Creating and Building Great Brands: Needs Multidisciplinary teamwork from the Very Beginning
Most of us know a great brand when we see one. And when customers develop trust in a brand, they usually remain loyal to that company’s products or services and recommend them to others. But not all companies know how to choose a name that can be developed into a brand that is strong from both a marketing and legal perspective.
As part of Hogan Lovells Total Brand Care offering, which harnesses their global abilities to provide a holistic approach to creating, commercializing, and protecting their clients’ brands, Lloyd Parker, Tokyo Office Managing Partner, outlines some key business and legal factors companies should consider in creating and developing a brand.
What is the best way for clients to approach the brand-creation process, regardless of their geographic location?
We can break the process down into three key stages. The first stage is the initial creation, in terms of thinking up a new brand. The second stage is conducting the clearance search to see if the proposed brand can be used and registered. And the third stage is going through the trademark registration process to secure the brand. Each stage has its own key points to be careful about, and there is also one common theme across all stages which distinguishes those companies that are consistently successful in their branding.
Let’s start with the common theme that distinguishes companies that are consistently successful in their branding process. What do they do that others don’t?
In very simple terms, it is the use of a multidisciplinary team from the very beginning of the brand creation process.
There are many people within a company and external advisors who potentially become involved in the branding process. For example, this includes:
- The R&D department is there from the beginning creating the new product. They often assign an internal name to the project that may become so engrained into the company’s thinking that it is the natural or emotional choice for the new brand;
- The business/sales unit becomes involved at different times, increasingly so during the latter stages of the R&D phase. It will have its own views on what brand it wants;
- The marketing department may also be brought in to suggest and consider potential brand candidates , marketing strategies, and material;
- An external creative agency may be engaged to produce a list of potential brand candidates;
- The trademark department is typically brought in close to the proposed launch date for the purpose of conducting clearance searches on potential brands and applying for trademark registrations;
- External law firms may be engaged by the trademark department during the clearance and trademark application process;
- The legal or compliance departments may become involved at times to cover related items like labelling, packaging, and other regulatory issues; and
- Senior executives, directors, or even the company’s president may become involved and declare that they want a particular brand name for the new product.
So there are a large number of people who may become involved. In too many companies, these people and departments operate in silos and there is insufficient timely communication, understanding, and teamwork among them, resulting in inefficiencies and lost opportunities to create and develop brands that are stronger both from a marketing and legal perspective.
Companies that break down those silos and adopt a multidisciplinary team approach from the very beginning typically create stronger brands and in a more efficient and effective way.
So looking at the first of the three stages — initial brand creation — what are the key points which are critical to success?
One key point is to get the right balance between marketing and legal issues. For example, sometimes the marketing or business people will choose a word(s) that is descriptive of the goods or services, because they think it will be easier for the consumers to understand and be easier to market. The trouble with that is if the proposed brand is descriptive, then it will not be legally capable of being registered or protected as a trademark. Even if the company is capable of arguing there is some distinctiveness and the brand is registered as a trademark, the scope and protection of the trademark will typically be narrow.
At the other end of the spectrum, the marketing people may choose a brand that at first glance seems to be very creative and has a lot of marketing appeal and potential popularity. The company becomes fixated on that choice and starts spending a lot of time and resources on it. However, later when the trademark team becomes involved, the company sadly finds out that many other people also thought the brand was good and so previously registered trademarks that are identical or similar, which will make the company’s proposed trademark registration impossible.
A second key point is to think globally. That is, a company may select a brand that may be very good for their local market, but it’s not appropriate, sufficiently attractive, or legally possible in overseas markets. For example, it might be a word that has a bad connotation in a different culture, language, or religion. Equally, it may simply lack impact. For example, it might be an English word for a Japanese-speaking market, where the English word sounds cool and interesting in Japan, but in an English-speaking country, the word is bland and it doesn’t really have any impact. Furthermore, whilst the proposed brand may be registrable in the local market it is not registrable overseas. For example, it may be a word from a language, such as French, which is not understood in the local market, such as Japan. So in Japan the word is not obviously descriptive and so capable of registration. But when the trademark is applied for overseas in France and some other European countries, it is rejected because consumers in those overseas markets know the French word is descriptive of the goods or services.
A third key point is to consider seeking external professional help in areas for which you may have insufficient experience or resources. One example is creative agencies. Careful selection of the right creative agency is important. Some creative agencies are very good, but there are also others that are not. Also, not all of the inherently good creative agencies will be the appropriate match for all companies and their brand projects. There are a number of factors we recommend companies consider, including the following:
- Creative agency fees can be very expensive. So, is the current brand project sufficiently important to justify the additional expense? If so, what is the budget and which creative agencies can provide good value within that budget range? Do you just want a list of brand candidates from them or do you want additional services (e.g., logo creation, packaging designs, and marketing material)? What are the target market countries and does the creative agency have the experience and ability to provide potential brand candidates that will be suitable for those countries and languages? Who within the company is best placed to liaise and manage the relationship with the creative agency?
