What is a brand – and what does it mean for your business?

January 2016 | SPECIAL REPORT: INTELLECTUAL PROPERTY

Financier Worldwide Magazine

2015 saw a host of big name brands come under fire. Thomas Cook’s brand took a beating after a PR disaster over the deaths of two children on holiday in Corfu. Volkswagen saw its car sales suffer after September’s emissions scandal. FIFA is in freefall. Even Taylor Swift was sued for trademark infringement. But what exactly is a brand? Why does it matter? And how can you protect your own?

What exactly is a brand?

To many, the concept of a ‘brand’ seems uncomfortably nebulous. ‘Goodwill’ (the attractive force which brings in custom) can sit uneasily next to the concrete realities of property, plant and machinery on a company’s balance sheet. Ask many people what a firm’s brand is and they will mention its name, colours and logo. Others will mention the perceived quality of its goods and services or the way they are produced. Others may bring up its corporate reputation or notions of trust, integrity (or otherwise) and underlying brand messages and associations.

All of these people are right. An organisation’s brand includes everything that shapes its image and identity in other people’s eyes. This can make it one of a business’s most valuable assets.

Why is managing your brand important?

Without strong, positive, brand recognition your business plan and what you bring to the market can be undervalued. Every business has a brand – but some exploit theirs better than others. The biggest brands around, such as Apple, Nike or General Electric, are valued at tens of billions of dollars. Yet there are other benefits to owning a strong and secure brand. Licensing and franchising your intellectual property is one way to profit from the power of your brand. But allowing others to erode the identity of your brand by implying associations with your products or services where there is none, copying elements of them, or even plain counterfeiting, will mean you miss out on profits and let others benefit from your investment, expertise and reputation. All of this makes brand protection a priority for any forward-thinking business.

Have a strategy

Have a strategy for brand protection. Follow at least these six steps. With step one you should identify what you have that sets your business apart, what can be protected and how. In many jurisdictions (including the UK) copyright can arise on creation (e.g., in a logo or text on your website) or the law of ‘passing off’ can be used to protect against unauthorised associations with your business, goods or services. But it will often be easier to enforce registered rights. So register what you can. Be that a trademark for a company name or logo or a design for appearance, shapes or decoration of products or even a patent for any novel and inventive products or processes. And don’t forget domain names which can be valuable assets with a powerful pull. Each of these can give you and your products the edge over your rivals helping to build brand recognition and reputation within the sector.

The second step involves maintaining your brand once it has been established. Registered rights will need to be renewed (anything from every 10 years for trademarks to five years for designs and generally two years for domain names). So keep an eye on key dates and pay the appropriate renewal fees.

Step three is to monitor what competitors and others are doing that might impact on your brand, whether by piggy-backing on your reputation or getting too close to your trading style or goods and services. Set up ‘watch services’ to notify you of applications for registered rights that may be too close for comfort.

The fourth step requires you to educate your people about your brand and goods and services. Ensure understanding of your brand values and identity. Have a consistent message for internal and external consumption. Encourage them to act as your eyes and ears, and as ambassadors for your brand.

Step five is to be aware of your brand position and perception in the marketplace. Keep an eye on social media. Engage with your customers and even your detractors. Act swiftly, nip any gripes in the bud. Don’t let things fester or negative sentiment gather momentum. It is often said that there is no such thing as ‘bad publicity’ but brands on the wrong end of media interest may disagree.

Finally, step six is to actively enforce your rights. There is no point investing in your brand and reputation or maintaining a portfolio of registered rights unless you are proactive about protection. Catch infringing activity early; consider taking pre-emptive action where necessary. Oppose competitor applications for registered rights where appropriate and promote your brand and products effectively. There are many examples of once-distinctive trademarks becoming generic – think ‘aspirin’, ‘hoover’ and ‘margarine’. Sometimes brands can be the victim of their own success but beware of ‘genericide’ (where a trademark owner contributes, unwittingly, to the destruction of the distinctive nature of a mark through inappropriate marketing). Take note of what competitors and others say about you and act if necessary.

What about the cost?

The right approach to brand protection can reap dividends in the long run. The key to keeping the cost of brand protection down is to get started early, have a strategy and be proactive. It is also important to have a sense of perspective, to have a clear commercial outcome in mind, and to be flexible. Don’t use a sledgehammer to crack a nut. There is often a proportionate way of dealing with the issue. Writing to infringers quickly and taking a ‘real-world’ view and practical approach can avoid the need to go all the way to court. But litigation needn’t be prohibitively expensive. In fact, it can be surprisingly affordable, especially following recent reforms and the recast Intellectual Property Enterprise Court (IPEC), which offers a streamlined process and a cap on legal costs.

The good news

A proactive approach to establishing, promoting and protecting your brand and reputation can avoid plenty of trouble – and expense – in the future.

Nick Walker is a partner and Joshua Hardie is a trainee at Lewis Silkin LLP. Mr Walker can be contacted on +44 (0)20 7074 8055 or by email: nick.walker@lewissilkin.com. Mr Hardie can be contacted on +44 (0)20 7074 8120 or by email: joshua.hardie@lewissilkin.com.

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