Print 52 comment(s) - last by ShadowZERO.. on Apr 23 at 3:36 PM

Alright, what smart Monster Cable employee decided to initiate a fight with a small company headed by a skilled lawyer?

Monster Cable, known for its pricey boutique cables, which it markets to the audiophile community is no stranger to controversy.  The cable company markets the cables as having superior quality sound, but according to one infamous study "audio aficionados" supposedly were unable to tell the difference in sound between short monster cables and a short metal coat hanger forged into a crude connecter

While its merits are debatable, one hard fact is that Monster Cable has a penchant for agressive litigation.  It has sent letters accusing everyone from Monster Energy Drinks to Monsters Inc., the Disney/Pixar movie, of trademark infringement.  However, some its legal assaults are industry specific as well.  However, it appears it may have finally met its match in one small company, Blue Jeans Cable.

Monster Cable accused Blue Jeans Cable of ripping off its cable designs for Blue Jeans'  Tartan line of RCA-style cables.  Monster Cable sent Blue Jeans a cease-and-desist letter demanding it to suspend production.  Unfortunately for Monster Cable, Blue Jean's president, Kurt Denke was a skilled lawyer.

He sent a whopper of a response back to Monster Cable, dripping in detail, sarcasm, and legitimate demands that is sure to have Monster Cable's legal team sweating.

Denke states:
 Let me begin by stating, without equivocation, that I have no interest whatsoever in infringing upon any intellectual property belonging to Monster Cable. Indeed, the less my customers think my products resemble Monster's, in form or in function, the better ... If there is more than one such connector design in actual use by Monster Cable as to which appropriation of trade dress is alleged, of course, I will require this information for each and every such design. On the basis of what I have seen, both in the USPTO documents you have sent and the actual appearance of Monster Cable connectors which I have observed in use in commerce, it does not appear to me that Monster Cable is in a position to advance a nonfrivolous claim for infringement of these marks.
I will also point out to you that if you do choose to undertake litigation, your "upside" is tremendously limited.  If you somehow managed, despite the formidable obstacles in your way, to obtain a finding of infringement, and if you were successful at recovering a large licensing fee--say, ten cents per connector--as the measure of damages, your recovery to date would not reach four figures.  On the downside, I will advance defenses which, if successful, will substantially undermine your future efforts to use these patents and marks to threaten others with these types of actions; as you are of course aware, it is easier today for your competitors to use collateral estoppel offensively than it ever has been before.  Also, there is little doubt that making baseless claims of trade dress infringement and design patent infringement is an improper business tactic, which can give rise to unfair competition claims, and for a company of Monster's size, potential antitrust violations with treble damages and attorneys' fees.
The lengthy full letter that is released here raises many good points.  Monster Cable's claims are tenuous at best as many of its patents fall under products where there was significant prior art.  For a company with more junk legal threats than the Church of Scientology, there is a "boy who cried wolf" aura to the suit.

Nonetheless it would be unsurprising to see a lesser small-company bow down and kowtow to Monster Cable, fearful of the larger company's resources.  However, like any bully it appears Monster Cable has finally met its match.

I'm no lawyer, and this is not a legal opinion, Monster Cable could turn out to have legitimate gripes, but as I said their claims seem pretty tenuous and reek of just another chapter in this era of junk litigation.

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RE: The whole letter is a good read
By phxfreddy on 4/18/2008 5:33:09 AM , Rating: 2
......and BestBuy must get a percentage so their partially in on the gag.

RE: The whole letter is a good read
By JB1592 on 4/20/2008 11:26:48 PM , Rating: 4
Of course they get a percentage. Retail stores don't operate for free. They make a percentage on everything they sell. It's called a profit margin. Retail mark up.

Generally speaking, margins are usually very low on end product and very high on accessories. That's why sales people are trained to push as many cables and adapters and converters and what have you with every sale as they can.

For example, they are probably only making a couple hundred on that $1500 TV they just sold you... but they're making another $40 on that $50 cable they attached to it. What you're seeing another $50 on top of $1500 they see as a profit increase of maybe around 20%.

I used to a work for a retailer that sold several forms of cable. Interesting things to know: The regular nickel plated store brand cables were generally more expensive for the store to buy than the the gold plated ones. I have no idea why, but they were. If I had to guess I'd say the warehouse was charging a higher margin on the nickel plated ones (many chain stores these days have a two tiered profit system where the company has already made a little money on the product by the time it reaches the store because the company warehouse that the store must order from charges a small profit over what the company actually pays for the item). More interesting, the Monster brand cables may have retailed for 3 times what the store brand did, but they only cost another dollar or two for the store cost. It went something like this:

Store brand nickel plated: Store cost $6.50, retail $15.00
Store brand gold plated: Store cost $6.00, retail $20.00
Monster brand cables: Store cost $8.00, retail $60.00

It was something very nearly those numbers anyway. I don't remember exact prices, I know they weren't even dollar amount like that. The rough numbers are about right though. Point is: A) profit margins on cables are HUGE, B) profit margins on Monster cables are REALLY HUGE. That is why nearly every major chain store carries them these days. Monster does massive amounts of advertising for you, provides a really flashy packaging and sets an MSRP that allows you to have a 700% mark up. If you were a corporate retailer, why would you not drink that Kool Aid?

Some things are more complicated. For example, cell phones typically cost retailers hundreds more than they sell them for... but they get a few hundred in "ring credit" when they sign you up for a contract (or renew your existing one). In the end though, in one way or another, any time you by ANYTHING the retailer "gets a percentage."

By woofersus on 4/21/2008 1:57:17 PM , Rating: 2
Similar story: I used to work at a Sam Ash music, and we carried a number of brands of cable. In the home recording market, much like the audiophile market, people tend to get caught up in gear snobbery and assume everything has to be expensive. Of course there are some people who just have no clue whatsoever, but I've seen some pretty knowledgeable people fall into the trap and pay ridiculous amounts for cable

We carried proco "excelines" cables, which are reasonably good quality, and reasonably priced as well. ProCo is the parent company that owns Monster Cable (came in the same box!) and the store cost to us was almost identical between them. The markup on the proco branded cables was 35-45 points, while the markup on the Monster branded cables was between 75 and 85 points.

I avoided selling them, because I thought it was a total ripoff, and I could usually just sell them two proco branded cables for the same price and get the same commission. (in pro audio you can never have too many cables)

It seems so obvious to me that no matter how many obscure differences they can list in the copper they use, the weakest link will always determine the quality of the cable. (cut it in one place only and see how well it works) The weakest link is always the solder joint. Unscrew the ends and look. It's the same stuff. Probably 60% lead or so. There may be some crazy high end boutique cable maker out there that uses all silver solder or something like that, but monster isn't it. Even the interference rejection claims are ridiculous. The principles of wound cabling are pretty simple, and if you have interference concerns, run all balanced analog or go digital. No cable will prevent interference if have 50' of cable running parallel with power lines.

All that being said, I hate junk litigation. I'll probably buy some Blue Jeans Cables now instead of making my own just to support them.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007
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