The Protection of Brands in the Modern World
Examining the modern world of multinational manufacturing and sourcing, and outlines key issues for brand owners to keep in mind as they build, grow and protect their brands in their home countries and abroad.
There are some aspects of brand protection that are relatively new, in the China/India/South American manufacturing boom world. Throw into this scenario, online shopping mall sites like Alibaba, Taobao and others, and brand protection appears to look very difficult on first glance. In the past, brand owners would often rely on home country trademark registrations for key aspects of their brand protection policy. Clearly, such a strategy is no longer applicable, given that countries like China, have adopted first-to-file trademark registration systems, and do not pay significant credence to foreign registered brands when reviewing Paris Convention arguments for the protection of well-known trademarks.
We have generated a list of ten points for brand owners and developers to keep in mind, in relation to developing and implementing their brand protection policies:
1. Register your brands, slogans and logos, in your home country, and anywhere where you would like to make or sell your products within the ten years.
Budgets may well be limited when starting out with a new brand, however, the registration of a brand in relation to one class in a number of countries, does not need to be extensive. The utilization of WIPO’s Madrid system for international filings, and the negotiation of discounted rates for multi-country filings, can lead to a situation, where even a start-up with a few thousand dollars to spend in relation to brand protection, can get their distinctive trademarks/brands registered in several countries in relation to their key goods or services that they will be offering under such brands. Attempting to wrestle your brand off of a third party in trademark office actions, or court actions, at a later date, will certainly much more expensive, than getting a hold on your brand in the countries you are especially interest in, in the first place.
2. Register localized versions of brands in countries where English is not the native language spoken by most locals
Although it is important to have your original English brand promoted in foreign countries, and registered there as well, there is little doubt that the locals will develop a local language version of a brand for easier recognition and pronunciation. It is vital to provide guidance to a local foreign market as to what that localized version of your brand should be, in order to avoid problematic localized versions coming through. The best way to accomplish this, is for a brand owner to engage expert local assistance to develop a localized brand in relevant foreign languages – such an exercise should involve clearance searches of registered and unregistered marks, surveys (even in small groups) as to how a localized version of a brand comes across to consumers, and testing as to consistency between the original English brand and the localized foreign language version of the brand. Once a localized version of a brand is chosen, it must then be used and registered consistently, to ensure the development of brand recognition for the original English brand and the localized foreign language version of the brand. There are countless stories floating around, where this has not been done well, leading to costly exercises to set a market straight as to which goods are genuinely from a source, and which ones are not
3. Execute strong licenses when a third party is to use your brand
Although most countries trademark protection systems no longer require trademark licenses between a brand owner and a third party, to be registered, it is still worth setting up a strong licensing regime whenever third parties, possibly including subsidiaries, are permitted to use a brand in a home country or foreign country. Such licenses should control the quality of goods or services provided under a license, prohibit use of a mark without consent, deal with competition issues and restraints of trade, exclusivity issues and grey market issues, as well as notification provisions for infringement intelligence.
Most countries allow trademarks that are registered with their national IP offices, to be recorded with customs and border protection agencies, such that customs officials will alert a registrant if a shipment involving a recorded trademark registration comes across their desk and appears suspicious.
Most think of brand protection enforcement or litigation as an expensive exercise. Many would be surprised to discover that 90% of enforcement involving unauthorized use of a mark or a similar mark, can be done with cease and desist letters and threats of legal proceedings. Occasionally, raid actions, injunctions and other legal remedies become the only way to stop infringing activities, and to protect a brand, but in most cases, enforcement can be intelligently handled in a way, such that costs can be kept to a minimum.
It is vital that good agents are used to register brands and maintain registrations for brands, especially where several countries are involved. Although most countries now use a ten year renewal system for trademark registrations, some do not – further, some require the provision of evidence of use of a brand in that country prior to renewals being permitted. Allowing trademark registrations to lapse, can cause enormous brand valuation and business problems, so it is vital to ensure that brand portfolios are managed intelligently, with back-up systems in place.
As mentioned above in relation to renewals, “use” of a brand is important for maintenance. Virtually every country has a system in place allowing the removal of a registered brand, if it is not used for a period of years, such as three years. Such procedures are aimed at keeping a trademark register current, and uncluttered. These issues need to be kept in mind when planning expansion into future markets, such that investments made in registering a brand early in a market are not let go, due to failure to actually use the relevant brand in these markets occasionally, at least.
It is important for brand owners to keep a watch on the filing of new trademark applications in jurisdictions of interest. The early discovery of deceptively similar marks being the subject of an application for registration, can allow swift dispute resolution procedures to be engaged. There are many third party trademark watch services that provide excellent services at minimal cost. Subscription to such services is very important to ensure that third parties are not allowed to hijack a brand.
As trademark laws develop so do opportunities for the registration and protection of different types of brands. For example, shape brands, colors, sounds, smells, and combinations of these, are all registrable as trademarks in most countries these days. A strong brand can be add significant value to a balance sheet, despite the form that it takes.
Early communication with the creative part of an organization that looks at branding and new products/services is vital, such that the legal aspects of brand development and protection are appreciated from an early stage. Clearly, expensive problems can arise when a new brand is chosen and used, without clearance searches, or a new brand is developed and announced without any input as to the distinctiveness and registrability of the brand. As with many other aspects of a business, communication is key to the successful development of a brand, increasing its value, and enabling efficient protection.
It is hoped that these ten key points are kept in mind by inhouse counsel, brand developers and protectors. If so, they are sure to lead brands that are highly valued and well recognized in markets of choice.
ABOUT THE AUTHOR: Matthew A. Murphy
Matthew has over 20 years of China and Asia Pacific legal and business experience, focusing on Intellectual Property, Mergers & Acquisitions (including anti-trust) and International Trade. Matthew has been listed as a leading corporate/IP lawyer by various publishers such as Euromoney, Chambers and the Legal 500 and is an arbitrator with the Hong Kong International Arbitration Centre, an arbitrator and mediator with the Kuala Lumpur Regional Centre for Arbitration, and a domain name dispute arbitrator with the Asian Domain Name Dispute Resolution Centre in Beijing. Matthew is a regular contributor of articles on Chinese and IP law to major journals, and regularly teaches international IP and technology law at the post-graduate level at a number of leading universities. Prior to joining MMLC, Matthew was with Freshfields Bruckhaus Deringer and Simmons & Simmons in Hong Kong and London.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.