1553: Client Case Study, Russ Munson & Apple Patent Trademark Trolling

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1553. 1553. We've got a guest today, one of our clients actually, who's going to talk a little bit about his real estate investing experience, but also he's going to talk about something interesting and it is another form of this abuse and bullying by big Tech. I tell you folks, you might think, why is Jason talking about this so much on a real estate investing personal finance show? Because it is important. This is like one of the major issues of our time when we search for something with a company that controls somewhere around 70% or more. With YouTube, I'm talking about Google, of course, of the world's search traffic, we never know what we don't see in those search results. When we log on to Facebook, we never know what doesn't show up in our news feed. You can't hear the dogs that don't bark. This is a big deal. Now this example today is an example of trademark trolling. Well, you be the judge. I don't know, that's my opinion. I could be wrong. But you're going to hear a pretty harrowing story here from one of our clients. And also he's going to talk a little bit about his investments and how it made it possible for him to start his company and, and gain financial freedom by starting to invest in properties with us. Maybe, I don't remember, but maybe nine, 10 years ago, something like that. So he'll tell the story in just a moment, but before that, you know, I think a lot of people are making a huge mistake out there and I'm hoping I can save you from it. Now listen, I am looking for this deal too. We are in a pandemic and everybody is out there thinking, well, not everybody. I say that figuratively, of course, it's a figure of speech. But many people are out There thinking, well, there's going to be a market crash, the economy is in trouble. Yes, you are right. But this is very uneven what's going on in the world right now. And a lot of apartment owners and other investors are talking about this phenomenon. Look on the screen. Apartment rent collections continue to decline. And that is true. But the question, remember, you listeners and viewers and followers have called it, I didn't name it this. You've called it the Jason Hartman question. I'm flattered. I love it. I'll take it. I'll take it for sure. That question is if you're a regular follower, you know, compared to what? Compared to what? We have to realize first that no apartment owner, no real estate investor ever collects 100% of their rents. It just doesn't happen. They have economic vacancy and they have physical vacancy. Now physical vacancy is of course, when the property's vacant and no one's paying you rent. Economic vacancy is when the property is occupied and they're not paying rent and you gotta kick them out. Right. But there's been so much talk and concern about the eviction moratoriums and all that stuff and you know, the forbearance and you know, the owner generally just passes it along to the lender. Right. But folks, you got to realize something. This issue is largely an issue of larger, mostly institutional apartment investors. Now I've owned a couple large apartment complexes, 139 units, 125 units. I've got a mobile home park now that's 120 units. And we're building some single family homes on that land on the park because we've got some waterfront area there where we're not going to have mobile homes. We're going to have single family homes and we're going to sell those but retain the land lease. So interesting stuff you can do. So I'm in this world and I know lots of people who are. I just interviewed the founder of a very large apartment investment company and they do some, they play in some other asset classes as well, self storage, et cetera. And they do business in seven states. And we went into this in depth. You'll hear that episode. Folks, if you're looking for this big crash in the housing market, I don't think you're going to find it. And if you do, if you do, it will be a result of much higher interest rates. And I want you to realize something so you don't miss the opportunity because many, many millions of people have missed great opportunities. Now most people aren't Missing the opportunity right now. And maybe it's an anomaly. Maybe the skeptics and the doomsayers, the people that have been calling the end of the world for the last 20, 30 years, you know that bad news sells, right? Maybe they'll say, well, Jason, it's just an anomaly what's going on right now. Yes, there's a housing boom. Yes, prices are rising, but it ain't going to last. Maybe they'll be right. Maybe. But will they be right based on the price of the property or the cost of ownership? And those two things are significantly different. Just want to remind you that people buy a property based on the payment, based on the mortgage payment. Almost nobody buys it on the price of the property. And based on the mortgage payment, housing in the markets we like now this is not true of all markets, is actually cheaper today than it was in 2006. In terms of a monthly payment, the price is higher. Yes, that is true. And you see all these people that have a shallow understanding of the market, the talking heads on cnbc. Now, I don't mean to pick on cnbc, they got some great coverage on a lot of things, but any news station, any major media outlet, where they've got to condense things into a small sound bite where they don't look at issues deeply and they don't have a deep understanding, but they'll say things like, well, if you look at housing prices in 2006 at the prior peak, and they differ on when the peak was fine and dandy, depending on what market you're looking at, what sub market, what price range, blah, blah, blah. You can peel that onion a lot of ways, but they say