The Mint suit against Diana Fund is reputational risk

If you had a choice, would you prefer to be known as the firm that borrowed Princess Diana’s image without getting permission or as the company that shut down her charities, depriving children with Aids of medical coverage and making sure the efforts to clean up landmines come to a screeching halt?

To most of us, the question is a no-brainer. But not for the folks at The Franklin Mint – they make those souvenir coins that are hawked on obscure cable channels in the early hours – who want to make the Diana, Princess of Wales Memorial Fund suffer for not wanting Diana’s image to appear on one of their trinkets.

The facts are simple. In 1998, The Mint – which is working with California-based crisis PR firm Sitrick and Company and last week hired the UK’s Bell Yard Communications (PRWeek, 18 July) – decided to create a limited-edition commemorative plate bearing the likeness of Diana. The Fund sued, accusing The Mint of unfair competition, false advertising and trademark dilution. But that suit was thrown out in 2000 by a US district judge, who said the Princess had done nothing to prevent others from using her image while she was alive.

After the suit was dismissed, The Mint filed its own $25m lawsuit accusing the Fund of acting maliciously, saying it wanted compensation for lost sales, tarnished reputation and the ‘embarrassment’ it suffered.

In response, the Fund froze its grants in order to protect its assets – a decision that will impact more than 100 charities, including HIV/ Aids groups and landmine clearance efforts.

The suit is problematic because The Mint must know that proving malice is almost impossible – it requires a jury to look into the defendant’s heart and believe there was no other conceivable motive for its actions.

It’s also the case that any embarrassment The Mint suffered as a result of the original suit pales into insignificance beside the damage this lawsuit may do to its reputation.

After the Fund announced it was suspending its grants, The Mint claimed its lawsuit ‘is most definitely not a matter of money’ and promised to donate any damages to charity.

If the company fails to win, it will never have to make good on that promise. Meanwhile, the Fund will be out hundreds of thousands of pounds in legal fees, and charities will be out a lot more than that.

Paul Holmes is editor of www.holmesreport.com

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