Category Archives: Business

Ignorance not Bliss – Avoiding liability for infringing pay-per-click advertising activity

Often, businesses treat intellectual property just as something they need to own and register, without giving enough thought to the risk of infringement.  Even where the risk of infringement is considered, business owners don’t often realise that they could be liable for the actions of their contractors or employees, even if they are unaware of them.

This is increasingly a problem when it comes to social media and online marketing, and a recent dispute illustrates the risks involved.  Ayesha Vardag, a prominent divorce lawyer, discovered that, unbeknownst to her, the marketing agency her firm had engaged was bidding on the name of her previous employer in order to generate enquiries through Google AdWords.  Following negotiations, Vardag agreed to settle for over £40,000, as reported by The Lawyer.

European Trademark Registration

European Trademarks

European Trademark RegistrationIf you are doing business in a number of different European countries then, rather than registering your trademarks in each jurisdiction separately, you will likely apply for protection at the European level. 

This enables you, through a single application, to  secure protection in all 28 countries (and counting). 

Unless you only need protection in one or two member states, a European trademark is a far more cost effective, and straightforward solution.

However, it is not without its risks.  While a trademark application in just a single country generally just faces the possibility of an objection from other brand owners in that country, a European Community Trademark can be opposed by an existing trademark owner in any one of the 28 member countries of the EU.  This would then block the entire trademark.

So, how can you minimise your risks? The key is to commission professional searches to identify potential obstacles before you commit to a mark, and file your application.  You might begin by initially looking at the UK and European trademark registers, before then expanding the search to the national registers of each EU country.  International searches like this can be quite expensive, and offer diminishing returns, so it is important to discuss what degree of searching is appropriate with your legal adviser.  It is never possible to eliminate the risks entirely, but through appropriate searches, you can improve your chances without blowing your budget.  Your attitude to risk, and the funds you are willing to commit to searching, will generally depend upon how critical your brand is to your business.

But what if you do encounter a problem? That is not necessarily the end of the road.  If your European application is opposed by a business with rights in just a single member state, the first step will generally be to negotiate with them, and see if it is possible to come to an agreement allowing both businesses to coexist.  Under some circumstances, it might not be possible to reach an amicable settlement, in which case the European trademark courts may resolve the dispute.  However, this can be costly for all involved.

If, ultimately, you do decide it is best to withdraw your application in that particular country, all is not lost as you are free to file national applications in those European countries from which you did not face an objection.  However, there are no guarantees that those national applications would not face objections from other trademark owners.

A key issue when it comes to trademarks is what is known as the priority date.  Typically, this is the date on which you file your trademark application, and the date from which your registration is effective.  If you were to entirely withdraw your application following a dispute, and refile national applications, then you would receive a new priority date.  However, it is possible to convert a European trademark application into a group of national applications, and retain your original priority date.  An important advantage of doing so, is that your application will, broadly speaking, take precedence over others which were filed in the interim.

Still, converting a European application to national applications, or refiling directly in the relevant countries, can become very expensive as fees are payable in respect of each territory.  So, where resources allow, it is best to carry out appropriate searches in advance.  You can find out more about national, and international trademark registration on our dedicated website AzrightsTradeMarkRegistration.co.uk.

Intellectual Property & Change Management

Intellectual Property Rights and Change Management

Intellectual Property & Change ManagementIn any business there will be rules that management and staff need to follow.  Some will be more important than others. For example, to safeguard a company’s intellectual property rights, there are a couple of useful procedures that business might introduce. IP issues arise day to day so it’s important to manage them.

If a business outsources work or collaborates on projects with others it would do well to put systems in place so as to ensure valuable IP is not lost.  IP generally needs to be considered very early on.

Consider the inventor of the Karaoke machine.  He earned nothing from the billion dollar industry he spawned because he didn’t realise he could take steps to protect his invention so as to reap the benefits if it succeeded.  Specifically he could have patented his invention.  However, it’s not just patents that can have a far reaching impact.  There are other crucial IP rights like copyright which can be lost if you fail to take the right steps early on in a project.

In practice a simple rule requiring particular documents to be used before a company agrees certain terms with a third party makes the difference between protecting your brand or other IP and losing potentially valuable assets.  But is that the end of it or is it likely that sometimes your best laid plans will be ignored for one reason or another?

On 13 August Shireen Smith, founder of Azrights Solicitors, an intellectual property law firm, and author of the best selling book, Legally Branded, will be running a webinar to discuss this as part of a new series of webinars looking at law in its ‘real life’ business context.  Shireen will be joined by Suzanne Hazelton, author of two books, Raise Your Game, and Great Days at Work.  Suzanne is an expert in getting the best from people and processes.  She describes herself as a peopleologist as she works with the people in a business from a behavioural perspective.  She previously worked on projects such as software beta programmes within IBM, and so has a good understanding of why it is so important to have legal controls in place.  At the same time her background gives her a unique insight into the frustrations legal controls can give rise to for people within an organization, and so is ideally placed to advise companies, on how to successfully manage change.  During the webinar Suzanne will focus on what a company would want to do in practice, to ensure procedures are observed by staff, particularly in a fast moving, possibly multi-national environment.

