Strategic brand management in a global marketplace
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1 Strategic brand management in a global marketplace In today s globalised market, it is more important than ever to make smart decisions on trademark selection, registration and enforcement. A successful brand management programme can play a vital role in minimising risk and maximising value By Cynthia Walden, Fish & Richardson PC, Creating and maintaining a strong brand in the marketplace is critically important to a company s long-term success and ultimate value. Trademarks whether comprised of a word, a symbol, a design or some combination thereof are powerful tools in the marketplace. They can convey an immediate and powerful message to consumers about both the source and the quality of the products and services with which they are used. A distinctive trademark that is well positioned and recognised by consumers can be invaluable. However, if a company fails to take care in the selection, registration and enforcement of its trademarks, it will not only lose the opportunity to maximise its presence in the marketplace, but may also be in danger of losing control over its brand and reputation. In today s global marketplace, it is more important than ever to make smart business decisions about which marks to adopt, where to register them and how to enforce them strategically. This article discusses some of the key elements to a successful brand management programme geared towards minimising risk and maximising value. Establish and communicate branding guidelines and internal protocols for selection, use and enforcement of trademarks It is important to have a clearly articulated internal process for the selection and adoption of trademarks. In order to be most effective, this process should include branding guidelines that explain what types of mark may fit best with the company s business, corporate vision and overall marketing strategy. Developing and implementing branding guidelines is the first step. The next step is to develop a process for managing the selection and adoption of new trademarks. A point person in the marketing department should be assigned to coordinate with a point person in the legal department or external trademark counsel, as this can streamline the process and help to ensure that a consistent approach is taken. A simple intake form should be created to streamline the process of vetting proposed trademarks. The form should request key information related to: Products and services with which the mark will be used. The geographic scope of the proposed use. The timeframe for making commercial use of the mark. If more than one mark is being proposed, they should be ranked in order of preference. An availability search should be conducted before adopting a new mark. This is to ensure that the proposed mark is not confusingly similar to other marks in the marketplace, and that it does not infringe on someone else s rights. Conducting an availability search requires upfront investment, but this is money well spent in order to avoid unnecessarily investing time and resources in creating and printing 112 Intellectual Asset Management May/June 2013
2 Brands in the Boardroom promotional materials, labels and packaging bearing a mark that turns out to be too close to someone else s. If the availability search does not identify any issues, the symbol can be used with the mark; but the symbol should not be used with the mark until it has been registered with the US Patent and Trademark Office (USPTO). Use of the symbol in connection with a mark that is not registered can subject a company to financial and even criminal penalties in certain countries. Trademark guidelines providing instructions on the proper use of trademarks should be drawn up and distributed within the company. These guidelines should include basic information about proper use of a trademark, such as the following: Always use the mark to modify the noun that refers to the general type of product or service being offered. Use a consistent form of the mark. Do not pluralise the mark. Use proper legal notice with the mark. The guidelines should also include specific information about any authorised form of the mark, the font that should be used and whether a specific Pantone colour should be used. Protocols for how to handle issues that arise in connection with marks should also be developed and communicated within the company. A point person should be designated for employees to contact regarding trademark issues that come to their attention. In particular, this protocol should be communicated to customer service representatives (who may receive calls or s relating to confusion in the marketplace) and other employees who may receive protest letters or otherwise become aware of issues relating to trademarks. There is a dual focus for these efforts: Minimising liability related to infringement claims of someone else s trademarks. Ensuring that the company is timely apprised of any problems stemming from the use of its trademarks (or confusingly similar marks) by others. Finally, and most importantly, steps should be taken to ensure that internal protocols for the selection, use and enforcement of trademarks are put in writing, clearly communicated and regularly reinforced within the company. Posting them on the company intranet site is helpful, but may be insufficient to ensure that everyone is aware of them and the importance of adhering to them. Regular training sessions and periodic messaging from the marketing and sales teams are essential to the success of this effort. Register trademarks in important jurisdictions Trademark rights are jurisdictional, which means that a company must register its trademarks in each jurisdiction that is important to its business. While common law rights are recognised in the United States (ie, a party need not register its marks in order to assert rights in them - if it is the first to use a mark, it can prevent others from using a confusingly similar mark in the geographic area where it can establish commercial use of the mark), significant statutory benefits flow from federal registration of trademarks. Registration of a trademark with the USPTO enables the owner to: Assert presumptive nationwide rights in the mark. Seek treble damages for wilful infringement. Use the symbol. Federal registration of trademarks is available and recommended for trademarks that are not deemed to be