While every agency understands how to use the creative process to create a brand name, few understand the legal implications of choosing one name over another.
Turning an idea into a business involves creating intangible elements like names. As these are governed by the law of intellectual property it means you are creating intellectual property.
Specifically, trade mark law protects names, and so one implication is that you need to choose a name that meets the requirements of the law.
To fully understand the impact of getting this right on both the agency and client side, it is worth reflecting on what value a brand brings to a business.
Value of a brand
A brand name is of the most valuable assets a business will have.
According to Forbes, the most valuable brand name in the world in 2017 was APPLE. It was worth $170 billion. GOOGLE takes second place, at $101 billion and MICROSOFT in third place, at $87 billion. Three words – APPLE, GOOGLE, MICROSOFT together are worth about $360 billion.
Just think about that for a moment. The world’s top three brands are worth many times the average country’s entire GDP (or annual economic output). That’s the value of a good brand name.
Based on the value of the world’s biggest brands, a good brand name needs to be:easy to pronounce and spell
• one that works internationally
• one that copes with business expansion or change of direction.
• one that is legally available
The final point is most important here.
The trade mark registers are cluttered, and the best .com domains are often already taken. Therefore, choosing a name invariably involves doing some due diligence.
An agency tasked with creating a name should really put forward a shortlist of 3-6 names for full legal clearance if the client is to stand a chance of finding one name that it may use.
Getting this wrong may not just mean the trade mark application is thrown out. The client may find itself on the wrong end of an enforcement action by another business whose trade mark is being infringed.
A name that infringes on someone else’s mark leaves the client with little choice but to rebrand. Some clients might sue an agency that created the identity for them, or require a free rebrand. Quite apart from the reputational damage for the agency, a name that the client can’t use would prove as problematic for the agency as it would for the client.
Not only is it worth getting this right to protect your agency, it also offers you an opportunity to deliver certainty and differentiation from other agencies who are less aware of the consequences.
An agency’s responsibility when creating a brand identity
When a client engages the services of a branding agency to create an identity, that agency is an adviser, and as such, is expected to understand the surrounding law.
While the agency might tell a client that certain actions that are required to clear a name for use should be undertaken by lawyers, it’s not possible to completely absolve itself of responsibility simply because some of the work involved in clearing a name is done by lawyers.
There are two levels of checks for brand names that should be undertaken:
1) Basic preliminary checks – often these do not require a lawyer and can be done through simple searches
2) Full clearance searching – in most cases done by lawyers
I’m of the view that while lawyers are always best placed to undertake full clearance and this is clearly the responsibility of the client, basic preliminary checks can and should be performed by the agency as part of the process of developing names.
This seems not to be the prevailing view.
One designer recently said to me that she does not believe she is responsible if a client of hers has problems with a name she selected for the client and the client decided not to register the name as a trade mark. According to this designer, if the client chooses not to trade mark the name then it’s the client’s fault if it later transpires there are problems with the name.
Quite apart from the fact that registering a name as a trade mark in no way helps if the name is not available to use, I have deep problems with this view. Protecting a name isn’t just about registering it as a trade mark. It’s more about checking that the name may be safely claimed.
If an agency is entrusted with creating a new brand identity, it’s reasonable for the client to expect that you will offer up names they have a fighting chance of using. This means doing some of the trade mark searches yourself, albeit leaving the full clearance searching to the lawyers.
While specialist full clearance searches might be left to the client to arrange with its own lawyers, any business choosing a new name for its clients does have a responsibility to ensure the name is legally available.
Understanding the legal requirements is essential if the selected name is to stand up to legal scrutiny. There are a number of searches that agencies should and could perform on a name – beyond a simple Google or .com search, which is often all that is done. If you fail to provide names which don’t even stand up to the most basic legal scrutiny, what is the client paying for when it pays to have a name created?
And, importantly, how does that reflect on your agency if a problem later arises?
The client’s responsibility when protecting their brand identity
Many clients don’t ask lawyers to do full clearance searches before applying for trade mark protection simply because they don’t realise this is an essential step in the process, rather than an optional step.
As clients frequently choose to not do further searches on names, (possibly because they have spent all their available budget on the brand identity work), it’s even more important for branding agencies to do “good enough” checks of names before proposing them to clients. Otherwise, what’s the point of branding a name the client can’t own? It would be building their business on a foundation of sand.
On one occasion when we were provided with a shortlist of six names by a designer, we found that the most basic search of the trade mark registers knocked out four of the names immediately. So, effectively, the client only had two names to choose from, and they were not the first choices on the list.
I hate to think what might have happened if the client hadn’t asked us to do clearance searches on the names. It might have gone with one of the names that were infringing with all the associated problems and risks.
This is why I would urge agencies to learn how to do some basic checks of the trade mark registers whenever they are creating a new identity for their clients. Indeed, a good agency should also perform its own checks on a name the client proposes using, even if the agency didn’t choose the name.
Again, it’s important to remember you’re not protected simply by virtue of registering a trade mark.
Taking steps to protect intellectual property
The identity of any well-known brand comprises a variety of elements. Trade mark law encompasses the name, and also any taglines, slogans, logos, designs, product shapes, sounds, smells, colours, and other features that distinguish a product or service from its competitors.
Bear in mind that whenever you turn an idea into a product or service you’re also creating intellectual property assets. Copyright law is highly relevant in brand creation. Therefore, copyright and other intellectual property issues need to be top of mind in the early stages of identity creation.
However, the primary identity of any successful brand is inevitably in its name. Protecting the future value of a business involves protecting the name, and also taking account of IP as a whole.
An agency should create internal processes to ensure names are properly checked out before any short list of names is offered to the client.
There are three steps that any business should take to protect its intellectual property if it is to build value, and avoid disasters such as the need to change its identity.
Imagine having to rebrand due to problems with a name or copyright work. While this might seem unimaginable for the likes of the world’s top brands, problems around names and IP can affect even them.
For example, Microsoft had to rebrand after being ordered to do so by a UK court for infringing on a trade mark owned by British Sky Broadcasting Group (BSkyB).
”Changing the name of a product as loved as SkyDrive wasn’t easy,” Microsoft’s Ryan Gavin reportedly told a journalist.
The value and safety of your own and your client’s intellectual property is more important than ever before. Do it right and the intangible assets you create could be worth far more than the cost of producing them. Do it wrong and you could miss vital opportunities, have your true value stolen or find yourself on the wrong side of an intellectual property dispute.
To find out how to protect your own agency’s intellectual property and that of your clients register your interest to learn about IP Fundamentals including the Azrights Naming course.