housing prices are higher now than they were then. And look what happened then. We had a big crash. Okay, well, what's the monthly cost of ownership? You never bother to consider that, do you? Right. And that's the true cost of housing. That's the true price of housing is the monthly cost, not the overall cost. Also, they never bother to look at the underwriting standards on those loans. Well, sometimes they do. I won't say never. It's a figure of speech. You know, you got to use a figure, you got to do some generalizations and some stereotyping to make things simple, easy to understand. Right? But they usually don't consider the underwriting of the people holding those mortgages. And the underwriting standards today have been very conservative in most cases. I know there are some low down loans, but even with the low down payment loans, the underwriting standards have been tight. Okay, by and large tight. It's not like it was last time. So if you're looking for that, you know, 2008 crash, you're probably going to miss the opportunity there. And by the way, that was my dog mooing. Did you hear that? She moos like a cow. Yes, my dog makes very funny sounds and sadly my dog is not feeling well. So please pray for her quick recovery. I'm very worried about her. I could show you a chart, but I don't have it handy, of mortgage credit availability. And you would just see how hard it is to actually get a mortgage right now and how hard it's been over the last several years showing that the banks are underwriting very carefully. So if you're looking for all those defaults, not going to happen, except they're going to happen here in the commercial real estate market. Now not all classes of commercial. Here's another faulty thing people do, they misclassify it and they call it commercial in quotes. Well, what does that mean? What type of commercial property, where's it located? Is it office space, is it retail properties, is it industrial properties, is it self storage, is it gas stations? Like you know, there's a zillion different types of commercial property and then there are many locations and price ranges and different types of asset classes. Lots of ways to divide this up. A lot of segmentation needs to happen. But generally the two hardest hit asset classes in the commercial real estate world of course will be office space and retail properties, especially in trophy tier one cities. New York, San Francisco, LA and to an extent, Boston, Seattle, San Diego, you know, to a slightly lesser degree, Portland, etc. Right. All of these places, very hard hit, civil unrest, no ability to socially distance, concerns about contagion, etc. Right. Here's the question people should be asking is they should stop worrying about the market itself and look at the knock on effect. Because all of these commercial properties, they have mortgages and those mortgages are tied to securities, various securities, but especially bonds, cmbs, commercial mortgage backed securities. And as these mortgages default and the bankruptcies mount and they're already mounting of these companies filing for bankruptcy and we're going to see a lot more of that. It's going to get a lot worse before it gets better. But it's just Joseph Schumpeter, my favorite economist, his concept of creative destruction, this was happening anyway, Covid 1984 simply accelerated that trend. So as we see that there are going to be massive defaults on these commercial mortgage backed securities and guess who owns those? Well, life insurance companies, pension funds, university endowments and private investors like you potentially. You know, you might have those in directly, you might have direct ownership or they might be in some fund that you own and you don't even know it. That's going to hurt. That's the thing people should be looking at. But when we look at retail sales overall, look at this chart, if you're watching, by the way, if you're not, I'll explain it to you. It says US Retail sales return to pre pandemic levels. Monthly retail and food services sales in the United States seasonally adjusted, which is the better way to do it according to the U.S. census Bureau. That's where this chart is from. The August figure represents an advance estimate based on subsample of Census Bureau's full retail and food services sample. It basically shows a slight upward trend where you've got $537.52 billion in sales in August. And yes, you know, you go back a few years and even if you go back two years, it was as high. It did take a dip during the lockdown phase. And you know, we still have lockdowns in many areas. But overall it's up now. It's not up in physical stores. It's up online, of course. And you already know that and we've talked about it ad nauseam on prior episodes. So, so let's go to our guest. But I do want to remind you that we have our version 2.0 of our asset protection and estate planning webinar and that's available to you@jason hartman.com protect jasonhartman.com protect a more advanced webinar that you guys asked for. So we aim to please. And we provided it. Our lawyer went back to the drawing board, redid his presentation and made a more advanced version based on a lot of the questions you asked for those of you, hundreds and hundreds of you that attended the prior webinar. So Jason hartman.com protect, like protect your assets and Jason hartman.com protect for that. And without further ado, let's go to our guest and let's talk about his real estate investing case study as he started with us somewhere around 10 years ago, I think. And also this trademark trolling, well, you decide if it's trademark trolling. I think it is by Apple, one of my, one of the companies I really admire. In fact, I'm using their products right now. I've spent an awful lot of money with that company. All right, here we go.