confusingly similar to someone else s mark, generic or merely descriptive of a function, feature or characteristic of the products or services. Outside the, trademark rights flow from registration rather than first commercial use of a mark, so the first person or company to file an application to register a trademark will be recognised as the owner of the trademark in most foreign jurisdictions. Failure to understand this issue and its potential ramifications can pose a significant threat to the business. Even if the company has been selling products or rendering services in a certain country for a number of years, if a local distributor registers the company s trademark in its own name and the licence/distribution agreement does not prohibit it from doing so, the local distributor will be recognised as the lawful owner of the trademark and local laws may provide no means of redress. It is critically important that all licence and distribution agreements include clear provisions that acknowledge trademark ownership and prohibit registration of company trademarks (including domain names incorporating the trademarks) by distributors and licensees. Similarly, enterprising individuals and businesses (ie, hijackers, infringers and counterfeiters) can register company trademarks and demand a ransom in order Intellectual Asset Management May/June
3 Steps should be taken to ensure that internal protocols for the selection, use and enforcement of trademarks are put in writing, clearly communicated and regularly reinforced within the company to transfer ownership of the registration back to the company under the threat of an infringement action or injunction on further sales in connection with the trademark in that jurisdiction and local laws may not prohibit them from doing so. Another possible scenario is where one party registers another s trademark and uses it for unrelated products or services, which may dilute or damage goodwill in the mark (watch services that identify newly filed trademark and domain name applications throughout the world can be extremely helpful in stemming the tide on these issues). A number of notable cases have involved these various issues over the years and they often make the headlines; the bigger the company, the bigger the cost and commercial disruption involved. In order to avoid these issues, trademarks should be proactively registered in the jurisdictions where they are being used and where the company plans to expand its business. It often makes sense to register trademarks in jurisdictions where component parts are manufactured and where counterfeiting is prevalent (eg, Asia, Southeast Asia, Eastern Europe, Russia and South America). In some countries where trademark hijacking is prevalent, a company may also want to consider securing registrations that extend beyond the scope of its current product and service offerings. Registering trademarks broadly in such countries (especially in China) can be a smart and effective way to avoid the potentially significant expense and uphill battle of attempting to protect marks from unauthorised use by others when local laws may not provide the basis for a successful claim. It is also advisable to register local language versions of trademarks (eg, Katakana, Kanji, Arabic, Cyrillic) in non-english speaking countries, as local consumers will inevitably develop and use a local language equivalent for trademarks in the marketplace. Local businesspeople and trademark counsel can advise on which versions of the mark should be registered. It is far less expensive to invest in proactively registering trademarks than it is subsequently to deal with the legal expense, administrative hassle and potential harm that can be caused to business and brands in the marketplace. Register trademarks with Customs Once trademarks have been registered with the USPTO, registration with US Customs and Border Patrol should further be considered in order to enlist the support of government officials in identifying and seizing counterfeit products at the border. It is a relatively simple and inexpensive process to register trademarks with Customs, although this does require the identification of all authorised distributors or licensees; if the company has a significant list of authorised users in 114 Intellectual Asset Management May/June 2013
4 Brands in the Boardroom Cynthia Walden Principal Fish & Richardson PC Cynthia Walden is a principal in the Boston office of Fish & Richardson and the trademark and copyright practice group leader. Her practice includes all aspects of trademark law, ranging from US and foreign prosecution, client counselling, domain name and internetrelated issues to trademark dilution, trademark opposition and cancellation proceedings before the Trademark Trial and Appeal Board and trademark litigation. Ms Walden s practice also includes copyright prosecution, client counselling and copyright litigation. She has extensive experience with false advertising and unfair competition matters, and with corporate due diligence. Ms Walden has been listed in the World Trademark Review WTR 1000 ( ) and was recently named a 2012 Top Women of Law honouree by Massachusetts Lawyers Weekly. She earned her JD from Duke University School of Law and an AB from Dartmouth College, cum laude. various jurisdictions, the process may not be so simple. Registration of trademarks with Customs will allow customs officials to seize counterfeit products (ie, products on which the company s marks are used and which are identified in its registration). Another measure that takes maximum advantage of the resources that Customs has to offer is to compile training materials and schedule training sessions to help familiarise customs officials with trademarks and products (and what authentic products and labels look like), in order to assist them in identifying counterfeits in transit. Trademarks can and should be registered with Customs in all jurisdictions in which the company conducts business. The process for customs registration and the locations in which registrations should be secured will vary by jurisdiction. For example, in the European Union, it is possible to secure an EU-wide registration that enables customs officials in all EU countries to seize counterfeit products. On the other hand, in Brazil, companies must specifically register with the customs authority in each port where they anticipate that counterfeits might be transmitted. Consult with