World Intellectual Property Organization

The Mug FactoryTM Innovation with Focus

Make no mistake coffee mugs are big business. Wherever there is big business and big money, there is innovation. And there is none more innovative than The Mug Factory, located in Queensland's Gold Coast and brainchild of Michael Beverley.

Two years ago, Michael noticed that the humble coffee mug was, in fact, not so humble at all, but one of the most popular gift items in the world market. Especially when emblazoned with the latest in movies, famous personalities, cartoon characters, prime-time TV programmes, and other hot imagery.

"The key to a mug's success," says Michael, "is not what the consumer is going to put inside it, but what the consumer sees on the outside when it's sitting on the shop shelf. Like a lot of very popular gift products these day, coffee mugs are really just extremely successful vehicles for licensed imagery."

Known as licensed properties, this imagery is bought for a set time and price from the license holders, such as Warner Bros, Walt Disney & Company, and Gaffney International.

"This is a multi-billion dollar industry for the simple reason that people all over the world will often choose a product decorated with licensed imagery instead of one without it," says Michael. "As long as it's popular, the imagery could just as easily come direct from Hollywood, like Star Wars, or originate from Australia, like Bananas in Pajamas."

So when Michael decided to do mugs, he decided to produce the best damn coffee mugs you could find and carve out his share in this enormous market. To do this, he went about mastering low-heat transfer technology; already an important step away from the way most mugs are currently produced.

"Traditionally, an expensive decal is applied and then fired on at extremely high temperatures in giant kilns. The whole process means that your average mug is made with a lot of effort and a lot of cost. And amazingly, this does not necessarily result in the best looking mug," says Michael.

Michael's aim was to produce mugs that looked alive with colour and imagery, and were cheaper to produce in capital costs and labour. His Living PictureTM process is an incredible mix of cutting edge innovation with low-tech production, so that one person can produce a high volume of mugs per day.

For Michael, the entire Living PictureTM process represents significant and valuable intellectual property. His trade secrets are carefully documented so that Michael can eventually sell or license the Living PictureTM process to another party, but are also guarded from exploitation through confidentiality agreements and employee secrecy agreements.

Living PictureTM - a trade mark registered with the Trade Mark Office of IP Australia - is now a well-known brand in the licensing industry. Michael expects that consumers will come to recognise it as well.

"Just like low-heat transfer technology, I can't say that I knew much about intellectual property or ways to protect it when I first started out. But IP issues are an essential aspect to the business I am in," says Michael.

Within a very short time, Michael's innovative approach has paid off. Living PictureTM mugs carry the most popular of licensed properties - Star Wars, Elvis, and Star Trek to name a few - and are distributed around Australia by one of the country's largest gift wholesalers, Crystal Craft.

There are immediate plans to use the Living PictureTM process to do justice to a range of all Australian imagery. With stunning colours and striking graphics, expect this range of mugs to jump out at you at a shop nearby.

This case study has been compiled by IP Australia

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