Leveraging intellectual property: Where's Mr. ZIP when you need him?
February 26, 2013
Last week the Postal Service announced that it is partnering with Wahconah, a Cleveland-based clothing manufacturer, to develop a new line of "smart apparel" (also known as "wearable electronics") called “Rain Heat & Snow.”
The USPS press release about the announcement can be found on the Wahconah site, but for some reason it has disappeared from the USPS website, leaving a trail of broken links in several news articles. (Update: Dead Tree Edition has the explanation.)
The press release says the new line will “leverage the intellectual property” of the Postal Service. That’s a fancy way of saying that postal management wants to exploit the USPS brand — and all the trust associated with it — to make a few bucks in the rag trade.
Many postal workers commenting on the postal news websites thought the idea was a joke, and Citizens Against Government Waste, a right-wing advocacy group, headlined its story: "CAGW on USPS Clothing Line: Could Be Ripped from the Headlines of 'The Onion.'" CAWG proceeds to describe the idea as a "make-work" project for "hundreds of thousands of excess USPS employees."
That's completely wrong, of course — the clothes will be manufactured by Wahconah, not postal workers (and there aren't "hundreds of thousands" of unnecessary postal workers) — but CAWG is right about one thing: "The project will certainly create jobs in the writers’ rooms of late night comedians who need material for their monologues."
Save the Post Office had its fun with the idea in this slideshow, and the announcement was greeted with a considerable amount of derision elsewhere in the media as well:
“Haute couture by the postman” (Washington Times)
“Desperate U.S. Postal Service Tries to Find its 'Cool' Factor” (Reuters)
“USPS "Rain, Heat & Snow" clothing line but not on Saturday” (Breitbart Feed)
"Forget Marc Jacobs: The Postal Service is Hot This Spring" (Corporate Intelligence)
“USPS clothing line: Dress like the mailman?” (Christian Science Monitor)
While the Postal Service is to be commended for experimenting with new ways to make money, the clothing idea is pretty ridiculous. There are enough companies selling clothes, and there’s no reason for the Postal Service to get into the fashion business.
But in terms of “leveraging intellectual property,” there’s a lot to consider and many other possibilities worth exploring.
The potential financial value of USPS assets
The Postal Service owns vast amounts of intellectual property — its brand and logos, the New Deal murals and sculptures in post offices, photos and historic materials, trademarks and images, patents and copyrights, trade secrets, and so on.
There’s been some debate about whether or not the Postal Service is taking full advantage of the value of this intellectual property (IP). Some argue that the Postal Service should be doing more to capitalize on its IP to bring in much-needed revenue. This article, for example, explores "How recognizing the increasing importance of IP in the postal/parcel industry and harnessing the power of disruptive innovation can revivify the USPS." It's all about the Postal Service could monetize the untapped potential of its intellectual property.
Others argue that the Postal Service, as a government agency, ought to be sharing its intellectual property as a public service. Why should the Postal Service prevent someone (as it sometimes does) from taking photographs of the murals in a New Deal post office? They belong to the public realm and shouldn't be seen as proprietary.
On the other hand, many businesses capitalize on USPS intellectual property for their own profit, with the Postal Service basically giving away valuable assets just for the asking. That may be problematic at a time when the Postal Service needs to find new sources of revenue.
The USPS OIG recently opened a discussion about intellectual property on its "Pushing the Envelope" blog. The OIG notes that compared to other industries, such as information technology and wireless communications, “the Postal Service has not significantly leveraged its intellectual property or fully recognized the potential financial and strategic value of these assets.”
A 2011 OIG report focused specifically on USPS patents and found that “the Postal Service currently does not manage its portfolio of patents to maximize commercial significance.” The report is heavily redacted with most of the interesting details blacked out, but the bottom line is significant.
The OIG estimated that the USPS commercial patents could be worth about a half billion dollars annually. That’s just about how much the Postal Service says it will save by reducing hours at 13,000 post offices under POStPlan.
The big business in ZIP codes
One form of intellectual property that might be worth exploring is the ZIP code system. ZIP codes have been around for fifty years, so we take them for granted and don’t really think much about how they’re used and what they’re worth.
But you’ve probably had this experience. You’re at the checkout counter at a retail store, and after you hand over your credit card and the clerk is processing the transaction, you’re asked for your ZIP code. Most likely, you assume it's for security purposes and don’t hesitate to give out the number.
