I had the opportunity to speak with Scott Jordan, the Technology Enabled Clothing entrepreneur who appeared on last Friday’s Shark Tank. This is the second in a series of three posts based on that discussion.
Scott Jordan’s plan is to license his patented Technology Enabled Clothing system- he would get money from clothing manufacturers who use his system. In explaining his idea of licensing TEC, Scott made an analogy to Gore Tex– the nearly ubiquitous waterproof outerwear fabric. Gore Tex is a privately held company that employs around 9500 people worldwide-200 of which work at the company HQ near Newark, Delaware. Gore Tex claims $3 Billion in annual sales- that’s BILLION with a “B!” While Gore Tex does sell its own line of outerwear, they license their technology to outerwear manufacturers world-wide; they make more money from licensing than they do from selling their own apparel. Licensing the technology comes with a commitment by licensees to uphold certain standards in their manufacturing processes, like using heavy-duty zippers, taping all seams, standards for stitching, etc. This keeps the value of the brand strong as Gore Tex is associated with quality standards. Even thought their patent is expired, the strength of the brand and the quality of the product have kept the business strong, profitable and innovative since Gore Tex was invented back in 1976. Scott envisions a similar type of licensing for his TEC– companies that incorporate the technology into their outerwear would need to adhere to similar quality standards and there would be an identifying TEC tag on all clothing using the technology. Based on Gore Tex’s numbers, the sharks really could have missed out on a billion dollar idea!
The validity of Scott’s business aside, he’s taking a lot of heat for his behavior on the show. People are saying he came off as a real jerk. When I said to him that he should expect people to come down hard on a lawyer, his response was an emphatic “absolutely right!” As a lawyer, he’s accepted the fact that not everyone will like him; after all lawyers are pretty easy fodder for jokes and ridicule and I certainly have poked fun at the profession in the past. Scott initially built his law practice as a legal malpractice attorney: he sued other lawyers for malpractice. That didn’t make him too popular amongst the brotherhood. His professional Life became so stressful, he went into the entrepreneurial game and came up with TEC. But he couldn’t shake the lawyer tag last Friday, which led to Cuban’s diatribe about “frivolous lawsuits.”
Actually, Scott Jordan has only taken adversarial legal action twice with regards to his clothing patents. In one case, there is a Chinese company that has completely ripped off his entire retail clothing line, name and all. This Chinese company is selling cheap knock offs of ScotteVests and even uses the same logo! Another example he gave me was a company was using a pocket system called the “George Pocket” Scott had patented. He became aware of the infringement and contacted the company, seeking to approach them as a licensing partner- a strategy he uses anytime he becomes aware of an infringement. So far, this strategy has been a success. In this case, he was completely ignored and the company continued to violate the patent and he was forced to sue.
Ironically, he’s been sued for copyright infringement in relation to the name “ScotteVest.” Scott,USA the ski gear maker, sued Scott Jordan for trademark infringement which resulted in a “gentlemanly” settlement and a redesign of the ScotteVest logo. IBM, in a rather heavy-handed lawsuit, sued him over the “e” symbol in the ScotteVest claiming the “e” would confuse consumers into thinking ScotteVest was somehow associated with IBM’s “eSolutions.” Now that’s a frivolous lawsuit.
Come back tomorrow for part three of The Shark Tank interview.
About Rob Merlino
Rob, do you work for Scott or something? I won’t get into the many reasons to be concerned about this article, but among other things, Scott said himself on the show that he has sued every major clothing company, and proceeded to list a bunch of big names (VF, Ralph lauren, etc.). So where is this whole “only sued twice” business coming from?
Please, don’t get sucked into this tractor-beam of BS!
No, I don’t work for Scott, I just got a bit peeved about how Cuban got on his high horse about the frivolity of Scott’s litigation. The business about the lawsuits was the nature of the adversarial process- did the lawsuit result in a court ordered settlement or a partnership? Filed lawsuits that end in a partnership I don’t view as an adversarial transaction. If you look at the TEC website, those companies he listed are currently licensing the product. As far as I am concerned, I don’t view it as a tractor beam of BS- it’s show biz.
Do you really think all those companies are paying him an ongoing royalty? Doesn’t pass the smell test and I’d bet not. Notice the very hesitant, nervous way he answered that question (after first trying to dodge it) on the show.
As for “Filed lawsuits that end in a partnership I don’t view as an adversarial transaction,” on the contrary, the “partnership” is one company being legally coerced into doing business with another. I’ve seen many of them and believe me, they are adversarial. They just have to act like they’re not. Do you think any of those companies consider Scott a “partner?” Pleeeeeease……
At the end of the day who cares if they consider Scott to be a partner or not….and who cares if they are paying him an ongoing royalty….bottom line is that Cuban called Scott a patent troll – here is the definition of patent troll on Wikipedia – “Patent troll is a pejorative term used for a person or company who buys and enforces patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to further develop, manufacture or market the patented invention.”
However – Scott has not only further developed, manufactured and marketed the patented invention – he has built an entire successful business and awareness in the marketplace around this type of clothing……….he did not just patent an idea and wait for someone else to develop it….bottom line is that the Sharks have never come up against someone the likes of Scott – someone that knows their business and knows if they are being lowballed – someone that knows more about patent law than Cuban (you know Cuban is a shrewd business man that would sue someone who – say printed a bunch of Dallas Mavs stuff and didn’t pay a royalty…..
JJ – what do you do for a living….ever gone out and staked your own claim? Ever take a risk and developo an idea to the extent that Jordan has? The Sharks clearly saw something to his product as they were trying to buy something that he wasn’t selling….put up $1 million on a product where they had not even discussed the name of the retail company……amazing!!! The licensing on this is clearly a huge opportunity…….watch….time will tell my friend…..
Well put. This whole Cuban/Jordan thing is getting bigger. Check out their exchanges on Twitter! I made the same Dallas Mavs analogy in the first post BTW.
We are heading back into the Shark Tank tomorrow! (Friday the 13th) Be sure to tune in, and check out the back story to the original episode here! http://www.scottevest.com/company/shark_tank.shtml
He didn’t come off like a jerk just because he’s an attorney. He cam off like that cos he’s a bad man. Why would you go on national TV to be stupid? And does Steve Woz really want to be associated with this person? I doubt it. Mark Cuban pegged this guy as a fool and that’s why he’s a multi multi millionaire. I am cheering for this person to fail in a big way!