How businesses can effectively use IP rights to leverage brand equity

In India, after the Mergers & Acquisitions boom in 1980s and the liberalization of Indian economy in early 1990s, corporates in India came to terms with the importance of managing brands as one of the most valuable intangible assets. The trickle-down effect was quick and by late 1990s, the Small and Medium Scale Enterprises (SMEs) in India well understood the importance of brands and trademarks across businesses.

The next question amongst business owners was what differentiates a mere name from a strong brand name? A significant brand advantage could be, for example, the fact that it has a larger likelihood of customer choice, which could translate into higher levels of customer loyalty towards the products/services offered by the business entity. As a result, a strong brand normally commands a higher price than competitive products/services in the market. Businesses now were eager to learn more about their brands and their market positioning.

Indian markets recognise unique brand equity with the value premium that the brand owners or business entities enjoy. The extreme level of brand recognition is when such unique brand names transform by its extensive usage into generic terms, few such examples are JCB for land moving machines, Tempos, Gypsy, Aspirin, etc. Further, brands relating to distinct core values, generates unique positioning and a long-term brand strategy correlating with the business entity. At the end of the day, a strong brand is the foundation for creating long-lasting and profitable assets hence making the intellectual property in “brands” as the most important property of the Business.

To benefit from the humongous potential of a business, it is imperative for the brand owner to recognize, secure & appreciate its legal rights over its brands. Registration of different types of intellectual property rights such as trademarks, patents, designs, and copyrights, among others, can ensure the exclusivity or ownership to prevent others from replicating an intellectual property.

It is essential in today’s time to evaluate a company’s worldwide market presence as well as its future objectives when filing for registration of IP rights over a brand. Even though filing applications directly through each country’s national registration system and paying fees to attorneys in each country is one option, in most circumstances, the budget will not be sufficient to cover all conceivable available protection or sometimes a brand may not necessarily be associated with single IP but with a plurality of IP forms to protect its different components. For example, brands like Apple, Ferrari, Coca-Cola, which represents a bundle of IP forms, including several protected word marks, numerous protected graphical signs, trade dress, different combinations of essential components of composite marks, shape marks, etc. Therefore, prioritisation and determining what offers the most value in terms of aggressive IP protection is necessary.

Having said the above, the formation of a brand is the first step in brand management. Many new products fail because their producers fail to generate a brand name that reminds consumers of the product’s availability or that makes consumers think of the product as useful, desirable, or simply superior to similar offerings.

This could be the result of something as simple as choosing a brand name that lacks corporate identity. A good brand name can make or break a product’s success. Finding a perfectly suited brand name for a product/service or an entity on the other hand is an uphill task for the proprietor or the inhouse counsel. It begins with a thorough examination of the product/service, its benefits as well as the target customers and markets, and, last but not least, the company’s vision and values. A good brand name is distinguished by its uniqueness, connects with the public at large, is easy to remember and does not leave any room for confusion with any other existing brands.

Often, the evaluation of an entity’s rights over a brand is construed differently in different facts of the matter. The proprietors should be aware that merely applying for a similar mark registration in a different product class or service class may not suffice and the Court’s may still be of opinion that the mark may confuse the Customers of an already registered mark in the same class. In United States Polo Association, Inc. v. Polo Ralph Lauren USA Holdings, Inc., U.S.P.A moved its use of the double horseman mark, earlier only on clothing, to use in connection with fragrances. The Court denoted that consumers could think that U.S.P.A products are actually made by Polo Ralph Lauren. Based on this, an order was issued excluding the U.S.P. A’s use of either the double horseman logo or the word “polo” in connection with fragrances.

As a result, branding is not just about developing a brand strategy, but also about protecting and enforcing intellectual property rights. If there is an infringement, one common remedy is to impose a sanction to prevent the unlawful use of the deceptively similar mark as well as award of damages to compensate for the loss caused by such infringement. In order to build a powerful brand, IP rights registration and brand management are essential.

Trademarks, copyrights, and trade dress are all effective strategies for increasing a brand’s potential value. Further, a prompt and forceful enforcement of all IP rights by pursuing legal action against any party trying to misuse or exploit the IP for their unfair advantage. After all, the Courts also see how vigilant a proprietor is over its IPs, and accordingly the brand owner who is actively defending its brands and not allowing anyone to use the brands without consent will have better chances of success against future infringers as well. Lastly, businesses building up their brands and overall reputation should also be mindful of how the brands are being promoted and presented in the market vis-à-vis competitors. Merely having registrations as trademarks, copyrights, patents, or designs, while essential but may not suffice in today’s competitive markets. Therefore, the need is that the brands and businesses’ image are seen as composite reputation and every effort shall be made by the proprietors and counsels to identify brands, protect, popularize and enforce all IPs by ever evolving innovative means.

Shrimant Singh is Partner and Khushboo is Associate, S&A Law Offices.

(The one-stop destination for MSME, ET RISE provides news, views and analysis around GST, Exports, Funding, Policy and small business management.)

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