Brand Identifiers are Key to Managing Competition

October 27, 2021

The brand name and codes play an important role in the management of competition.

Inevitably competitors will try to capture some of the market shares of any brand that discovers a lucrative market opportunity. They copy business models, and any aspect of a business’ successful branding, be it, by introducing new features, copying its positioning, or even using similar names or brand identifiers. Some will copy blatantly, others are more savvy so will copy what they calculate they can get away with.

People’s sense of what is unethical and unfair copying is often out of line with the law’s approach to regulating competition. For example, the law won’t generally stop copying of ideas or business models or colours of other brands unless these are trademarked.

Sophisticated competitors who are aware of what they can get away with might have even taken legal advice to understand what a brand has and has not protected.

Much of the copying that takes place in business is impossible or very difficult to put a stop to. It might involve lengthy legal proceedings with an uncertain outcome. Therefore, legal protection needs to be an uppermost consideration when choosing or changing brand codes because legal ownership is fundamental to effective protection of uniqueness of a brand’s identifiers.

Protecting brand identifiers is the way to avoid the possibility of consumer confusion as to the source or origin of a brand. Otherwise, there is a real risk that brand’s identifiers are copied by competitors, so they cease to be unique to the brand and lose their ability to perform their essential function.

 

Take Coca Cola as an Example

Coca Cola was driven to create its iconic bottle to fend off copying. Competitor brands were copying the company using names like Koka-Nola, Ma Coca-Co, Toka-Cola, and even Koke. They copied or only slightly modified the font of its logo, and their bottles created confusion among consumers, many of whom were illiterate. While Coca-Cola litigated against these copyists, the cases took years to produce results so Coca Cola decided to develop a unique bottle shape that even illiterate customers would be able to distinguish from imitators. This would reduce the effectiveness of copycats.

Essentially this is the role of brand codes – to uniquely identify your brand so there is no confusion. Some identifiers can be protected and owned as trademarks as soon as you create them. Others are extremely difficult to secure as trademarks and need a strategy to achieve.

Shapes are one of those brand identifiers that are very challenging to secure as trademarks.

The way Coca Cola was able to trademark its bottle shape involved a long-term strategy that took about 15 years to achieve. Firstly, the company had the right legal agreement with the designers of its iconic bottle shape when it commissioned the bottle design so that it would own the rights in the bottle design.

Secondly, once they had their new bottle design, they made strategic use of the available IP protections by registering the design of the bottle shape (called a design patent in the US).

This initial design registration gave the company a way to preserve the uniqueness of the shape to the Coca Cola brand. The registration gave them the legal right to fend off copying once the bottle was put in use because copying by competitors can be quickly challenged and stopped when you can rely on registered IP rights. Registered IP rights give a business access to speedier and more effective legal remedies.

Thirdly, Coca Cola gradually associated its bottle shape in consumers’ minds with its name by using clever advertising that consistently featured the bottle shape along with the Coca Cola name. Getting trademark rights over shapes involves the need to provide evidence that the shape alone is uniquely associated with a brand. So, gradually Coca Cola would have had to feature the bottle shape without their name sometimes so consumers would recognise the shape alone. After some 14 years, the company had survey evidence establishing that there was sufficient awareness of the shape among the public, that the bottle design had become synonymous with the Coca Cola brand. That is when the company had the necessary proof that the shape had a secondary meaning, that is, that it was a symbol of its brand, and merited protection as a trademark.

While design rights over a shape only last a finite period of time a trademark lasts forever PROVIDED you use it and renew your trademark registration every 10 years. Potentially Coca Cola will have this monopoly right over its distinctive bottle shape forever provided it continues to make use of the bottle shape and keeps evidence of its use in case competitors challenge its rights and apply to cancel its trademark registration.

When competitors copy a brand’s unique identifying characteristics, such as if they copied Coca Cola’s bottle shape in this example, the brand needs a legal basis by which to challenge the copying. The legal process provides easier and quicker remedies to brands when protected IP rights such as its registered designs or trademarks are infringed by competitors.

 

Litigation

Litigation plays a role in preserving a brand’s uniqueness because as a brand becomes more famous it attracts more copycats. Enforcing your registered rights is an important way to protect your brand’s distinctiveness. Litigation costs would be far higher, and the burden of proof of confusion would be much more difficult, if not impossible to establish to the satisfaction of the court if you just relied on unregistered passing off rights. In some countries, there is no equivalent to passing off so you get no protection at all unless you register trademarks.

A brand will be less successful in its legal actions if it does not have registered IP rights. And usually, if brand identifiers have not been legally protected there may be no legal remedies available at all to challenge competitor copying, not even passing off. So, prioritising legal ownership of the brand identifiers by which consumers recognise a brand is key.

For small new brands, litigation is often not possible. However, protection of brand identifiers is even more important for them because having registered rights puts them in a strong position and deters copying as well as reducing the risk that another business would choose a similar brand identifier because your ownership is recorded on public registers that people are expected to search before they choose brand identifiers. So, having registered IP rights like trademarks reduces the likelihood that a new brand would get embroiled in litigation.

If Coca Cola had simply had a bottle designed and used that bottle without bothering with legal protection and just focused on getting the bottle shape associated with its brand, it would have had little chance of being uniquely associated with the bottle shape due to competitor copying. Even if it had become well-known by reference to the bottle shape, it would have been impossible to avoid consumer confusion because for an identifier to be legally distinctive it is essential to legally own it in your category. Fame alone is not enough.

Therefore, as well as making frequent and consistent use of codes so they become famous for your brand you should also make those sure codes can be unique to your brand. You do that by thinking about how to legally protect the codes.

Shireen Smith , advises SMEs on how to turn ideas for new business concepts, products or services into protectable IP. Building a business on strong legal and IP foundations is how you increase the value of a business. For help to create, identify, protect, and defend your business assets.

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