The webinar will be relevant to companies, whether based in the UK or elsewhere, as the legal controls being discussed are likely to be universally applicable in most common law jurisdictions, such as the USA, and Australia to name a few.  The emphasis will be less on the law, and more on the need for procedures to protect IP.  So, the webinar will be relevant regardless of jurisdiction, for any business owner, or corporate in-house lawyer looking for insights into why procedures may be necessary to preserve IP, and what pitfalls they might encounter.  It will give you strategies to overcome the challenges ahead.

Apple granted a trademark over physical layout of the Apple Stores

Fifth Avenue Apple Store (Image courtesy of Wikimedia)

Trademarks can protect more than just a brand name or logo. Chocolate maker Cadbury successfully trademarked the shade of purple associated with the brand, while Coca-Cola famously managed to secure a trademark over its iconic Coke bottle. But, in typical ‘think different’ fashion, Apple has now gone a step further, and legitimately trademarked the physical layout of its popular retail stores.

Although not the first instance of a shop interior being granted a trademark, the news has attracted a lot of attention. The U.S Patent and Trademark Office twice rejected Apple’s efforts to trademark the store layout, before finally accepting a “distinctive design and layout” after additional documentation was submitted.

The stores are known for their sleek and uncluttered look. Apple reportedly spends an average of $10 million launching each individual store, usually located in carefully selected upmarket districts. Attention to detail is taken very seriously- the sandstone flooring is imported directly from Florence, while the late Steve Jobs even patented the minimalist glass staircases himself.

Apple’s new trademark covers the trade dress, and overall visual appearance of its stores in the United States. This encompasses elements of the store design, such as the “rectangular tables arranged in a line in the middle of the store” and “multi-tiered shelving along the rear walls”.

With so much investment to ensure the overall quality and unique identity of the Apple Stores, one can understand why Apple is so keen to prevent anyone else mimicking its stores. Competitor Microsoft recently launched its own retail store strategy, while Google has also unveiled plans to open retail stores in California. In fact, Microsoft reportedly acquired a trademark for its own stores in 2011, which covered “a retail store with four curved tabletops at the front and rear side walls and a rectangular band displaying changing video images on the walls”.

Another obvious reason behind Apple’s move is to protect itself against the cheap ‘copy-cat’ stores popping up in China. These stores are deliberately conceived to fool customers into thinking the traders are selling official Apple merchandise. Indeed, many of their customers may have never set foot in an authentic Apple store, and would be unaware they were buying false products.

While the decision clearly benefits Apple, some commentators question if it is appropriate to grant companies trademarks over the layouts of retail stores. Forbes  has criticized Apple’s ability to prevent competitors using in-store rectangular tables, and argues that in the fight against Asian rip-offs, the law of passing-off is sufficient to defeat copy-cat merchants, without resorting to trademarking physical spaces.

But while this argument is valid, proving a passing-off claim is often much harder and more expensive without an established and watertight trademark. With an army of handsomely paid corporate lawyers, Apple is leaving nothing to chance.

Many business owners and company directors are calling for legal reform, to further assist businesses to protect their carefully nurtured brands without resorting to costly litigation. However, some fear that companies would soon monopolise combinations of fairly simple features. IPKat points out, that UK law is far stricter when granting trade dress, as the test requires a mark to be “truly distinctive”.

For the Apple Store layout to acquire a trademark or trade dress in the UK, Apple would have to demonstrate the stores were so unique and distinctive that the public would easily associate the store designs with the Apple brand. Clearly, for most businesses, attempts to secure a trade dress will not be viable. And as the law currently stands, it is difficult to protect distinctive features of a shop layout without engaging the expensive litigation route.

In the high street, distinctive stores can be beneficial. Customers are able to immediately identify store branding and associate particular shopping experiences with particular stores. Therefore, as branding becomes increasingly important, the expansion of legal protection over unique in- shop experiences is likely to be sought out. But until it becomes easier to protect others from copying the interiors of a retail business, the easiest option for most business will be to rely on printing their trademarked brand names or logos on various surfaces throughout the store to act as identifiers which are protected against copying.

Licensing- Don’t Risk Losing Your Trademark

Licensing – Don’t Risk Losing Your Trademark

If your business has reached the stage where you are looking to expand abroad or diversify into different markets, licensing your brand could be the ideal way of achieving this.

With licensing, it doesn’t matter if you haven’t the staff or the money to fund your expansion.  You license your brand to a third party that already has the staff and resources available within the target market in which you wish to expand.

The positives are many: it can be a lucrative move and can generate additional revenue for your business; it can increase your brand awareness; and it can help create new products for your brand without running the risk of failure on your part.

Licensing

Licensing Without Controls

However, licensing has its downsides, too, which can be exacerbated if you don’t manage your licensing effectively.  One of the biggest concerns to be aware of is loss of control.  So, whilst licensing can boost your brand’s strength, it could equally damage your brand’s reputation.

This is the risk you run if a third party is licensed to use your brand without any restrictions.  It’s not just your brand’s reputation that could be damaged; in some cases, a lack of monitoring on how a third party is using your brand name could result in you losing the rights over the name.