It's my pleasure to welcome one of our clients back to the show, and that is Russell Munson or Russ Munson. And he was on the show before, talked about his client case study as a real estate investor. But today we'll touch on that. But today we're going to talk about something else, and that is an aspect of the tech tyranny that I keep talking about. As you know, I am a consumer advocate and I have a very big distaste for bullies. When I hear stories like you're about to hear, I really get upset about them. You're going to hear about a tech giant, the largest company in the world, and that is Apple Computer, a company that I use their products. Most of us do have long thought of myself as a fan of Apple, but I'm definitely becoming less of a fan. And this story is one more step in that direction, moving the needle away from my interest in Apple. I used to really like Tim Cook and thought he was doing a great job, but some things, I've really called that into question lately. And this is yet another part of that story. Russ is a cpa. He also has a company that he started that is now being bullied by Apple. So you're going to hear that story and hear a little bit about his real estate investments and how we got to this place. Russ, welcome. How are you doing?

I'm doing well. Thanks, Jason, for having me on. I've been listening to your podcast for years and so it's fun to be on again.

Yeah, it's great to have you. It's great to have you. When did you first start listening to my podcast, just out of curiosity?

I started right in the middle of the Great Recession. So when the housing collapse was happening before, I was just searching on podcast players for best real estate podcasts, landed on yours. And it kind of guided my investment philosophy and a lot of the decisions that I made in terms of my own investing and been a big fan of of yours ever since.

Good stuff. Well, thank you. And thank you for all your business and your referrals. We really appreciate that. Obviously, tell us how your investing involved a little bit and how it funded the business you have now.

So I started picking up just a couple of houses locally. I live in Utah during the Great Recession when everything was basically free. And I just saw I was in the mortgage business at the time and it was obvious to me that when the cost of buying a house was less than the cost of building a house, unless you had a massive population decline, like something good was going to happen. To the prices of those. I was mostly investing at the time with the properties I was purchasing just for appreciation. And then I started listening to your podcast and started learning about really the value of some of these other markets other than my home state in Utah. And I just didn't really have the resources to branch out of Utah. I just. Or at least I didn't think I did. And so I connected up with an investment counselor at your company and started acquiring properties outside of Utah. I started in St. Louis, bought a couple of duplexes and fourplexes there, and then I bought several properties in Memphis, and several family members bought properties in other of your markets and started the cash flow machine, I guess.

Excellent. Excellent. Well, good for you. So you started investing with us when? Around 2008 or 9, or was it that far back?

I think my first property purchased with you probably would have been in 2000. It might have been 2009. Yeah.

So 11 years ago then. It's 2020 now. So just give in case you're listening to this five years from now. So you never know around the block.

A time or two.

Yeah, you definitely have. Well, you started in the Great Recession, which was a good time to start. Times of economic uncertainty are times that create a lot of opportunities, and I think now we might be seeing that again. So without going down that rabbit hole, which would take a long time to discuss, I want to just get to the story a little bit. So you began investing with us that enabled you to fund a business.

Yeah, that's right.

Okay, tell us about that.

Yeah, so I was investing in real estate on the side of my main job. I was a cpa, worked for a large bank, and at the same time, my wife was actually building a food blog and I was kind of helping figure out how to make money from the food blogging business. And we got to a point where we were able to make that business very successful. And I was able to quit my full time job from the combined income of the food blog and the real estate business. And when we got into that, our food blog really took off, thanks to the rise of Facebook. Back when Facebook was first starting to go big and we got millions and millions of followers on Facebook and had a ton of traffic and were able to build a business there. And then shortly after we built that business, the Facebook algorithm turned against us and it started to erode our traffic and try to keep users on Facebook instead of on the content provider site. And so we had kind of a really rough experience there figuring out how to Monetize a content based business when the big tech companies in control.

