The costs of not protecting your brand legally
In a previous article we discussed the importance of creating a brand visual identity (colours, logos, brandmarks, fonts) that is uniquely yours, and which you should protect at all costs. We are now going to look at ‘what neglecting to do’ can cost your business…
The costs of neglecting to protect your brand
As custodians of brands, we look after more than just our product, service or company. It is our duty to ensure that we are never in a position to lose our most valuable asset - or potentially a part thereof.
Let’s look at an hypothetical scenario, to show you what the implications of neglecting to legally protect your brand assets could be.
Imagine you are the brand custodian of an FMCG brand.
As a business you have likely invested thousands if not millions of dollars entrenching brandmarks, names, colour schemes, or payoff lines. It has taken years of marketing and advertising campaigns. Application across thousands of pieces of business collateral and packaging. Your brand is displayed proudly on all your delivery vehicles. Your beloved brand is firmly entrenched in our consumers minds.
And then one day, along comes a new competitor, with a similar product that looks way too familiar. They’ve used the same colour scheme, similar imagery. Perhaps they have made a play on your name.
No problem, you think. You’ve been in the market for years. This is a clear case of brand theft and you can deal with it swiftly.
Only… your legal team comes back with some bad news.
You have never legally registered the brand mark (and accompanying colour scheme) as a trademark.
“A trade mark is not just ‘a logo’. It can be a letter, number, word, phrase, sound, smell, shape, logo, picture, movement, aspect of packaging, or a combination of these.”
Somehow, somewhere in the company’s history this was simply neglected.
What follows next is the kind of crisis that completely derails businesses.
Meetings with lawyers. Endless Cease and Desist letters and responses.
Finally it gets serious and goes to court. You’re now a year down the line, with nothing except a pile of legal fees to show for the efforts of your entire management team.
Perhaps your brand starts to suffer with all the distraction.
And then, the devastating news that you have lost the case. You have no legal ownership over what you assumed were your brand’s key characteristics.
And you’re left with only one course of action. Rebrand your product and relaunch it.
Can you hear the sound of more dollars flying out of the company war chest?
This may sound like an extreme hypothetical situation but it’s not. There is a reason there is an entire speciality legal branch known as Trademark Law.
Thousands of consulting companies exist to help businesses trademark their brands.
Brands large and small have had to fight their identities -
Luxury goods brand Louis Vuitton won against a Korean Fast Food Chain using its name and logo.
A little Adelaide burger shop called Burger King won against global giant Burger King, forcing them to create the Hungry Jack’s brand in Australia.
The latter is a wonderful example of how legally registering a brand name is the slingshot in a David vs Goliath situation, and underscores that you’re never too small to protect your brand.
The Costs of Rebranding
| New Corporate ID Design | $2,500 - $15,000+ |
| Customer Research | $10,000 - $200,000+ |
| New Photography and Video | $2,500 - $100 000+ |
| New Copywriting | $5,000 - $200,000+ |
| New Domain Name | $15 - $5,000+ |
| Update Website with new design | $2000 - $80,000 |
| New Brochures | $2,000 - $100,000+ |
| New Business Cards for all staff | $100 per staff member |
| Signage - offices | $5000 - $100,000+ |
| Livery on Vehicles | $2,000 - $100,000+ |
| New Staff Uniforms | $2000 - $50 000+ |
| Legal Fees | $200,000 - $Millions |
| Lost Brand Equity | ??? |
| Time to rebrand | 6-12 months |
| Potential lost of Share Value | ??? |
CASE STUDY: Cadbury
Since 1995 Cadbury has claimed the use of their iconic purple packaging (Pantone 2685C). In that trademark application they cited:
The mark consists of the colour purple (Pantone 2685C) as shown on the form of the application, applied to the whole visible surface, or being the predominant colour applied to the whole visible surface, of the packaging of the goods.
All well and good. Except they only registered it for “chocolate in bar and tablet form”.
When, in 2004, they wanted to extend the application of the purple packaging to drinks, cakes and other chocolates, they faced fierce legal action from competitor Nestlè, who said, to paraphrase “ sorry, but you can’t own purple”. A long and complicated battle ensued, and Cadbury in fact lost the case. And it all came down to the use of one word. “Predominant”.
Whilst the cases we’ve cited may be extreme and precedent setting from a legal perspective, they do highlight the absolute importance of insuring your brand. Even a simple slip-up like not registering use for a new product category could have massive financial and brand implications. A good time to review all the legals is when you’re doing your annual brand planning - make sure all your trademarks are valid, check when they’re expiring and action any new or outstanding registrations. It’s a good “brand hygiene” practice to establish.
In a future article we will outline our brand trademarking checklist; the essential guide on how to go about protecting your brand.
Is it time for brand health check?
If you haven’t conducted a brand health check or audit, now may be a good time to do so - one, to ensure that your brand is still relevant and two, to ensure that you’re protecting one of your most valuable assets.
As the only dedicated dual Brand and HR experts in Australia, Dovetail Brand Engagement are well placed to bring objectivity and the essential expertise needed to best position your brand with a long term vision and to future proof your business for the competitive challenges ahead. More >