Eva’s Bridal Shop

Take the case of Eva’s Bridal Shop in Chicago .  In 1966, Eva Sweis opened a bridal shop under the brand name, Eva’s Bridal.  The brand built a reputation for providing top quality goods and services.  Eva obtained trademark rights in that name.

The trademark was used for generations; friends and family were allowed to set up bridal shops under the Eva’s Bridal label.  But in 2007, Eva’s Bridal attempted to take legal action against a former licensee for trademark infringement as he was using the trademark after the license had expired.  On the surface, this appeared a fairly simple case of infringement.

However, the original licence agreement exerted no control over the way the trademark was used, and the court ruled that this therefore eliminated Eva Bridal’s trademark rights in that name.

This is because licences over a trademark granted without any regulations or restrictions, are considered to be abandoning the trademark, no matter how long you may have previously had the rights over it.

Therefore, it is vital to ensure when you license a trademark to a third party, it is  not just an agreement stipulating how much you are licensing a trademark for, but also to ensure you have control over the way the trademark is used.

Trademark as a Symbol of Trust

Trademarks are there primarily to indicate to the public the origin of goods, and to protect them from confusion.  It enables the public to rely on a brand as a signifier of quality, or standard, and is a symbol of trust.

Therefore, if you are planning on licensing your business, be sure to introduce quality controls, and limit the distributor’s rights to sub-license the trademark.

How to License Effectively

The first consideration when approaching a licence agreement is to describe what is being licensed, and to take account of the extent of your trademark portfolio.  What specific products or services are covered and in which geographical areas?  Who will be responsible for filing further trademarks, and who will bear the cost of these?

As a general rule, it’s important for you, the licensor, to retain responsibility for the trademark registration.  The licence will be for a specific period of time and may impose a number of conditions.  In return, the licensee agrees to pay you royalties and is willing to do so because you have something that’s popular.

Licensing can be an invaluable tool to some business owners wishing to expand their brand, so, it is essential to make sure that licensing helps rather than hinders your business.

If you have had any experiences of licensing which you would be willing to share, I’d love it if you left a comment below.

Do you need to bother with trade marks?

Since writing my book, Legally Branded, a number of business owners have thanked me for making this fundamentally important subject of intellectual property (particularly trade marks) understandable.

Some entrepreneur friends have even  suggested I emphasise the risks, and danger of ignoring intellectual property advice.  However, I’ve always tried to steer clear of scare mongering as a tactic to raise the profile of intellectual property, preferring to work with those clients that “get” the importance of intellectual property.  Our clients are the ones that get it, even if they’re not in industries where IP is obviously critical to their success.  They value their IP from the moment they start their businesses as did our client Headspace, for example, who are doing great things to make meditation accessible.

I recently attended a meeting with a business owner whose mind was firmly made up that there was no point paying expensive lawyers to give advice on IP.  I had agreed to meet with him at the request of his marketing manager who understands the importance of IP and hoped that someone more aware of the ins and outs of IP may be able to persuade his boss.  However, this business owner’s views did not shift one bit as a result of our meeting mainly because he talked far more than he was willing to listen, and his mind was already made up.  So, I know better than to try to address those whose minds are already made up that they know all they need to know about IP.

This is for readers who are curious, or undecided

This post is for those who may be curious, or who are still on the fence about whether it’s worth bothering with trade marks.  While it’s never a good idea to generalise about who does or does not need IP, I will stick my neck out and say that if you’re a lifestyle business (by which I mean you’re aiming to earn a livelihood and are not trying to build a big business or one you can ultimately pass on or sell) you can ignore trade marks.  You’re unlikely to come to anyone’s attention, or pose a threat to existing trade mark owners such that they would want you to rebrand for infringing on their rights.  Even if someone did require you to rebrand, chances are it will just be an inconvenience to change your marketing materials and rename the business.  You won’t have a name that attracts business, so could rename the business without suffering a drop in activity.  Similarly, if you’re setting up a business and want to first see if it will take off, then you MAY, depending on your business idea, be able to use a temporary name, or take a chance with the name you want to use (provided you’re willing to change it if the advice is that you would do better to choose an alternative name), and see if you can get anything off the ground before worrying about trade marking.  But for everyone else, it would be really foolish not to get trade mark advice from a specialist lawyer on the name you’re using.

Trade marks may be revoked

Trade marks can be cancelled, so even if you’ve secured a trade mark registration it doesn’t mean you’re alright to use that mark.  That’s why it’s misguided to do your own registration work, just to save on legal fees.  You may end up getting a registration, but it may not be for a mark that is capable of generating brand value.  You may not have an adequate scope of coverage, so that although you’re registered, it may not protect you if someone were to challenge your rights.  For example, registering a logo with a totally descriptive name – that is, one that describes what the business does – is easy enough to secure.  However, it’s an extremely poor choice of branding.