Yeah I know that's the problem with today's world. I tell you, these big tech companies are just bullies and we're obviously going to get into that today. They can just ruin people's lives and you just have no recourse at all. It's so unfair. That's why we need these companies to be split up. We need a broader marketplace so there are choices, so there's more variety.

This would have never been allowed post industrial revolution, post robber barons, Carnegie's melons, Rockefellers, et cetera. And now we have that again because they're so much better at lobbying and basically faking that they're in other businesses that they're really not in. Because Google does this extremely well. By the way folks, have you ever wondered why Google is in so many businesses that make no money, that are complete failures? They'd like to say well they're experimenting, they're trying to get into this market, they're trying to compete. The real reason is so they can dodge the antitrust bul that's why they do this. They have no interest really in a lot of these businesses I don't think. I mean look at this my view as an outsider obviously so maybe they think differently but I don't believe them. So they say well we're in the self driving car business, we're in the search business, we're in this business to that business and we don't dominate any of these things. We're in all these businesses and so they're able to dodge that bullet. Plus the fact that they spend a zillion dollars on lobbyists and they get all the laws written in their favor, it's just a complete scam. So hopefully this is going to change. But if you want to share your screen and show us your business so we can get the background and then let's see what's happening. We're going to look at legal notices and really kind of dive into this. I think it'll be fascinating to you.

Yeah, it is really interesting the argument that they're not monopolies. I mean it's hard to imagine there have never been bigger companies with more market power in the history of the world. And if they're not monopolies, I don't know how we define it.

It's.

Interesting situation when, when These companies.

Have GDPs larger than many countries. I think you can call them monopolies by then. That's right, yeah. And the fact that they all work together and they curry favor with the government by becoming proxies for the government. Think also about this, listeners and viewers. The government is not allowed to impede your right to free speech under the Constitution. Of course, we know that as the First Amendment. But a private company can censor your speech. And if a private company becomes a proxy for the government, and that's how they curry favor with the government, to get laws written in their favor and allow them to pay little to no taxes because they have all these offshore companies, it's a complete scam. I mean, this is just a complete scam. Hopefully this will move the needle and they won't take the show off the air because they definitely censor this kind of stuff. What kind of food blog was your wife doing?

Yeah, so our food blog that we built was called Super Healthy Kids. So it's a blog dedicated to helping parents have the resources they need to feed their kids healthy food instead of junk food, to kind of battle their kids desire for chicken nuggets and Mac and cheese all the time and get them eating and developing healthy habits.

Right. So there you're going to piss off a lot of big powers. McDonald's isn't going to like you very much. Right.

Our Facebook pages tend to be full of controversy about people's food religions. So it's very interesting.

It's a good way to put it. Good way to put it.

Yeah. But what we kind of did with Super Healthy Kids, I mentioned that we had seen kind of how those big companies, the big tech companies, algorithms, could make it so that you aren't really in control of your business. So we decided at that time to start building some sort of content delivery system that wasn't in control of big tech companies that we could extend to other food bloggers to build their businesses on. And so that's how this business that we are running into problems with Apple was formed. And that company's called Prepare. As you can imagine, in our view. One thing that's interesting to think about here as we kind of walk through what we do with Prepare is how dissimilar the services, the nature of the operations of what we're doing are from a computer technology business. There's virtually no way that these two businesses can be confused or be considered competitors. So it's kind of an interesting background for this. What we do with Prepare is we create a connected cooking experience so that you can store all of your favorite recipes in one place and you can use basically all of the content that you like. To consume on the Internet without the advertising infrastructure that bothers you while you use the content, and that your use of that content will benefit the content creator directly. So we have a paid version of Prepare called Prepare Gold, where subscribers can pay $59 a year to be a member, and we then share that revenue directly with the content creators. And that's kind of exactly our view of how some of these tech companies should work. They don't share their revenue.

So what is a content creator? Someone with a recipe.

Yeah. So in the example you can see here, this recipe from Super Healthy Kids, if I were following Super Healthy Kids on Prepare, I would have access to their content in a format that doesn't include display advertising from that Food Blogger. That's really kind of a cumbersome thing to cook from a phone when the ads are jumping you all over the page. We solved all of those content problems. And then as a user, you can see if you're not a paying user, which how I'm logged in now is not a paying user, you can view that content on the Blogger site with those advertisements. If you decide to pay, then you can view any of their content with no advertisements, and we then send that money back on to Food Blogger.

