World's Greatest University Takes Heat
Harvard Pilgrim Health Care, the largest health plan in Massachusetts, having experienced huge losses, went into receivership in January. Whence might come the funds to recapitalize the sinking nonprofit? "How about the institution whose name is on the door? How about Harvard University?" asked Boston Globe economics columnist David Warsh '66. The University helped create the plan, he wrote, and Harvard luminaries had been involved in its governance until a 1996 merger with another health plan. Harvard declined to make the mammoth loan required, or to guarantee loans made by others. When the sale of Harvard Pilgrim to a for-profit organization seemed a possibility, the University asserted its rights to the use of its name, meaning, says University attorney Frank Connors of the General Counsel's Office, that "the Harvard name couldn't be sold along with the other assets without the University's permission." Unwilling to accept that without a fight, state Attorney General Thomas F. Reilly, principal receiver, sued Harvard in the commonwealth's highest court. Harvard then asked the federal district court to hear the case and to assess Harvard Pilgrim for the University's legal costs. Subsequently, through creative accounting, Reilly transformed the health plan's net worth from minus $88 million to plus $178 million, and the patient seemed out of danger. But the business about the name did not play well.
"In the course of a couple of weeks [see the cartoon above, which appeared in the Globe] the university has gone from a potential hero in the Harvard Pilgrim mess to a potential goat," wrote Globe columnist Steve Bailey, AMP '94. "Harvard, the Coke of education, has a responsibility to protect its name. But it must pick its spots; Harvard Pilgrim is neither the time nor the place. If Harvard wants exclusive control of its name, it should find a name that every pizza shop and financial planner on the block isn't already using. Something catchy like The World's Greatest University, which was coined by my modest pal [and colleague] Alex Beam. And Beam might just be willing to license it to Harvard--for a fee and subject to the proper restrictions, of course."
Knowing the right time and place is a vexing matter (see "Harvard Eggs? Protecting the Name," January-February 1998, page 72). What to do about "Harvard.com," the domain name owned by the Harvard Book Store? Or "Harvard.net," website of the eponymous major provider of Internet connectivity and e-business solutions? Expect more such issues--and challenges--as distance learning takes off and the value of Harvard's "brand" rises for e-commerce uses.
Illustration by Nick Thorkelson
