Just in time for Christmas, a little company called The South Butt, started by 18-year-old James Winkelmann as a way to pay for college, got the news that The North Face filed suit against them. Since then, Winkelmann and The South Butt have embarked on a journey that small businesses have experienced before.
In a capitalist economy under leaders that want to encourage the growth of small businesses, The North Face, whose website calls itself a “$7 billion powerhouse,” seeks damages from The South Butt for trademark infringement.
The incident started when Winkelmann applied to get a U.S. trademark registration for The South Butt, and subsequently received a letter from The North Face asking him to withdraw. Winkelmann made an offer to The North Face, saying he would sell his business for $1 million. He later withdrew this offer after sales of The South Butt products increased as a result of media attention and decided to fight to maintain his business.
“It was a joke… I didn’t really believe in [my product] at first, but after I got all the media popularity there were just so many people out there that loved the idea,” Winkelmann said. “Now I think that maybe it can be a real brand.”
Winkelmann and The South Butt’s defense attorney, Al Watkins, described the situation as a friction between a small company trying to succeed in a capitalist system.
“This is about freedom in the marketplace, and it’s about a young man’s freedom to pursue the American Dream,” Watkins said in a news interview.
Sophomore business student Ryan Matis agrees. “Putting The South Butt into bankruptcy is the point of this case. The North Face knows they will not win, but it is probably in their best interest to sue and overwhelm the small company with legal fees so The South Butt has to settle the case,” Matis said.
However, The North Face has attempted to make clear that this is not the David vs. Goliath situation that some may take it to be. The North Face’s official statement says, “It’s also important to maintain integrity and strong ethics in any business endeavor – such as the creation of a unique logo and brand identity…. Like thousands of companies around the world, we work diligently to protect trademark rights.”
The North Face was unavailable for any further comment. However, their official compliant states that The South Butt is “the latest in a long line of such opportunists” seeking to “pirate its famous trademarks for their inferior knockoffs.”
It seems that The North Face is prepared to fight against others business’s opportunity to compete in the market. But The North Face’s claims against The South Butt say that the Defendants (Winkelmann, The South Butt, and Williams Pharmacies – where The South Butt products are sold) have willfully and intentionally attempted to deceive consumers by infringing their trademarks. The complaint states that The South Butt logo and products are causing “post-sale confusion, mistake and deception” among consumers, to which Watkins continually replies, “I think people know the difference between a face and a butt.”
Through this confident front, Winkelmann tries to be realistic.
“If I lost, I guess they’d be entitled to all those damages that they explained,” he said. The damages explained in The North Face’s compliant have all the potential of running The South Butt out of business.