In its report on the ‘Best Global Brands 2012’, branding consultancy Interbrand identified Coca-Cola as the most valuable brand in the world, worth nearly US$78 billion! Apple (US$76.6 billion) and IBM (US$75.5 billion) came in at very close second and third places, with the top 10 filled out by Google, Microsoft, GE, McDonald’s, Intel, Samsung and Toyota.
Obviously, these are all extraordinarily famous brands, on a global scale. We are so accustomed to these brands being in our lives that it perhaps does not occur to us to ask ourselves how they got there. What makes a brand great? And what keeps it great?
To the casual observer, brands and trade marks may appear synonymous. However a brand is very much more than the trade mark (or trade marks) that symbolise it.
Your brand encompasses all of the values of your business. It defines who you are, how you operate, and how you are differentiated from the competition. Managing and expressing your brand clearly and consistently in all of your interactions with your customers and the wider community is essential for building a strong and valuable brand.
Hopefully I am preaching to the choir here, but if you still harbour any doubts that a brand can have a coherent identity, and a personality, you perhaps need to look no further than Apple’s ‘Get a Mac’ (you may remember it as ‘I’m a Mac’/’I’m a PC’) campaign. The personifications of the Apple and Microsoft brands in that campaign were instantly recognisable, even upon seeing them for the very first time (although, to be fair to Microsoft, it was probably a case of ‘character’ versus ‘caricature’). That is the power of a great brand.
As the perceptible ‘face’ of a brand, a trade mark can become a symbolic repository for a large proportion of this brand value. For this reason, misuse of your trade mark by others – including competitors –can allow them to cash in on the strength of your brand, or even cause significant damage to your brand and reputation.
This is where registered trade mark rights play an important role. Having your trade marks registered in the countries in which you operate enables you to take swift and decisive action if you become aware of any use of those trade marks that may be causing harm to your brand.
The following five tips will help you to select, protect and use your trade marks in a manner that aligns with, and supports your brand identity.
The purpose of a trade mark is to uniquely associate your business, and your brand, with the goods and services you provide.
For this purpose, descriptive terms make for ‘bad’ trade marks, because they cannot effectively perform this function. For example, if you own an Australian company which manufactures, distributes and sells widgets, then it may seem like ‘AUSTRALIAN WIDGETS’ would be a good trade mark. After all, it tells consumers not only where you are, but also what you do. However, for this reason it will never clearly distinguish you from other Australian-based manufacturers of widgets.
Descriptive terms are also difficult to register and enforce. The trade mark law in all countries recognises that competing providers all require the use of descriptive words and phrases in order to inform consumers of the nature of their business, products and/or services. As a result, the rules limit the ability of any one provider to obtain an effective monopoly over descriptive terminology.
By contrast, there are a number of examples of ‘good’ trade marks in Interbrand’s top 10 global brands of 2012.
Take Apple, for example. The word ‘Apple’ has an existing ordinary meaning. As such, it is descriptive of a fruit, or of products including the fruit. However, it has no pre-existing natural association of meaning in relation to computing products. It is therefore clearly capable of functioning to uniquely identify those products, as distinct from similar products made by other companies.
The word ‘Google’ on the other hand, is a fabrication. Not coincidentally, it is a homophone of the word ‘googol’, referring to the number 10 raised to the power 100. However, even for consumers familiar with this term, there is no directly-descriptive association with Internet search services. Invented words make excellent trade marks, since by definition they do not describe any goods or services.
A trade mark like Intel provides more of an allusion to the nature of the company’s products. Clearly, Intel is not directly descriptive of semiconductor devices. However, it alludes to the word ‘intelligence’, which itself has at least two common meanings, i.e. the capacity for understanding, and the gathering of information. Either one of these meanings would provide support for the brand identity of a high-technology company. However, neither one directly describes Intel’s products.
The trade mark Microsoft is a portmanteau (i.e. ‘mash-up’) word based on ‘microcomputer’ and ‘software’. Given the present ubiquity of computers and software, such a word might now be invented for descriptive purposes. However, when it was adopted as a trade mark, in the 1970s, microcomputers were very new, and software was a term known only to a specialist group of people. As a result, the trade mark MICROSOFT succeeded in capturing the essence of Bill Gate’s fledgling company, without being an obviously descriptive term.
Interbrand’s top 10 list also includes two ‘bad’ trade marks turned good, namely IBM and GE. These trade marks started life as ‘International Business Machines’ and ‘General Electric’, respectively. Clearly, these names were intentionally descriptive. Over time, however, both companies have moved to associate their brands strongly with the abbreviated forms of their original names. In the absence of knowledge of the originals, the abbreviations are simply meaningless sequences of letters. Abbreviations and acronyms can make for very effective trade marks.
