Why IP is Relevant Whenever Brand Identifiers are Being ChosenAug 09, 2021
IP is a key aspect of brands and needs to be considered whenever brand identifiers are chosen or changed. While in a pre-21st century environment, brand creation was separated from brand protection, in the digital global environment of the internet separating the two is increasingly untenable because businesses using names and other identifiers that are similar to their competitors will be instantly found out or copied, and would lose their distinctiveness as a result.
One reason why IP should be considered whenever you choose or change a brand identifier is that these identifiers are the container of the brand’s value.
The Connection Between Brand Equity/Brand Value and IP
The more sales and profits a brand generates the more valuable its brand becomes because that value is contained in its IP, namely in:
- The brand name
- Other identifiers that are owned by the brand
These other identifiers might comprise:
- A logo such as Coca Cola’s stylised version of its brand name
- A face icon or character such as Colonel Sanders of KFC
- A symbol – such as McDonald’s golden arches, or the Nike swoosh
- The shape of packaging – such as the Coca-Cola bottle
- A distinctive font – such as the Snickers font
- A tagline phrase – such as Just Do It, or Beanz Meanz Heinz
- A sound – such as the 118 118 jingle
- A colour or group of colours – such as the Tiffany blue
- A celebrity endorser – such as George Clooney and Nespresso
The role of brand codes is to uniquely identify your brand so there is no confusion as to the source or origin of the brand.
Codes can only perform this essential function if you legally own these identifiers of your brand. In some situations where you can’t legally own an identifier (such as with endorsements – the George Clooney/Nespresso example), then your advertising campaign might give you certain rights known as passing off in the UK, but it’s best to not rely on passing off.
Different IP laws come into play depending on the type of identifier involved. This means that while the ultimate aim is to register an identifier as a trademark, there are different actions you first need to take to ensure you can be uniquely identified and associated with a brand code you intend to use. Some brand codes such as colours, are difficult to own, while others such as logos can be unique to your brand immediately so that you can legally own them as soon as you create them.
To illustrate how IP impacts brand equity and brand value consider the UK-based Arcadia group which sought a buyer of its businesses when it went into administration in 2020. Asos offered to buy just its brands which included brands like Topshop, Topman, and Miss Selfridge. Asos had no use for the physical stores so it just bought the brands and physical stock paying £295 million, of which £30 million was for the stock. So, £265 million was for the brands alone.
The tangible manifestation of this brand value is in the IP which primarily consists of a brand’s trademark registrations and copyrights. While a brand may have some unregistered trademark marks depending on the country and the brand identifier in question, if there is a defect in the legal ownership of its identifiers, especially of its name, this would reduce the price that a buyer would be willing to pay for the brands. So, the lack of registered trademarks in the home country and key countries around the world would impact the price a buyer would be willing to pay.
For example, if the marketing department decides to tweak the logo or other brand identifiers it would be necessary to update the existing trademark registrations to reflect the changes even if they are very minor. The cost of doing so could be substantial for a global business. Yet, if the trademarks are not updated, it might impact their enforceability. As such this weakens the organisation’s position in legal actions that may be necessary down the line. In some cases, it could invalidate the company’s trademarks if changes are made to brand elements that are not reflected on the trademark registers.
Given that these external manifestations of a brand – its name and distinctive brand identifiers are the containers that capture the value of the brand they’re associated with, and that even tiny changes to them can have significant financial implications for an organisation, I believe that marketers need a basic understanding of how IP impacts brands.
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