- Know the limitations of creative agencies. Some brand creation agencies may be very good at creative thinking, but all — or nearly all — either don’t understand the law sufficiently well or don’t have sufficient resources to also cover key legal aspects that affect the potential creation of a new brand. A common situation is as follows:
- A company may invest a significant sum of money and time with a creative agency to create a list of candidate brands. The company is pleased to see a number of nice-sounding names that from a marketing perspective are strong;
- However, the company is then disappointed when the results of the clearance search from their trademark department or external law firm states that from a legal perspective the proposed brand is weak or impossible because there are too many previously registered conflicting trademarks;
- Then the company is forced to start the process again, resulting in further costs and potential delays to the product launch; and
- This situation arises because all (or nearly all) creative agencies are not resourced to carry out clearance searches adequately. Some may be able to do identical searches, but even then they are not resourced to carry out full clearance searches covering similar trademarks.
Hogan Lovells is a law firm. How can you help clients in this first stage, which is more about creativity?
Typically law firms don’t get involved in the creative aspects. But we are not your typical law firm. We could see that there was a real client need in this area and so we created the following innovative services:
- We have developed relationships with a number of creative agencies, where we take the lead and provide a package of combined creative and legal services from the very beginning of the brand creation process. By having relationships with a number of creative agencies, we can offer the client different options and recommend the most appropriate agency for each particular brand project. We work closely with both the client and creative agency from the very beginning so that everyone is fully aware of all the project details and the client’s commercial context and goals. This results in greater efficiencies, better and faster results. For example, as the creative agency is developing potential candidates for the desired brand, Hogan Lovells can efficiently advise on descriptiveness, negative connotations, identical searches, phonetic searches, and some brief similarity searches — even at this early creative stage. We can even offer to run simple and confidential market surveys amongst Hogan Lovells’ own staff in various countries around the world to get a quick insight into how potential consumers may react to the brand candidates;
- As stated before, a key element is to adopt a multidisciplinary team approach from the very beginning. We work together with clients to help them break down their internal silos, so there is much more real-time communication among them and there is a pooling of their respective expertise. For example, the creative people and legal people can work side by side to more efficiently brainstorm brand candidates that are appealing from a marketing perspective and — before too much time is spent on any of those potential candidates — stress check it from a legal perspective. To help achieve this goal of a multidisciplinary team approach, we are now developing a software platform that will encourage and facilitate greater and more timely communication and interaction within a company and with their external providers.
What about the second stage — conducting clearance searches?
The purpose of the clearance search is to determine whether or not it is possible to use and register the desired brand for the relevant goods or services in the target countries. A number of key factors arise at this stage:
- There are the legal risks of whether a prior trademark may technically block the proposed brand. This involves issues such as whether or not the trademarks are identical or similar, whether the goods or services are identical or similar, and whether there is a likelihood of confusion between the potentially conflicting trademarks;
- A practical risk assessment is also necessary. That is, even if there may be a legal risk — what is the practical risk of the legal risk occurring? For example, what is the practical possibility of an owner of a prior trademark actually opposing a trademark application for your desired brand even if they would have a good legal basis to do so? This will in turn involve considering practical facts such as whether they are a competitor, their size, their potential financial and legal ability and willingness to become involved in a legal clash and their previous historical record for doing so; and
- Then there are the potential legal and practical solutions. For example, can a potential problem with a prior mark be solved by: slightly amending the desired brand or its relevant goods or services; acquiring the prior trademark; cancelling the prior trademark for non-use; using that cancellation possibility as leverage to obtain the cooperation of the prior trademark owner to enable registration of the desired brand; or negotiating a global co-existence agreement by offering to assist them in obtaining registration in countries where you have a prior trademark right.
The above points may not sound too difficult if you are only doing the clearance search for one country or having to solve potential obstacles caused by one prior trademark. However, companies nearly always want to use the same brand in many countries around the world. So searches are ideally required for all of those countries, and you have to consider the different local languages, culture, laws, practices, and negotiating styles of prior trademark owners. Furthermore with globalization, trademark registers in many countries are increasingly becoming more crowded which further increases the possibility of running into a number of prior trademarks that could block the registration of your desired brand.
Hogan Lovells excels at such challenges. Every day our offices work together on such multijurisdictional complex clearance matters. We have also established very close working relationships with leading trademark firms in countries where we don’t have our own office. Each year, we cover trademark matters spreading to more than 150 countries.
What about the third and last stage — the trademark application and registration process?
Keys during this stage include: a good network of local lawyers who are very experienced in this type of work so that they can navigate through the local official trademark office process as smoothly as possible; effective overall supervision of that network; a good trademark portfolio database software that will help manage the workflow and ensure that all necessary action is taken within the relevant official deadlines; and the legal ability and practical experience to deal with problems caused by conflicting prior trademarks that were not able to be solved before the trademark application was filed.
Again, Hogan Lovells excels at this type of work as shown by the vast array of leading brand companies around the world that place their faith in us with their valuable brands and by the multitude of trademark awards we have won over the years.