counsel to devise a strategic plan to maximise the benefit and minimise the hassle involved in a global customs registration initiative. Take a strategic approach to the use/ misuse of trademarks in social media The role of social media in marketing products and services in today s marketplace is undeniable. It is thus important to develop and implement a plan for using and marketing trademarks on social media sites. To ensure that the company s use of social media sites is maximising the strength and awareness of its brand, a person or team of people in the marketing and/or public relations departments should be appointed who are social media savvy and who can devote the necessary time to participate in and manage the process. Using social media as part of a wider marketing strategy can be extremely effective in reaching a broader base of consumers and in effectively disseminating information about products and services; but it does require a high level of attention and business-minded management. Registering the company name and significant marks as usernames or handles on various social media sites is an important first step. If another party has already registered the trademark as a username on a social media site, the company should work with counsel to assess whether the policies of these sites enable it to seek the transfer of the username, or whether other enforcement efforts are required and would be succeed. Some social media sites will shut down or require the transfer of a username that makes unauthorised and confusing commercial use of another s trademarks. In other cases, if a username is not tied to a commercial enterprise and cannot be linked to confusion in the marketplace, the company may need to approach the party which has registered the username directly to convince it to transfer the name. Seek the advice of counsel on whether and how relief can most efficiently be secured. It is important to acknowledge that a company generally cannot address all unauthorised uses of its trademarks on social media sites, and that business decisions will need to be made on where it makes sense to devote resources to addressing them. It may make sense to do nothing and simply monitor unauthorised use if: It is not connected with infringing or counterfeit products or services. It does not unduly tarnish the company s name or the reputation of its products or services. It does not constitute commercial use Adopt a business-minded approach to the use and registration of domain names The registration of domain names incorporating trademarks by enterprising entrepreneurs which then turn around and sell them to the rightful trademark owners has long been a profitable business. While at first most companies took the approach of protesting all unauthorised uses of their trademarks in domain names, there is increasing awareness that the business imperative may not always be there to protest every domain name that incorporates a trademark or terms that are confusingly similar to a trademark. Depending on the business, attempting to protest all misuses of a company s trademarks as part of domain names, including those with typographical variations and the addition of other terms, may be unrealistic in the current marketplace. If a company s business is primarily internet based, it may still want and need to prioritise protesting all confusingly similar domains. Even if the business is not primarily internet based, if a party has registered the trademarks or confusingly similar variations and is selling competing, infringing or counterfeit products, or if the use in connection with Intellectual Asset Management May/June
5 the accompanying website is otherwise confusing, then it absolutely makes sense to protest this use and seek to have the domain disabled or transferred. However, a company may be better off taking no action and simply monitoring the domain name to see whether and when it is used and whether this use is confusing if: The other party has registered the trademark as part of a domain name that is not identical. The other party is not using the domain in connection with an active site. Bad-faith registration cannot be proved in order to prevail in a Uniform Domain Name Dispute Resolution Policy action. when another party uses or registers its trademarks. Making smart decisions about when and how to enforce marks in the global marketplace and on the Internet will undoubtedly be challenging, but with a good, business-minded brand management system in place, companies can ensure that these decisions are made as efficiently and consistently as possible. The recent approval of a new batch of generic top-level domain names (gtlds) (eg,.brand ) will present additional issues and expenses that will need to be evaluated on a business-minded basis. The system for registering and managing the new gtlds includes several rights protection mechanisms for trademark owners, including a Trademark Clearinghouse where one can register trademarks in order to be provided with notice of any competing applications for domain names that incorporate such marks. While it remains to be seen how much of a challenge it will be to protect against the misuse of trademarks in connection with the new gtlds, one simple step that can and should be taken is to register marks with the Trademark Clearinghouse or sign up for a watch service that provides notification as applications are filed. Once this has been done, a business decision can be taken on which issues merit further attention. Conclusion A company s brand is arguably its most valuable asset, as it is how consumers identify the company and its products and services in the marketplace. Trademarks communicate a powerful message and can play a pivotal role in purchasing decisions. Strategic brand management should be a priority for any company looking to maximise value and minimise risk. Implementing a protocol for the selection, adoption and enforcement of marks will ensure that the company puts its best foot forward when entering the marketplace and minimises the risk of issues with the trademarks of others. Proactively registering trademarks and domain names in jurisdictions where business is conducted and where there are plans to develop business can save a company the considerable grief and expense required Fish & Richardson PC One Marina Park Drive Boston MA Tel: Fax: Intellectual Asset Management May/June 2013
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