The law protects businesses against various unfair competitive practices, and helps you fight off competitors who use similar marks to yours, but you have very limited recourse with a descriptive name.  Using a descriptive name or a name that is otherwise incapable of being owned by you as a trade mark, leaves you wide open.  You will lose business that may have been intended for you, and you will have a business that is far less valuable than it might have been had you selected a legally powerful name.  This is the reason you should always consult your own IP lawyer on any name your branding professionals help you to choose, unless they are willing to take responsibility for its legal effectiveness.

Keyword rich names probably best avoided 

Also, take a look at the blog I wrote about Google’s recent algorithm change, which makes it even more of a poor decision to use descriptive names now online.  The writing is on the wall, so I would avoid choosing keyword rich names too when branding your business online.  The slides from my talk at Make It Big in 2013 also discuss descriptive names more.

Get legal advice

Even though you get some protection in this country just by using a name, don’t let that lull you into a false sense of security.  For example, if someone registers a Community Trade Mark they can stop you using a name you’ve been using, or limit you to using it only in a certain geographical area.  Why court the vagaries of litigation with all the cost implications when you can secure your rights in a name you’re getting recognition with, by paying ten times less?

Trade marks and legal advice should not be dismissed as too expensive to bother with for anyone who has a viable business.  They are an investment, and are the foundation for licensing and other ways of monetising your products and services.  In particular, don’t wait till you have reached certain turnover targets, because trade marks are fundamentally relevant to any business that aspires to be more than a lifestyle business.  Your business name is what the law protects when competitors behave unfairly.  So, trade marking is good business practice and isn’t just about whether you intend to become a brand, or think that if you sold your company whoever bought it would want to use your brand name.

Misunderstanding IP

There is a lot of misunderstanding about the relevance of IP, and huge generalisations are made about its costs.  But given that there are many different IP rights, of which trade marks are just one type, it’s foolish to dismiss them all as too expensive.  Knowing how to implement procedures to protect just one of these rights may be the critical element to your business success after all.

I think the problem is down to the complexity of IP law.  We are still in a transitional period between an industrial economy and a knowledge economy.   Consequently knowing how to deal with the physical things, the tangibles comes easy while intangibles that you can’t feel or touch, are less well understood. Intangibles are our knowledge, our brands, our digital content, and more.  By their very nature, they are easy to lose. Being transient, and non-physical, their legal significance can sometimes be overlooked or misunderstood.

Scrabulous and other high profile cases

The fact is that it can be difficult for lawyers to point out the benefits of IP except by pointing to situations where there have been well known incidents, such as with Scrabulous, which I discussed in a post recently.  Those of us IP lawyers who prefer to focus on the positives, won’t therefore want to keep pointing out the dangers, but I have outlined a number of scenarios in my book Legally Branded, which should help you better understand the risks.  Don’t assume that just because big businesses like Apple resolve their IP issues, that you will do so too.  People should know that for smaller businesses, the scenarios they hear about in the news about the Googles, Microsofts, Apples of this world would put them out of business because they would not have the resources to get themselves out of trouble.

So the moral is if you are a small business without access to huge sums of money to litigate your way out of  trouble then you absolutely need to make sure you avoid the problem in the first place by getting professional advice to register your trade mark.

Also, if you’re going to ignore IP protection, you need to know what you’re doing.  It could in some cases be rather like deciding not to bother with the foundations of a house you’re building.  In television programs like Grand Designs, the participants who overspend may end up not having enough money to do all the fine design details they had wanted.  Their  lack of funds means they have to compromise on the surface issues like designs.  They can’t compromise on the very structure and foundation of a building.  Unfortunately, the opposite approach happens in business when IP is ignored.  People can spend a fortune on the surface things like branding and websites while ignoring the fundamentals.

Distinguish IP from other legal work

While there are some legal issues you can and should skimp on in the early days of a business, IP isn’t one of them.  Note that IP is very often a contractual matter, and isn’t just about registrations.  So, take advice to see how to minimise your IP expenditure in a safe way if you think spending on IP may seem a waste.  Some business owners question any expenditure which doesn’t enable them to make money (such as learning a new marketing trick would increase their  chances of generating revenues).  However , think of IP as what enables you to keep the money you make, and in some cases to continue to earn revenues. So at the very least you absolutely have to take advice in order to develop your strategy for IP.

How To Secure An Unusual Trademark

Whilst the most common use of trademarks is to legally protect brand names or logos, this is by no means the only way in which a trademark reinforces a brand.

Trademarks act to identify the source of a good or service to consumers, and therefore a trademark can cover any aspect of a brand that denotes a particular company in the mind of consumers. For example, as mentioned on the Azrights blog Cadbury secured the colour purple as a trademark, Coca Cola has trademarked its iconic glass bottle shape.

With the Internet making competition ever more fierce, and difficult for brands to stand out, securing an unusual trademark could help give your company that added distinctiveness which competitors could not emulate. However, securing an unusual mark is not straightforward.

The way Coca-Cola was able to get a monopoly over its bottle shape demonstrates what can be involved in securing an unusual trademark.

Coca-Cola & its distinctive bottle shape

The design of Coca-Cola’s instantly recognisable glass bottle is highly distinctive. Even feeling the contoured bottle shape in the dark can be enough for the identity of the brand to be instantly recognised. Coca-Cola’s bottle shape helps it to stand out from the crowd because no other drinks manufacturer is able to copy its bottle design.