So, first off, I want to be a content provider because, as you may have heard on the podcast, I'm a little bit into cooking now. It used to be that the best thing I made for dinner was reservations, but I've gotten better, especially with these lockdowns and so forth. And I tell you, I make the world's best salad ever.

Really?

Like, nobody makes a salad better than I do. Okay, so I got to get my recipes on your site. Okay, go.

Awesome. Well, we'd love to have you as a content creator, and that would kind of highlight. We could have an Eat Like Jason meal plan that people can subscribe to and be fit like you. So. And that's really kind of the idea behind Prepare is it allows you to create cookbooks to kind of store even your own family recipes. So you can, for example, create your own cookbooks with all of your family recipes. I share my family recipes. You can do your meal planning, and you can even send your grocery list directly to Walmart to do your shopping so you don't have to go into the store anymore.

That's super easy. Yeah.

We basically just tied all the things that you need to cook from home successfully into one solution, and that's really what Prepare was about. But having it not be a tech company that isn't caring for Everyone who's involved in that transaction, the content creators involved in the transaction, Prepare is involved in the transaction, and the consumers involved in the transaction. And we're really trying to do right by everyone.

Your investment counselor posted something in our private group about how this was happening to you, this burgeoning legal battle with Apple. Then a couple of days later, I actually saw in the mainstream media, I saw a story about you and I thought, this is our client now. What are you going through? What is Apple? What is their problem with your company?

When we started prepare, we filed for a trademark for this pear icon. It's an icon that clearly represents a pear. It's usually used in the color green. It looks nothing like an apple whatsoever. Used to represent a meal planning and cooking business. And the fact that it looks nothing like an apple is why this has gotten so much media attention. So when we filed for our trademark, unbelievably, this will tell you how the legal process in the United States works. In January of 2017, we went through the whole process with the Trademark Approval board and we finally got our trademark approved in fall of last year, where the trademark agency of the US Government said, look, there's no conflicts here. We're going to release this trademark and you guys are going to be.

So that's the uspto, the Patent and Trademark Office.

That's right.

Yep. I have many trademarks. I know them well.

Yes. So they gave us the all clear and published our trademark for other companies in the world to look at and see if they had a problem with it. And on the last day of the window to oppose our trademark. Apple didn't file to oppose our trademark. They filed to extend the date that they could oppose our trademark and then repeatedly filed to extend that date as far as they possibly could to make this as difficult as possible for us to bear the burden of and keep us in limbo as long as possible. And this is kind of a practice they do with all of the trademark oppositions. They do, yeah.

Now Apple's in a big fight with Fortnite. I don't know much about that story. I haven't been following it. But they're in a big fight with them, too. So the article that I saw in the mainstream media was basically it said something to the effect of Apple to startup change your logo or else. That was the headline, I believe. So they're telling you that their logo is an apple with a bite out of it. Your logo is a pear with no bite out of it. That looks nothing like their apple. But I guess Apple is claiming the rights to all fruit.

Yes.

Are they claiming the rights to vegetables, too? If I opened a company called Broccoli or Potato, would they be suing me? I mean, I wouldn't put it past.

Them, but it's very clear that they. What they described in their legal action to us. And I'll show you what their actual legal action says. It says consumers encountering applicant, that's us Mark, are likely to associate the mark with Apple. Applicant's mark consists of a minimalistic fruit design with a right angled leaf, which readily calls to mind Apple's famous Apple logo and creates a similar commercial impression. And then they show a side by side that clearly shows no similarities between these two logos other than what they described. They're both fruit and they both have leaves.

Now, when you file for a trademark, there are, I think, 40 classes under which you can classify your trademark. And some of the classes you can tell the government designed all this because they're kind of odd. Like when I want to trademark, my name is trademarked, for example. Right. Jason Hartman is a trademark. Okay. I can trademark it under one class, multiple classes. And the classes are a little bit funky. You know, they don't make sense to at least the layperson. But you're not a computer company. Right. You don't want to make cell phones, iPhones, smartphones or computers or hardware. You're selling recipes.