In many cases, however, that's not why they asked for your ZIP code. In fact, you were probably asked to share your ZIP code after the transaction was already processed. The reason the business wanted your number was that it’s worth money.
Knowing your name and ZIP code allows merchants to easily find your entire address. They can then develop mailing lists for their own marketing purposes, as well as selling the lists to others. Knowing your ZIP code also allows companies to determine where customers are coming from, which provides clues about where it might be advantageous to set up a new store.
At least two states have examined the legality of the practice of asking for your ZIP code at the checkout counter. A court in California and another in Massachusetts have ruled that your ZIP code is “Personal Identification Information” and therefore your own business.
All of which is to say, ZIP codes are worth money, perhaps billions of dollars.
One particularly intriguing direction for future use of ZIP codes involves hybrid mail (systems that combine electronic and physical mail). The USPS OIG, for example, has suggested that the Postal Service could offer consumers and businesses an eMailbox — a unique address in a secure email system operated by the USPS. Such a system could be established and maintained in the same manner as current ZIP code addressing standards. The country would then have a national hybrid mail system, with routing based on the ZIP code (more on that here).
Another proposal, entitled “Ezipcode Email Marketing," suggests that if the Postal Service were to give each person in the country a free email account, the agency would be able to develop a a huge database integrating ZIP codes and email addresses, which could be sold and licensed to marketing companies and others.
Postal Codes in Canada
According to a recent article in Gigaom, Canada Post knows all about how valuable its postal code information can be. Canada Post has filed a copyright lawsuit against a company named GeoLytics, which publishes postal codes (the Canadian equivalent of ZIP codes) on its website, Geocoder.
GeoLytics created its database of postal codes through crowd sourcing, and it gives the data away for free to non-profits and also licenses to businesses. Canada Post considers its postal codes proprietary information, and it didn’t want the data released for free by another company.
After getting some flack over the lawsuit, Canada Post is now providing access to its database of postal codes — but only the first three digits, which just indicates a general area, not a specific location.
One of the main issues with the GeoLytics lawsuit was that marketing companies that have developed and sold their own databases using postal codes could face similar copyright claims by Canada Post. As the Gigaom article notes, "Canada Post’s attempt to collect copyright revenue may be an effort to avoid the fate of the American postal service, which is on the brink of insolvency."
Marketing ZIP code data
The Postal Service is apparently much more generous in sharing ZIP code information than Canada Post. While ZIP Code data boundaries are proprietary to the Postal Service, it licenses companies to use the data and to package and sell the information themselves.
According to this FAQ page on the USPS website, if you want a directory of the national 5-digit or ZIP+4, you can contact the USPS National Customer Support Center, which, for $60, will provide an interactive DVD with the data. (You can order it here.) The accompanying guide says, “The data is encrypted and cannot be exported.” There’s also a complex licensing agreement you’ll need to wade through, here.
ZIP code data are thus available through a number of private companies that have set up these licensing agreements and then sell the data, which is essential marketing information. In addition to GeoLytics, for instance, there are zip-codes.com and zipinfo.com.
One of the biggest companies involved with selling ZIP code data is Pitney Bowes. It markets ZIP Code products that include things like a geographic data set that contains the boundaries for each 5-Digit ZIP Code in the United States assigned by the U.S. Postal Service, in a format easily added to ManPinfo Professional software for mapping and other data analysis purposes. (The USPS website says, “The United States Postal Service does not maintain ZIP Code™ maps.”)
Finding ZIP code information
While ZIP code data information is a marketable product, there’s a lot of ZIP code information available for free.
There are several websites, for example, that allow you to search a location name to find the ZIP or vice versa. The most obvious choice is the official USPS ZIP Code Look Up, which allows you to look up ZIP Codes by street address, city, and state, or to enter a ZIP and find the corresponding city. If you enter a city and state, you'll get all the ZIP codes for that city.
Another site worth noting is Wolfram Alpha. It’s not about ZIP codes, but if you type in a particular location and ask for the ZIP, or just type in the ZIP, you can access a variety of census data in a very user-friendly format.