However, this is something that the company has had to gradually achieve over a number of years.

In order to be granted a trademark for the shape, Coca-Cola first protected the bottle design with a registration which gave it a monopoly over the design.  In the EU a design registration gives you a maximum of 25 years protection. Therefore, although a design registration is effective in the short-run, in order to ensure long term exclusivity Coca-Cola needed a trademark.

In order to get a trademark granted Coca Cola had to make sure the bottle design was associated in consumers’ minds with its name.  So, the bottle needed to be identified with the brand whenever they saw the bottle. To achieve this, the company promoted the bottle heavily during the time it had design protection.

Once consumers did identify the bottle shape with Coca-Cola the company was able to secure a trademark over the bottle shape.  This means that as long as Coca-Cola renews its trademark, and uses the bottle shape, no other company in the world can use such a bottle shape.  That is very powerful IP indeed.

How you can secure an unusual trademark

So if your company wants to gain a monopoly over a particular brand identifier, make it can become synonymous with your brand.  You’ll need to put appropriate intellectual property rights in place in order to stop competitors copying your branding in the meantime. So, if you want to associate a shape with your brand, make sure you register it soon enough, using a series of images to properly protect the design first.  If you have an effective registration that can give you a monopoly over the shape for 25 years, then vigorously promote the design as something that is synonymous with your brand. For those on a smaller budget, social media may make it more affordable to achieve such a task without breaking the bank.

If you want to secure a trademark in a colour, or other unusual identifier, let us know by completing our enquiry form. In the meantime, if you want to learn more about the legal aspects of branding why not buy a copy of Legally Branded, a book that explains the relevant law in an accessible way?

Branding For Success

I presented this presentation at Triumphant Event’s one day ‘Make it BIG in 2013′ event on November 24. For those who missed it, here is a transcript of my speech along with the accompanying slides.

To thrive in a crowded market, a business has to be clear about its niche, positioning, brand values – its whole identity – which should then be reflected in appropriate designs. This is essential if you’re to become a brand in the sense of having pre-sold clients who want to do business with you.  That’s how you stop having to compete on price.  However, what is less well-known is that there are fundamental Intellectual Property issues that must be addressed if you’re to reap the benefits of your success.  I’ll be discussing some of these IP issues in the next 20 minutes as they’re important if you’re aiming to make it big in 2013.

I’ll just say a few words about my background before I begin. I’ve practised IP law for nearly 15 years, having qualified as a solicitor more than 25 years ago.  I worked at Coopers & Lybrand, Reuters, and Eversheds before setting up my own law firm 8 years ago.  Going into business on my own made the legal work really enjoyable in a way it had never been before.  I love helping businesses to bring their ideas to life and one area of my focus is on names, as they raise a number of legal issues, some of which I’ll touch on here.

Inevitably when you work in an area you spot problems, and one I’ve noticed is the widespread confusion about what ‘branding’ actually is.  To a designer a brand is the logo.  A marketer may emphasise the niche, and positioning, while a communications professional will stress the importance of consistent messages, and an IP lawyer will emphasise trademarks and copyright.  The fact is that the skills of many different professionals are relevant to branding.  So it’s not surprising that people don’t really know who to turn to, and in what order when they brand new products and services.  And that includes people in the branding industry. A very experienced and well-educated marketing director contact confessed that he didn’t really know in what order to do things when he wanted to create a new brand.

This explains why companies so often make mistakes with branding. In practice, they’ll pick a name they like, see if the domain is available and buy it, then they’ll commission someone to produce a brand identity.  At the very end of the process they may or may not turn to a lawyer to protect the brand. Some people do nothing at all, while others might register a trademark themselves.  This puts a business at great risk of either using a name which infringes on someone else’s rights or of using a name that’s inadequate to meet the wider long term business objectives.  The reason the risk of infringing a name is quite high is that the trademark registers are cluttered with registrations so that it can be difficult to find names that are available to use for the various purposes for which you may need to use the name. Also, using similar names to those which someone else has already trademarked is an infringement, so it’s not just the exact same names that are out of bounds.

It’s worth knowing that if someone else has a better right to a name you’re using, you would be infringing on their rights whether or not you may have registered a domain, a company or even a trade mark.  Registrations can be and are cancelled. The owner of a similar trademark may not be aware of you or may not be concerned while you’re a small scale operation.  It may be a different story though if you make it big.  Imagine what it would feel like to receive a cease and desist letter requiring you to change your name immediately, to provide a list of your customers, sign an undertaking and pay damages.  From the perspective of the trademark owner, you only achieved your success because you were riding off the back of their brand, so it’s fair enough to ask you to account for the profits you made during the time you used their brand name.

A name is where your brand both begins and ends. It’s the first thing customers hear when they discover your business, and the last thing they remember at the end, so it’s vital to own the rights in your brand name.  Intellectual property law is similar to the law of physical property.  If you were developing a plot of land you’d be sure to buy the land first before investing in building on it. The last thing you’d want would be to run the risk  that someone else had better title to it.  It’s the same with intellectual property rights over a brand name.  Don’t assume the professionals who may have helped you to brand your business must have taken care of the IP aspects because it’s unlikely they’ll have done so.  Their expertise is not in IP law.  I wrote my book Legally Branded, because of the widespread lack of accessible information on the IP aspects of branding.

