if such a patent was possible or an NDA document had been signed before people came into our sales booth our lawyer said that wouldn't have made a difference. The power and size of Hallmark made protecting our creative words and designs impossible

Our card company was called Maineline (founded in 1979 by us in Rockport, Maine) and we were the first to create cards for women by women. We found a niche that was undeveloped and statistics showed that women purchased just about 80% of all greeting cards. Our cards focused on addressing the unique interests, emotions and experiences of women, making us a niche player in the greeting card market. By creating cards that specifically catered to women, Maineline Greeting Cards filled a gap in the market and provided a more personalized touch to its customers. We recognized the importance of catering to the interests and emotions of women and our cards celebrated and empowered them.

Just for your info the greeting card market is a $25-$35 billion market. Not small!

There are several factors that may contribute to women buying more greeting cards than men:
Women are often socialized to be more attentive to relationships, emotions, and communication. As a result, they might be more inclined to use greeting cards as a means to express their feelings and maintain connections with others.

Women may be more comfortable expressing their emotions than men, who are often socialized to be more stoic or reserved. Greeting cards provide a convenient and socially acceptable way for women to express their feelings and sentiments.

Women have traditionally taken on caregiving roles within families and social circles. Sending greeting cards can be seen as an extension of this role, as it is a way to show support, care, and encouragement to others.

Women, on average, tend to shop more frequently than men, which can result in a higher likelihood of purchasing greeting cards during shopping trips.

I asked several successful startup colleagues about their advice for protecting IP. Their responses:

Identify your IP: The first step in protecting your IP is to identify the types of IP your startup has. This may include patents, trademarks, copyrights, trade secrets, and other proprietary information.

Register IP rights: Register your patents, trademarks, and copyrights with the relevant authorities in your jurisdiction.

Implement non-disclosure agreements (NDAs): Require employees, contractors, consultants, and potential partners to sign NDAs to protect your trade secrets and confidential information.

Employee training and awareness: Regularly train your employees on the importance of IP protection and their role in safeguarding it. This includes providing guidelines on how to handle sensitive information and avoiding unintentional disclosures.

Monitor for infringement: Regularly monitor the market and your competitors to identify potential IP infringements.

Implement security measures: Use strong security protocols to protect your digital assets, such as encryption, secure access controls, and robust authentication methods. Keep physical IP documents in secure locations, with access limited to authorized personnel only.

IP strategy and management: Develop a comprehensive IP strategy that aligns with your business goals and objectives. This includes deciding what IP to protect, how to protect it, and when to enforce your rights.

Be mindful during collaborations: When collaborating with other companies or individuals, establish clear agreements outlining ownership of any resulting IP and the terms under which it may be used or shared.

I have been involved with several startup companies that created patents but in a surprising number of situations patents alone did not protect them from infringement.

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David Hoffman filmmaker