There's no competition whatsoever. And in our class description, we're in the same class in terms of creating software. But if that is what makes its competitors, then everyone creates software. I'm sure you create. There's no company that doesn't create software anymore. But our class description describes it as software for meal planning and recipe management. And Apple, interestingly, isn't even. They're not even contending that they're in a competing business with us in terms of the class. They are saying that because they have the Apple Watch and the Apple Health app, that somehow they may eventually end up in the recipes business. And so they don't want consumers to be confused between these two.

Okay. Now, do you have an app in their App Store?

We do, yes. We have an app in Apple's App Store and in the Google Play Store.

And what was the app? What is the app called?

The app's called Prepare. So that's the name of our company. Kind of highlights the parallel.

They approved your Apple.

Yeah, there's no problem. We follow all of the App Store guidelines completely.

How long ago did they approve your app?

We've been in the App Store? Since September of 2017. For years.

Okay, so for three years. And how long ago did you first file for the trademark?

In January of 2017.

Okay, so they approved your app and they saw the design. The logo is on the app, I'm sure, right?

Yep. Yeah, the logo is the main app icon.

Did they threaten to kick you out of the App Store also?

No, they haven't made any threats about the App Store. They are just saying that our logos are confusing and that we need to change ours. They're demanding that we change our logo and abandon basically the brand that we've spent the last three years building and that they have a right. They believe they have a right to control our intellectual property that we own and have developed.

Now, did you file under multiple classes for the trademark?

We did, yeah. We filed under kind of a social media type class that is basically electronic communication class and under a software development class for meal planning software.

Okay, and did they agree that you could if you abandon the software class? Well, I don't know if you've had this negotiation with them or if you'd be willing to do it, but did they agree to stop harassing you if you would abandon the software class and maybe keep the others?

So Apple has made no requests of us regarding the abandonment of our class. They have focused entirely on this concept of that consumers are going to be confused between our logos. So they've made no contention regarding us changing the class and things being better. They have solely repeated to us and reiterated to us that our minimalistic fruit design with a leaf is confusingly similar to their Apple.

And when we.

When we got that information, I mean, this honestly reads kind of like an Onion article. We had a disbelief that meaning Onion.

Is the site with these phony stories.

Yeah. With the phony news stories. Yeah.

Like there's.

There's no way that any rational consumer could think this. So we thought, well, when we go talk to Apple, then we'll obviously be able to straighten this out because there's more to the story here than we're reading in this filing of theirs. And the answer is no, there's not. They're really contending that pears and apples can't coexist without consuming confusing consumers.

Do you know if there are any other examples of other fruit logos that Apple has had problems with?

There are. So they have. This is not. We're not like a random target here that they have come after. In our research, we found more than 40 other unrelated fruit icons and logos that Apple has opposed the vast majority of which just don't respond to Apple's opposition and lose their trademarks. And very, very rarely does somebody decide to fight Apple. That's actually what spurred us on to want to fight Apple in this case. Yeah, it's so it's such a ridiculous claim and it's being done over and over and over again. Regardless of the fruit. There are claims against oranges, bananas, apples, limitless numbers of them. It's hard to even imagine if Apple were to want us to change our logo, how we could change it in a way that it wouldn't be violating their brand from their perspective.

So I have litigated cases where the other party is just either a crook or a bully. And you know, I know that if look at, I have resources, I can afford to stand up to them, but other people can't. And I look at like their litigation history and I've heard the other complaints from other consumers that just never bother to take them to court. I feel that it's my duty to do something because if you don't stick up to them, who's going to do it? They're just going to keep rolling over everybody. So I really applaud you for doing that. Of course I'm not a legal expert, neither are you. But this just seems on its face like to a common sense layperson that this is an act of just bullying. They're a trillion dollar plus company. I mean they know they can just throw their weight around and just roll over and destroy companies like crazy. It's ridiculous. Here's what this article says by the way and I saw this on newser mainstream media by then Apple to small startup colon ditch that logo or else the tech giant sues Prepare over its logo of, you guessed it, a pear. Note to small startups, try not using a fruit logo. Apple might get mad. The tech behemoth has again filed suit over a fruity logo, this time against a five employee startup called Prepare that advertises its with the image of a green pair Entrepreneur reports. Which by the way Entrepreneur was in a big lawsuit with a friend of mine years ago and one they bullied him into submission because he was using the word entrepreneur. Which incredible wasn't like sharing with entrepreneur. I mean this is unbelievable sometimes. Okay. And it says now Russell Munson, the Recipe app's founder has posted an online petition. You can see the Prepare logo here and there's a link to it seeking people's support. Quote It's a very terrifying experience to be legally attacked by one of the largest companies in the world, even when they have clearly done nothing wrong, unquote. He writes, we feel a moral obligation to take a stand against Apple's aggressive legal action. Unquote. His petition has more than 63,000 signatures so far.