It’s not possible to have copyright in a name, no matter how much money you may have invested in creating a name. Trademarks are the only way to stake your claim to a name. Trademarks are tools to capture the economic potential in your business, and are central to how the law protects a business against unfair competition.  Trademarks give you legal title to a name, and exclusive right to use it for your business.  This makes it easier to enforce licensing and other agreements.  Some entrepreneurs assume trademarks are just about protecting goodwill, but they’re much more than that.  The reason a trademark is desirable is to monetise your business.  You don’t need to be intending to be the next Coca-Cola for trademarking to be relevant to your plans.  If you have a big vision you’ll need trademarks to grow the business, both nationally and internationally.  The right strategy for registration will differ depending on your business plans and the type of business you’re in. With some niches you are very vulnerable unless you are quick to register your mark in other countries once your concept takes off.

Trademark infringement is something I come across a lot because it’s quite common given the way in which business owners pick names.  So, it’s a real risk not just a theoretical one.  Having the distractions of potential litigation and rebranding is not a risk any sensible business owner should run.   I don’t want to depress you, but it’s important to realise that you could be sitting on a time bomb.

Let me give a couple of examples. Mcdonald’s takes a somewhat aggressive stance to users of the ‘Mc’ prefix.  So Elizabeth McCaughey had to stop using the name McCoffee for her coffee shop even though she had operated for 17 years with that name, and used the name in the first place because it was a play on the word in her own name.

Some businesses that are infringing on the rights of a trademark owner have to rebrand virtually overnight.  For example, Scrabulous one of the first Scrabble like games on Facebook was removed by Facebook as soon as Hasbro complained about trademark infringement despite having gone viral. We will never know how big Scrabulous would have been today if it had opted for a better name. The setback cost them dearly as it paved the way for Zynga to enter and dominate the market with its successful Words with Friends app.

A different aspect to consider about the name you’re using is whether it’s capable of taking your business to the heights you envisage for it.  For example, using a name that says what your business does on the tin, so to speak, often appeals to people. But there are powerful legal reasons why a descriptive name should be avoided.  Descriptive names inevitably limit a business’ potential.  They’re only suitable as an option in the early stages of a business that’s testing the waters with a new concept, and wants to avoid trademarking considerations, and to benefit from a name that communicates what it does.  However, a better name should be chosen as soon as the concept proves viable. A descriptive name is actually devoid of personality.  It’s like calling a dog, dog.  You’re not giving that dog its own unique name, and identity, and it’s no different when branding a business.  A trademarkable name protects consumers by providing a reliable way for them to find products they’ve bought in the past.  If I’ve enjoyed a chocolate called Milky Way, and want to buy another one, I should not be confused by seeing chocolates with names like Mulky Wai.  The law will stop other traders calling their chocolates by a name that’s misleadingly similar to Milky Way, but if the chocolate has no name, because it’s simply called chocolate, the law cannot and will not stop other chocolate sellers also calling their chocolate bars ‘chocolate’.  So, if a competitor starts using the same name or a similar name to yours, there’s little you can realistically do to stop them if yours is a descriptive name and you inevitably lose some of your potential customers to competitors.

To understand the limiting effect a descriptive name could have on a business let’s use a fictitious example.  Say there’s a website which connects dog owners looking to leave their dog with other dog lovers instead of in kennels when they’re away on holiday. If the website were called Dog Vacation it could be deemed descriptive. If the name couldn’t be trademarked, the website’s success couldn’t be fully exploited through licensing others internationally to set up and run similar websites in their home market. In fact, such a niche website has been created just in the past year in the USA, and luckily its name is capable of legal protection because it’s called Dog VACAY, not Dog Vacation.  This business currently has a multi-million dollar value mainly due to the lively and active community of dog lovers it has given rise to.

Apart from licensing people in other countries, exploiting the value in an engaged community, such as Dog Vacay could include extending the brand into areas such as pet foods, pet furniture and accessories and so on by licensing others to apply the brand name to their products.  So the bottom line is that licensing depends on having a name you can stop other people using.  You would register a trademark in your home country and then ultimately in other countries if you’re to avoid seeing your business copied by unlicensed individuals elsewhere who may even use the name Dog Vacay unless the US company has been astute enough to register a trademark in other markets as well as in the USA. It inevitably reduces the value of your business if you can’t properly control use of its name.

There are a number of do’s and don’ts around what makes for a good name, but the most important thing to remember is that a name must be legally effective, and capable of getting you to your destination.  It’s not just about whether you like a name or whether it sounds good or even whether it is capable of being trademarked.  It needs to be a name that suits your business plan and objectives. One reason businesses have been attracted to descriptive names in the past, is that Google historically looked favourably on domain names that included relevant keywords.  For example, dogvacation.com would be likely to come up in a search for “dog vacation”.  However, Google discovered that this led many low quality webpages to appear in search results, as marketers were taking advantage of descriptive domain names to increase visibility.  In response, in September Google tweaked its algorithm to give less weight to domain names which are an exact match for a search query, so even this limited benefit is no longer a worthwhile reason to use a descriptive rather than distinctive name for your business online.

