QVC GC on NPEs, social media and more.
You've probably flipped around the channels late at night and come across QVC. Perhaps you were captivated by the shopping deals on the screen in front of you, or perhaps you wondered why people would shop from their TV when they have computers, tablets and smartphones. Well, QVC may have started as a television shopping channel, but it has expanded in recent years into many different channels -- and many different countries. InsideCounsel recently had a chance to speak to Larry Hayes, general counsel for QVC, about the challenges of that expansion, as well as other topics, including patent trolls and the rise of social media.
QVC started on television, but has expanded onto the Internet and now mobile and social platforms. "Each platform has independent challenges," says Hayes. "My team works with all the business areas to address the legal needs." These include advertising compliance, the challenges of disclosures on smaller devices, and the legal issues that arise from social platforms. The key, he says, is to work with the business unit and figure out a way for the sales teams to adopt legal disclosures to fit those needs.
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The challenges of social media are legion, but Hayes cites its real-time nature as being one aspect that causes disruption. "There's no time to huddle and decide how to do things in a methodical manner," he explains. "It's real time, so we have to monitor it closely." Branding and trust are very important to QVC, he says, so the goal is to provide customers what they want in a way that is real and consistent with the brand.
The company started in the U.S., but in the last 20+ years has expanded into Italy, Germany, the U.K., China and Japan, and will soon move into France. In these countries, Hayes says, the goal is to manage existing operations and expand the company's international presence. But there are legal challenges. "Things that are simple to implement in one country are tougher to implement across boundaries," he explains, citing laws in Germany, for example, that require a co-determination right when implementing a new HR system.
The legal department at QVC works with the business teams in each country, laying out strategies to use when entering markets. Television is highly regulated, after all, so QVC needs to obtain licenses and other qualifications. The legal team is integral to this important business process, laying the groundwork before the business unit dives in.
QVC has a large trademark portfolio to manage, and it must get ahead of the game in areas that are fertile for expansion. Hayes cites issues with individuals squatting on domains or trademarks as an example of challenges facing expansion.
Hayes is also acutely aware of the patent troll issue, as the retail sector is a big target for non-practicing entities (NPEs). He says that QVC has faced its share of cases over the years, and notes that recent Supreme Court decisions could make a difference in the way NPE cases are handled. "The big issue in the NPE area is that certain people know how to game the system. They realize it is expensive for companies to respond to these suits, and they price settlements close to what it would cost to defend them.... We need to look at the law and achieve balance."
Hayes says that we should be talking more about damages, as the damages that NPEs seek bear no resemblance to the value of their patents -- if those patents are even valid. "Is a consumer purchasing a product because of the functionality on a shopping cart? No, but the NPEs are pricing it as if they are. No business would pay those amounts if this was a commercial product," Hayes says. And he would know, after all.
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