Trademarks Around the Edges

Many years ago, companies that made a branded consumer product thought they did only one thing: make that product.  Their IP lawyers agreed.  Such companies registered their trademark in the applicable category for their long-lived product, and then did no more.

Registration in categories in which the brand-owner did not intend to make products was not possible (use, or intent to use, being a prerequisite of trademark registration).  But many of those companies would not have paid to register their trademarks in other categories even if they could have done so; they never imagined that they might want to control its use in such categories, or prevent others from doing so.  They knew that no one could actually use their specific brand name, anyway – or at least they would have remembered their lawyers telling that much during one of those endless meetings in which they were forced to think about arcane trademark law.  And if no one could use their exact name in a product category in which they had no intentions of producing anything, why would they have taken any unnecessary legal expense or risk to prevent it?

Today, brand owners know their mark means more than one thing, and must be protected in more than one category.

Among other factors, an increasing awareness of the subtleties of brand equity has brought attention to product categories that once seemed irrelevant.  The last 20 years have taught us that a brand is much more than the product that first bore its name.  A brand is an idea, and is built as much around its edges as in its middle.  Some even say that the original product on which the brand name was built is not the brand but only the thing that makes the brand – an idea – more valuable.

Corporate brand managers now know that extending a brand into new categories (through line extension or licensing) can contribute more to its equity than anything else.

But as they act on that knowledge they occasionally find themselves hamstrung by the narrower brand concepts of their predecessors.   They are sometimes unlucky enough to learn, either by investigating licensing opportunities or talking with their IP counsel, that their brand is not available in categories they want to pursue.  The earlier failure either to register their trademark in such categories or to challenge other’s registration of similar names in those categories now makes it near-impossible to extend the brand into those fields.

I have recently watched the owner of a venerable brand find itself unable to license its core trademark into a product category that (under our broader sense of what a brand means) was exactly where it belonged.  Ten years earlier another large company had registered a part of this company’s name in the now-desirable category.  The brand owner in this case was not aware of that registration; during that period it did not even bother to investigate registrations in categories then perceived to be so far outside its realm of interest.  But even if the brand owner had known about the other registration, it may not have contested it, viewing its own interest in this category as so impossibly remote not to be the worth the legal costs of challenging the other registrant.  Now it finds itself not only unable to do a deal with a highly interested licensee in this category; it must also watch another company use a name strikingly similar to its own in a category it should now own.  Its brand equity will suffer.

Fortunately, brand owners and those who work for them are now aware of the risks such registrations pose and the need to preserve such opportunities.  Most brand owners will now challenge any confusing registration, no matter what the category, to

protect the long-term integrity of their marks.  Some also license defensively, simply to protect diverse categories and strengthen their legal claims against others.

Licensees need to act defensively, too, by ensuring that a brand they pay for has done everything within its power to protect its marks, in its own categories, in the prospective licensee’s category – even in categories that nobody but the wildest brand consultant can imagine the use for.  Those involved in the licensing process (whether licensees, manufacturers’ reps., or licensing agents) ask too few questions about the manner in which a licensor protects its marks, and the manner in which it has done so in the past.  They would all avoid surprises by learning whether a brand owner they plan to work with has protected its marks in an appropriately expansive manner.

IP lawyers are some of the legal profession’s most conservative, and brand consultants are some of the creative profession’s most outrageous.  They rarely talk to each other.  Yet they make each other’s work possible, and should not only talk; their clients should make them talk.  The visionary schemes the brand manager thinks up will be possible only if the IP lawyer has done her job for the mark.  And the lawyer will understand why forward-thinking is necessary when she knows all the unpredictable ways in which her client’s brand may grow.