Archive for the ‘Borders’ tag

What Does Sale of Borders Intellectual Property to Barnes & Noble Mean?

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According to Bloomberg Businessweek, Borders has gained final court approval for its $13.9 million intellectual property sale to former competitor Barnes & Noble.

Borders was once the second-largest bookstore chain after Barnes & Noble. So after being the first to pioneer the concept of a megastore, why did they fail? Quite simply, lack of technological curiosity killed the cat. With digital sales of books and music on the rise, and CD and DVD sales falling, Borders chose not to invest resources in developing digital sales. Instead, they outsourced digital operation to Amazon, while concentrating on improving brick and mortar stores.

Apparently, customers were not as enamored with the bookstore experience as Borders thought. Convenience and prices trumped cozy chairs and coffee, and many customers would instead use Borders to read a book excerpt, then go home and buy it on the cheap from Amazon. Then came e-readers. While Barnes & Noble produced the Nook as an answer to Amazon’s Kindle, Borders was struggling with insolvency, and unable to keep up with the changing marketplace and filed for Chapter 11 Bankruptcy last spring.

So what does this mean for Borders intellectual property? Barnes & Noble now hold the key to their trademarks, which includes Waldenbooks and Brentano. A quick visit to the Borders website reveals that Barnes & Noble is using the Borders name and e-commerce website, while proclaiming that Barnes & Noble will fulfill all orders. Upon research, Barnes & Noble lacks a physical presence in several large cities including San Francisco. It’s possible that they could use the Borders name to expand, but the future is still uncertain.

The biggest controversy surrounds the sale of approximately 48 million customers‘ information. Many Borders customers had signed on to an earlier agreement that their data would not be shared without their approval. The bankruptcy judge refused to approve the deal without giving the prior customers an opt-out option and Barnes & Noble fought it every step of the way.

On one hand, coming from an advertising background, I know that receiving a gargantuan list of people who are already known to buy books is an invaluable tool for Barnes & Noble’s marketing team. But with the now required opt-out option, one has to wonder if the information was worth the $13.9 million that was paid. It equals roughly $0.28 paid per customer, which is a steal in the marketing world. However, if a significant portion of customers opt-out to be included in Barnes & Noble’s e-mail list, that per customer number could go a lot higher.

The main issue is that the information could be sold without permission in the first place. For the average internet consumer, buying goods online doesn’t mean reading the fine print. I myself click accept without ever reading what I’m accepting. As a law student I should know better, but in today’s world it’s just not feasible to read a list that has a size 8 font, and goes on for 10 pages. Most companies say that they will never sell your information to a third-party, including Borders. So what do you do when it happens anyways?

Internet and privacy are areas of law that are still in infancy. It seems that this case is bringing to light how little control we actually have over our personal information once we transmit it to a company. The U.S. Federal Trade Commission submitted concerns to the court, as have 25 attorney generals. With more and more personal information being store by e-commerce companies, this controversy can only get bigger. How far can the sales of private consumer information go?

How do you feel about your personal information being bought and sold?