The one top 10 brand with a classically ‘bad’ trade mark is McDonald’s. Common surnames are necessarily descriptive of any business operated by somebody having that name. Over time, the fast food giant has relied upon other brand identifiers, such as its famous ‘Golden Arches’ and distinctive trade dress in its outlets, along with a huge investment in creating a ubiquitous presence. McDonald’s proves that with sufficient effort and expense, even a highly-descriptive trade mark can become distinctive of a particular business. However, few companies have the resources to achieve such an outcome.
Having selected a trade mark, it is essential to ensure that it is available for use in all of the relevant markets, and to secure protection, via registration, at the earliest opportunity.
In many countries, including common law countries such as Australia, the UK and the United States, a company may possess ‘unregistered rights’ in trade marks which have been used and have acquired a reputation. However, such rights can be difficult and costly to enforce, because it is necessary to prove the existence of a sufficient reputation, and to show that the activities of an alleged infringer are resulting in damage.
Infringement of registered rights is generally far more clear-cut, and a registered trade mark can be enforced even before a substantial reputation has been developed in the brand.
A further problem is that in some countries, such as China and many other Asian jurisdictions, trade mark rights can be acquired by the first person to file for registration, even if the trade mark is already in use by someone else. Apple famously ended up paying US$60 million in order to settle an infringement dispute, and acquire the Chinese rights to the iPad trade mark.
In many jurisdictions, including Australia, the United States and most European countries, it is possible for an unused trade mark to become abandoned. After a period of non-use (commonly three to five years) a trade mark registration may become vulnerable to cancellation.
As a result, if you wish to maintain control of older trade marks, in which a residual reputation may still reside, it may be necessary that these be used from time-to-time, even if they have become out-dated. Even long disused brands can carry remnants of their original glory, particularly when consumers become nostalgic, and it may well be desirable to ensure that competitors are not able to cash in on this effect.
For example, the US department store Macy’s has acquired a number of other businesses over the years, some of which were quite well-known in their day. Over time it has rebranded the stores as ‘Macy’s’, and ceased using the original brands, which include names such as Abraham & Strauss, the Bon Marché, and Robinson’s.
When another business recently managed to register the defunct trade marks in its own name, Macy’s commenced action in a US Federal Court, claiming that it had not abandoned the trade marks. The case is still pending.
It is often desirable to periodically refresh, update or ‘modernise’ a brand, including the associated trade marks. Microsoft, for example, has had five corporate logos over its life with early attempts – including ‘hippy’ and ‘heavy metal’ versions – making way in 1987 for the familiar and relatively timeless badge that was only finally replaced last year.
If you are using a trade mark in a form that has come to differ from the registered version, you may not legally be ‘using’ your registered trade mark, and it may therefore become vulnerable to cancellation. It is therefore important to keep your trade mark registrations up-to-date, and in particular to register updated marks.
Additionally, you may need to continue to maintain your older trade marks, if you wish to keep them registered, by using them from time-to-time, as discussed above. In this regard, ‘nostalgia’ campaigns, in which an old form of branding is revived for a limited period, can be very effective.
While the activities of your competitors can be of concern, you equally need to be vigilant in relation to the use of your trade marks by the general public, including your own customers. This is more important than ever in the age of the Internet and social medial
A common concern is damaging negative commentary around a brand, for example on Facebook, Twitter or other social medial sites. However, adoption of elements of your branding in the community is not necessarily a bad thing, and can be turned to advantage.
One recent example is provided by McDonald’s in Australia. Over time, many Australians have come to refer to the fast-food chain affectionately as ‘Macca’s’. A recent branding survey commissioned by McDonald’s Australia found that 55 per cent of Australians refer to the company by this slang name.
Presumably recognising that affection for its brand is a positive attribute that should be managed rather than restrained, McDonald’s applied for registration of the word MACCA’S in 1994, and it was first entered onto the Register in December 1995. Since then, McDonald’s has not been shy of using the slang name in its advertising, for example in TV advertisement scripts.
However, in a world first for Australia, between 8 January 2013 and early February this year, 13 McDonald’s restaurants around Australian actually replaced their normal ‘McDonald’s’ signage with ‘Macca’s’, in honour of Australia Day (26 January). This is the first time, globally, that McDonald’s has gone so far as to recognise the market penetration of an unofficial moniker by actual rebranding of outlets.
By embracing the branding bestowed upon it by its own customers, McDonald’s has managed to take control of the trade mark, making it much easier, if necessary, to restrict damaging use by other parties.
One thing that is very clear from the evaluations provided by Interbrand, a strong brand can be very valuable indeed!
Trade marks are not the same thing as brands, however trade marks are a very important part of your branding.
With a little care and attention, you can protect your trade marks, and ensure that they continue to work for your brand and your business. Just remember:
If you have any other tips on the proper care of trade marks, please feel very welcome to share them in the comments below.
By Mark Summerfield