Zumba the dance is a great example of an effective name for a business that spread like wildfire internationally, as well as extending into all sorts of different categories like DVDs, clothes, and so on. So, make sure you’ve got the right name if you want to make it big because the wrong name will put a ceiling on your ultimate business growth, no matter how good a business you build, and how effective you are as an entrepreneur. Once you have a powerful name, put in place appropriate IP protections and a strategy for international trademarking.  That’s the way to bulletproof your brand so there are no limits on how your business can grow once it captures the public’s imagination in 2013.  I wish you every success in the upcoming year.

If you’re interested in learning more about this topic, why not buy a copy of Shireen’s book Legally Branded which is available on Amazon? You can download the contents and the first chapter free at www.legallybranded.co.uk.

if you’re interested to understand this topic more why not buy a copy of Shireen’s book Legally Branded which is available on Amazon, and you can download the contents and first chapter free at www.legallybranded.co.uk

What Businesses Can Learn About Branding from ‘The Importance of Being Earnest’

The imporance of being Earnest - Oscar WildeClassic pieces of literature are often classics for a reason, and whilst some of them may have been written hundreds of years ago,the wisdom they can impart is extremely relevant even now. So with this in mind, what can we learn from Wilde’s famous ‘The Importance of Being Earnest’? And specifically what branding lessons can we learn?

The Importance of the First Impression

‘Something tells me that we are going to be great friends. I like you already more than I can say. My first impressions of people are never wrong’

We may have left the Victorian times behind, but first impressions still carry a lot of weight in our modern day society. For example, in a first meeting, often a person’s handshake, the way they dress, and the manner in which they speak all add up to inform our initial opinion of them. And often these first impressions can be extremely difficult to change.

Much like when meeting people, a lot of how we judge a business is based on our initial impressions. One of the main reasons to create a brand in the first place is to establish a business that customers trust, and often that first impression can be integral to whether you manage to build and maintain a loyal customer base. Remember the news about Apple treating its workers in China inhumanely? Apple’s brand was surprisingly unaffected by these reports because it already had an established strong brand with a loyal customer base. If this had been our first experience of the company we may well have written the company off from the very start.

The importance of the first impression has in fact only increased with the Internet, where people’s attention spans have decreased to the point where a mere few seconds is probably all you get in order for someone to decide whether or not to use your products or services.

A brand’s name, logo, website design, and first telephone interaction can all influence the opinion a potential customer forms about it- get these elements right and this could act as a stepping stone to creating a loyal customer, or get it wrong and the potential customer will go elsewhere.

The Importance of a Name

‘My ideal has always been to love someone of the name of Ernest. There is something in that name that inspires absolute confidence.’

Often the very first encounter a potential customer will have with your business is with your company’s name, as this is where a brand both begins and ends.

Wilde does use the theme of the name ‘Ernest’ to mock the superficial way in which people in Victorian times formed their decision whether to marry someone –  but we can still learn a lot from Gwendolen and Cecily’s desire to place so much faith in a name.

A name does indeed carry certain connotations, and is far from being just a randomly arranged set of letters. Names have meanings and can evoke certain reactions and responses.

A name represents a business’s image and reflects what a business will be like. Is your company fun and innovative or more traditional? FCUK might be a good name for the clothing line aimed at a younger crowd, but would you ever consider calling an insurance company something like this?

A lot of the big well-known companies have put a lot of thought into their names- Google based its name on a mathematical term, whilst Amazon chose its name due to its association with the South American river, whose size they wanted to mimic in their desire to offer the largest selection of books in the world.

Get the name right and you could put yourself on the road to building a stand out brand- get it wrong and you might unwittingly be losing customers. (To find out how to protect names see this blog post: Is a trademark necessary for your business?)

What makes brand names particularly tricky is that quite apart from fulfilling this marketing function, the name has to be legally available, and suitable for the business plans of an organisation.  For example, if you’re intending to license the brand and extend it into other categories so as to offer merchandise, the name has to be distinctive enough to be available to register as a trademark in the various categories and geographic markets in which the brand will be sold.

The Importance of Being Authentic

 ‘I hope you have not been leading a double life, pretending to be wicked and being really good all the time. That would be hypocrisy.’

One of the most important aspects of building a stand out brand is the need for authenticity. Even if a company makes an excellent first impression, and has a perfect name, if it is inauthentic in its actions the positive first impression will quickly go sour and the perfect name will suddenly be filled with bad connotations.

In order to really ensure a brand builds a loyal fan base it has to be consistent and authentic in its actions. If a business sells itself as being ethical, but then it is discovered to be testing its products on animals, this would be bound to lose it some followers. Something similar actually happened to the Body Shop after it was bought by L’Oreal a few years ago.