That was a few days ago. We're up to 175,000 now.

Oh, you're showing the petition on change.org.

Yeah, this is the petition that we've kind of. We've sent to Apple, actually, and received no response to this. In fact, we sent this petition and we honestly assumed that when they saw the public outcry about this because millions of people have seen our logo side by side, and nobody is confused. We thought, you know, they. Maybe they're making this legal argument, really, they think people will be confused. So let's use our millions of social media followers with our food blog to run that experiment in the real world. And no one is confused. There is. Nobody has gone into an Apple store and asked them if they can help them make dinner. It hasn't happened. So we. And by the same token, nobody has tried to buy a computer from us since this whole thing came to light and became public.

So you're not selling many computers with pairs on them, huh?

No, believe it or not, we haven't stepped into their business at all. And we thought that they would respond to this petition saying, oh, well, that they're a rational actor in a way and would look at this and say, okay, there is no confusion. Let's drop this. It's not worth the PR nightmare that this is. And we have learned from our attorney speaking with their attorneys that not only are they not dropping it, they're doubling down. They've now filed an opposition against our trademark in Canada as well, and they're doing their best to make this as expensive and painful as possible for us to keep our logo.

You know, I'm not familiar with the world of the big corporate world. I've never worked in a big corporation. I don't really understand how they operate. You know, you just got to wonder if this kind of stuff makes it to the desk of, like, a human who's actually thinking versus lawyers who are just incentivized to, you know, do their job right and extract value from people. Right. You know, that's what. That's what some of them do. Like, does Tim Cook, for example, as a human being, know about this? And if this makes it to his desk or a meeting with him, would he just be like. Like a rational person and say, you know, this is Kind of ridiculous. I think we should just let this go.

I've got to hope that would be the case. That if you could get through to other, other people inside of Apple, I think they've intentionally designed the system so that you can't get through. So they have not responded to the comment requests of dozens of reporters who've reached out to them. Not a single comment request has been responded to. Their stance is to just ignore this and let legal have its way with us.

So have they actually served you with a lawsuit? I mean, the article says they sued you, but it doesn't sound like they have yet.

Yeah, so in the trademark proceedings, what they've done is filed a notice of opposition, which is a document they file with the USPTO that we then have to respond to. If we don't mount an aggressive defense of their opposition, we automatically lose the right to use our logo.

So I had that happen once in one of my trademarks. You know, I have many businesses and my main thing is the real estate business. But, you know, I have other businesses too. And I filed a clothing trademark years ago and a clothing company that was like 100-year-old clothing company opposed my mark. And, you know, we went back and forth, I spent some money and they finally relented and let us have our mark because we weren't competing with them. But that at least was clothing to clothing. This is so different that it just seems like a stretch. Again, I'm not a legal expert, folks, so I can render a legal opinion. And, you know, the law is complicated, of course, it's super complicated.

But yeah, it certainly is. And I think there are some structural problems in the law that facilitate this sort of behavior where it puts large companies at an advantage over small companies, probably because that incentivizes additional legal fees to be spent. You know, Apple can have their attorneys file dozens and dozens of these oppositions every year, knowing that maybe 10, 5% of the people on the other side are going to spend the minimum $50,000 that it's going to require to fight them all the way to the end. And it doesn't matter to them. That doesn't matter at all. But it matters to those dozens and dozens of businesses for whom $50,000 to defend it is an extraordinary amount of.

Money, and believe me, it could cost way more than $50,000.

Oh, yeah. That's the minimum to fight something like this, right?

Yeah, yeah. I mean, Apple, I'm sure, has the best lawyers on planet Earth and they pay them a fortune. They have giant Law firms with tons of resources, research resources, research capabilities, just. It's just insane. I mean, the level at which they can fight. It's like the US Going to war with some dumb little country that has no military right. It's not a fair fight. And that's the problem with the legal system.