Finding a free database with all the US zip codes is a little trickier, but they’re out there too. A downloadable list can be found at federal government zip codes.com. It has a lot of errors, but it's supposedly up-to-date as of 2012, so we’ve put it on Google Docs, here, and generated this map, which locates nearly 82,000 ZIP codes:
Meet Mr. ZIP
Speaking of ZIP codes, this year marks the fiftieth anniversary of the figure who made ZIP codes a success — none other than Mr. ZIP, the cartoon character who helped introduce the country to the new postal code system back in 1963.
As the USPS explains on its website, in the early 1960’s, the mail was undergoing dramatic changes. Once primarily domestic, the mail was becoming increasingly business-related (80 percent, in fact), and volumes were rising faster than the system could handle. By the way, total volume in 1963 was about 66 billion pieces a year, less than half of today’s volume of about 160 billion pieces a year — yet still enough to merit six-day delivery.
The Department of the Post Office recognized that changes needed to be made in order to improve the speed and accuracy of delivery, so it developed the ZIP Code, short for “Zone Improvement Plan.” The first digit indicated one of ten large areas of the country, the next two indicated a more specific region, and the last two pointed to the post office. (The ZIP+4, which identifies an even more specific geographic area, like a block or office building, came out in 1983.)
In order to get people comfortable with using the new codes, the Postal Service also introduced the cartoon character Mr. ZIP. He had been originally conceived to advertise a bank-by-mail campaign for Chase Manhattan Bank, and then subsequently acquired by AT&T, which offered him to the Post Office for free.
The Post Office took the original figure, put a letter in his hand, and dubbed him “Mr. P.O. Zone.” Someone soon realized that Mr. ZIP would be a better moniker, and that’s how he was introduced for the first time, at a postmasters’ conference in late 1962.
The rest of the country met Mr. ZIP in July 1963, and with the help of the Ad Council, he was soon busy getting everyone to put ZIP codes on their letters and packages. By the late 1970s, ZIP codes were on virtually every piece of mail, and Mr. ZIP's work was done. He was gradually phased out, but the Postal Service still retains all the rights.
Mr. ZIP is now semi-retired. He still shows up in the table of contents of Postal Bulletin, and to celebrate his fiftieth birthday, the Postal Service has apparently put him on Grand Central Terminal Express Mail and Arlington Green Bridge Priority Mail stamps. I say "apparently" because according to Beyond the Perf (the website of USA Philatelic), Mr. ZIP can be spotted on these two stamps, but it’s hard to see where. He’s not on the stamps and he doesn’t seem to be on the sheet either. Maybe the Postal Service changed its mind and has other plans to celebrate the fiftieth anniversary of Mr. ZIP.
The ubiquitous ZIP
Using ZIP codes has become so routine it’s hard to imagine a time when we would have needed Mr. ZIP to promote the system. These days, people actually fear losing their ZIP code, which sometimes happens if your post office closes. In 2011, when the Postal Service was closing hundreds of post offices and threatening to close thousands, the future of a town’s ZIP code was a widely shared anxiety. With the community’s identity tied to its ZIP code, hanging on to your number was an existential matter.
That was more than a vague feeling. So much in our way of life is now tied to ZIP codes. The U.S. Census Bureau divides the country up into Zip Code Tabulation Areas, which approximate ZIP code areas, and the census data gets widely used in countless ways. Insurance companies use ZIP codes when they set premiums (which involves, for example, identifying high-crime and low-crime areas). Banks use ZIP codes in the same way when they make loan decisions. Election campaigns use ZIP codes to target voters. Merchants use ZIP codes in their website store locators (type in your ZIP to find the nearest Walmart). The ZIP code has become much more than a tool for processing the mail. It’s part of our way of life.
Mr. ZIP and ZIP codes are just a couple of examples of the Postal Service’s cache of intellectual property. Whether ZIP data should be given away for free and left for others to profit from, or whether the information should be seen as USPS proprietary information and a potential source of new revenues, is open to debate. If you have an opinion, you might weigh in on the OIG's blog, here.
UPDATE: A few weeks after this post appeared, the USPS OIG issued a terrific report about ZIP codes entitled "The Untold Story of the ZIP Code."
Speaking of some valuable intellectual property, check out this priceless vintage video. (It's an excerpt from this longer video; you can see more videos and find the source for all the images in this post, as well as much more about Mr. ZIP, on the Postal Museum's website here.)