The Role of Corporate Counsel in Brand Protection
By Eric Ziehlke, Partner at Swaab, specifically for ACC Australia members
One of the most important responsibilities of corporate counsel is to protect the legal assets of their organisation. For many organisations, their brands can be their most valuable legal asset. Corporate counsel should recognise that brands can be a primary source of revenue and profit for their organisation. As a consequence, corporate counsel have a key role in identifying, valuing and protecting the brand portfolios of their organisation.
Identification
It is important to carry out a regular stocktake of your brands. All your brands should be exhaustively listed and their ownership verified. It may be that some of your brands are owned by now defunct companies. It may be that the copyright in devices and images contained in your brands actually vest in the advertising or design agencies which created them. If your organisation is using any brands under licence to third parties, you should ensure that it is complying with the licence terms.
Valuation
Brands are often seriously under-valued by the companies who own them. It is important to remember that brands not only provide increased sales, they can also deliver those sales at a premium price. The effect of a strong brand on your organisation's profitability can therefore be crucial. For this reason, the best way of valuing a brand is to assess the long-term effect on company profitability should that brand be lost.
Protection
The essential way to protect brands is to register them as trade marks. All distinctive brands should be registered for all the goods and services for which they are used or likely to be used. Brands should be registered as trade marks in all countries in which your organisation operates or intends to operate. Many people believe that the registrations of company names and business names on the relevant registers provide them with effective ownership and protection of those names. This is not the case. Company and business name registration provide no proprietary ownership in those names. The only way to obtain proprietorship in company and business names is to register them as trade marks. It is strongly advisable for a organisation to set up a brand book specifying the layout, font and content of its brands. In this way, it can ensure that its brands are consistently represented in its market. You should regularly monitor your organisation's brands to ensure that your trade mark registrations are updated and renewed.
Marketing Liaison
One of the major issues for corporate counsel in protecting the legal assets in its brands is that the creation and exploitation of these brands is often in the hands of the organisation's marketers. Unfortunately, these marketers may not be fully aware of the legal implications of their brand activities. The selection by marketers of generic or potentially infringing brands can severely reduce the value of a brand or expose the organisation to legal action. The failure of marketers to use their brands in a consistent and continuous manner can even lead to their removal from the register. Failure to register brands for all goods and services in all relevant jurisdictions can leave the brands unprotected against competitive brands. Corporate counsel therefore have an important role in educating marketers in the legal aspects of brand management, monitoring the brand portfolio and ensuring that the relevant legal procedures are enforced.
Financial Liaison
Brands do not usually appear as legal assets on the organisation's balance sheet. As a consequence, individual brands are rarely given any specific valuation. Financial managers may not fully appreciate the importance of brand recognition in providing dedicated shelf space, repeat purchase behaviour and higher margins in the marketplace. The value of a brand can be even higher in an online purchasing situation where brand recognition is often the crucial determinant in purchase decisions. Corporate counsel should therefore ensure that financial managers understand the true value of brands as legal assets and of the need to protect them. Corporate counsel should keep financial managers informed of the legal implications of any financial transactions involving brands.
The Legal Dimension
The first step in developing a comprehensive brand protection strategy is for corporate counsel, in company with marketers and financial managers, to identify, value and protect the intellectual property in their brands. Once these safeguards are in place, brands can then be exploited to the full. Swaab can offer you a free Brand Health Check on the trade marks in your brand names and the copyright in your logos and livery. You may find this process to be a valuable first step in protecting your organisation's brands as legal assets.
Eric Ziehlke
Phone: 02 9777 8387
Email: ejz@swaab.com.au