A brand is about delivering on a specific promise- it is something a business is known for doing. As the above quote shows, it is hypocritical to pretend to promise one thing and do another in reality. Therefore if your company makes a promise and promotes itself as being one way, make sure all the company’s actions, whether online or offline, are consistent. That means if your company prides itself on quality- make sure everything down to the paper you send letters on, all reflect this quality.

Conclusion

A surprising amount can be learnt from Wilde’s comedy. So take these branding lessons and remember to always make that first encounter count.  Never dismiss the importance of a name, and finally, never forget the importance of being earnest.

One of the services we provide is branding consultancy, so if you are setting up a new brand why not have a preliminary no obligation discussion with us to find out how to go about it correctly?   Send us an enquiry to fix up a time to speak or buy a copy of Legally Branded which will tell you all you need to know about creating a stand out brand that is legally protected.

This post was co-authored by Chloe Smith

Plain packaging, lessons to learn from the (possibly) coming tobacco identity crisis

I recently enjoyed a debate with an economic consultant friend of mine on the implications of plain packaging for cigarettes.  As an occasional smoker myself, I was very interested in what proposals to restrict branding opportunities for manufacturers might mean for my own habits.

A study by the British Brands Group found that removing on-pack branding would “make it harder for consumers to identify the brand at the point of purchase” and that “This has the potential to distort competition by focusing attention on price rather than quality, opening up the prospect that a regulation intended to reduce demand might perversely increase demand and sales if the intensification of price competition leads to lower prices and reduced average quality”.  Although increased demand might sound promising for the industry, the authors suggest that not only would the tobacco sector lose out  from smaller revenues, but so would the government, through a reduced tax take.

An important policy consideration identified by that study is the problem of parasitic copying, and the crucial role of regulation in protecting intellectual property: “the branding and packaging investments made by established brands can be undermined by copycat products free-riding on these investments and diverting sales … so distorting competition”.  This reminded me of a series of adverts I’ve noticed recently, I caught the below image in the New Statesman, and it was also in the Daily Telegraph:

The point being made by Japan Tobacco International was that plain packaging will make it more difficult to identify counterfeit cigarettes.  The ad argues that this would “be a dream for organised crime, but a nightmare for everyone else”, noting that fake cigarettes have been found to contain undesirables such as ground glass and even rodent faeces.  In the same edition of the New Statesman, Imperial Tobacco had taken out a full page advert, claiming that plain packaging will “make life easier for counterfeiters” and threaten the livelihoods of those directly employed in the supply, distribution and retail of tobacco.

On the other side of the debate, the Guardian offered an interesting perspective recently, arguing that “introducing plain packaging for cigarettes could certainly help to reduce the brand marketing appeal of cigarettes to teenagers”, and so stop them developing a habit in the first place.  The article points to research by the University of Stirling’s Management School, which led to a government consultation on standardised packaging.  That research is far too comprehensive to summarise here, but some of the issues it highlights include five ways in which the visibility of branded packaging may function as a marketing tool:

  1. By acting as an advertisement at the point of sale
  2. By making cigarette use appear ubiquitous, and more normal to consumers
  3. By inciting cravings in smokers who want to quit
  4. By ensuring long term loyalty from new users by “providing favorable and compelling images they can continue to experience”
  5. By reducing the effectiveness of health warnings, by reducing their potential size, and due to competition from ‘eye-catching’ logos

Conflicting views abound, and the findings of the British Brand Groups’ study, mentioned above, were echoed by London Economics in a report which found, by employing online simulation techniques, that “If consumers can’t differentiate between brands in the market, they opt for cheaper brands, whether it’s beer, cigarettes or almost any other product. If manufacturers respond by competing on price to maintain market share, prices may decline.”

So, perhaps intuitively, as prices are reduced traditional thinking suggests that demand will grow.  I’m no economist, but from my own experience I suspect that, if I found it more difficult to identify premium brands, and was less affected by their marketing at the point of sale, then price would have a greater impact on my decision.  As a result I might tend to buy cheaper cigarettes, and have no difficulty in accepting that this means I might buy more cigarettes.  On the other hand, I also believe I get satisfaction from knowing I’ve opted for a premium brand, and I’m sure the appeal of the packaging holds some sway in my decision.  Which of these factors will have the stronger impact I don’t know, but it’s a moot point given that I’ve made up my mind to try and stop altogether, and hope to have done so before plain packaging arrives.

Opinion is clearly divided on the economic implications, but a common thread throughout is the resounding importance of branding.  There is an important lesson hiding in plain sight here – though much of the comment is focused on how effective standardised packaging will be in reducing tobacco consumption, the more widely applicable analysis tells us how vital it is to growth, or even survival, that businesses are free to differentiate their products from those of competitors.  On the one hand, a failure to differentiate yourself may mean a race to the bottom on price, increasing demand but destroying your margins, and on the other it risks hampering sales and loyalty because your products are less memorable, and lose some of their glamour.

It is surely a good idea to tackle smoking, and standardised packaging may or may not be one way to do this, but for businesses which are not subject to such regulation, what is clear is that ownership of your brand, as secured through trade mark registration, and the freedom to leverage that brand to set yourself apart from competitors, will help you to get ahead.