And it's a fight that by default you lose. So there's no, there's no option to not defend. You either quit or defend. And there's no second review board. There's no common sense person that looks at this to see, oh, if you don't have a case, then you'll have to pay the legal fees. If you want to take this frivolous lawsuit through, there's no, there's nothing there. It's just get your attorneys and lawyer up.

That's, you know, you know, Prageru or Prager University sued YouTube, Google, slash, Alphabet, whatever you want to call them. And I don't know the status of that case, but they claimed that Google or YouTube was downranking their videos in the App Store because their videos are conservative and Google is liberal, as most tech companies are. And I don't know where they got with that. I assume they probably didn't get anywhere with it because of the way the system works and this. They just have everything in their favor with their lobbyists. They can write law. They don't have to fight the law. They write the law. Okay? When they have lobbyists, an army of lobbyists. And the reason I'm saying that is because I'm wondering, do you have any inkling or any suspicion that because of this problem that Apple is downranking your app in their App Store? They control the audience that sees your app because they control the App Store. They do now, at least. They don't control the Internet. Okay. At least not yet. And so they can't control who sees your website necessarily, but they certainly can control who sees your app in their store.

They can. Inside of the App Store. We truly have no evidence that they have done anything within the app ecosystem to punish our app in connection with this. In fact, the message getting out there, like the support of hundreds of thousands of people has been extraordinary. We have had so many people downloading the app and using it, having a good experience, that there's at least we've turned lemons into lemonade here, if I can still say that it does use a fruit. So I should probably be extra cautious.

Yeah, we've been able to turn lemons into lemonade here. And I don't have any suspicions that the other side of Apple, the technology side of Apple, is somehow punishing us in any way?

Hopefully they're not, so that's good. I'm going to download your app right now. So anything else you want to tell us, questions I didn't ask you, just let us know. And by the way, I want to invite any representative from Apple that wants to come on the show and tell their side of the story. Okay. You know, we're open. I have people that disagree with me constantly on the show. You know that, Russ, because you've been listening for a while. I have people that I wouldn't even come close to agreeing with on my show. You know, we're always happy to hear the other side of the story. You know, anybody from Apple is certainly welcome to come on and tell their side of the story. So go ahead. Anything I didn't ask you.

The only thing I would say in closing is I hope that the fact that somebody's standing up to Apple inspires other people to do so. You know, one of our missions at Super Healthy Kids is to raise healthy kids, and that includes them having healthy social and emotional habits. And one of the main things that's part of that is developing the character to be able to stand up to bullies, stand up to injustices, and do the right thing, even when it makes you uncool or unpopular or it's going to be incredibly expensive. It's just important that our world is filled with people who will stand up to bullies, to people who are willing to take advantage of other people. And. And I hope this inspires some people to do the same.

I hope so, too. And you know what? The way I look at it in business is I look at some of these things that I have to do as just inefficient things that really don't always make sense economically. Sometimes they do, but I look at them as if nothing else. It's like charity work. Okay. You know, I donate money to charity, and sometimes you have an additional expense that's like, for the greater good of the industry, the community, the human race, whatever. Right. And so I totally understand what you're saying there. Thanks for sharing the story with us, and I wish you the best. Thanks for sharing your investing story with us. You were on the podcast one other time before talking about real estate investing and how that's helped you, but this is more about the pear and the apple. Who would have thought? It's not David and Goliath. It's the apple and the pear.

Unbelievable. Well, it's a pleasure to be on. I've really appreciated all of your advice over the years and there's a lot of wisdom in your podcast and it's been a real benefit to us and helped us create a financial position where we can build a business and do the things that we're doing.

So good stuff. Yeah, yeah, it's my pleasure. And I hope that this show does not get censored in some way. That's what you. You have to fear with the the powers that come be. There's the power of the world to shape elections and just everything to start or end wars is in the hands of a few giant tech companies. It's unbelievable the power they have. So let's hope they follow Google's old saying that Google has certainly not followed. That is don't be evil.

Right?

All right, well, good luck, Russ. Thanks for sharing the story. And by the way, give out your website.

Is it prepare.com yeah, prepare.com P R E P E A R like the fruit dot com.

Good stuff. All right, thanks again.

Thanks, Jason.

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