Strategizing brand protection and management to augment company value
31 July 2022
A company’s value is directly attributed to its intangible assets, including intellectual property, such as trademarks, trade dress, patents, copyrights, domain names and trade secrets. IP assets are considered strategic drivers of brand value, helping underpin and sustain a company’s market position. An important aspect of building the company’s value and market presence is effective management and protection of the IP assets and products. Integrating the right brand strategies from the early stages can benefit the company’s bottom line and valuation profitably.
One of the vital brand value-drivers of a company are trademarks. Brand names, brand logos, product labels and packaging, trade dress, slogans – all of which are protectable as trademarks – not only help customers and the public identify a company’s products and services and distinguish them from others in the market, but also strengthen the company’s ability to exploit new markets through exclusive ownership and monopoly rights. Extensive and qualitative presence of the trademarks in the market generate brand goodwill, and enable businesses to create customer loyalty, attract investments, generate new revenue streams, establish reputation around expertise and secure lucrative partnerships and contracts. Therefore, trademarks are one of the most effective means of creating long-term value as well as secure proprietary and defensible advantage in the market.
In a fast-growing economy such as India, businesses from rural to urban regions are increasingly competing on innovative branding elements and trademarks, besides advertising and existing goodwill, rather than merely controlling the tangible products and services. Hence, incorporating and implementing a strong brand protection and management strategy from the IP development stage can provide economic advantages in the company’s business, adding to long-term values. Some of the considerations for integrating a strong brand strategy in the company are as follows:
Choosing the right trademark
A brand lifecycle begins with creation of the brand. This includes developing and adopting a unique and distinctive trademark for identifying the desired product or service with the company. The Indian trademarks law recognizes devices, brands, headings, labels, tickets, names, signatures, words, letters, numerals, the shape of goods, product packaging and combinations of colours as marks. Therefore, companies have a wide ambit to conceptualize and develop their trademark. It is important to bear in mind that the more unique, creative and arbitrary the trademark is, the stronger its distinctiveness, distinguishing ability from rivals, recall value and likelihood of obtaining legal protection. Choosing the right trademark can increase the company’s potential to enter new markets and exploit business opportunities. It can also ensure avoiding conflict with other brand owners and potential costs and time in prosecution and litigation. One of the ways to ensure that a trade mark of interest is available for the company’s use and registration is by conducting trade mark clearance searches at an early stage. It is advisable to conduct the clearance search before making investments to launch, advertise and promote the new brand.
Identifying valuable brand assets
To develop a strong trademark strategy, it is essential to identify the marks/brands owned by the company. Timely and systematic identification of the valuable brand assets would enable the company to commercially exploit the IP integrated in a product or service and generate economic benefits. Building a brand inventory can further a company’s interests of deriving value from their brands by accurately delineating its ownership rights and responsibilities in contracts of sales and licensing agreements with third parties. Further, identifying valuable brand assets can enable the company to build a comprehensive trademarks portfolio and management system, which can help quantify the value of its brand assets as well as enhance the value of other assets associated with the brand. Besides, it can also help the company safeguard its brand against counterfeiting and dilutive practices by third parties through enforcement and legal actions.
Protect the brands
One of the most important priorities in a strong brand strategy is to obtain legal protection for the company’s brand assets. This means registering the trademarks for the concerned goods and services in the jurisdictions of interests, keeping in mind expansion plans. In India, a trademark can be protected through registration, which would allow the company, as the trademark owner, to use the trademark exclusively and prevent others from using it. It would also allow the company to enforce its rights against third parties’ conflicting use of similar marks through legal and administrative actions. India follows the common law system of protection to trademarks, which allows protection to unregistered trademarks through passing off actions against any conflicting use by third parties. However, registering the trademark benefits in infringement actions, such as ease of proving ownership over the mark (without requiring to file volumes of documentary evidence) and obtaining injunctive reliefs against third-party infringements. Registering the brands, thus, increases the company’s potential to commercially exploit its brand assets and create a strong presence in the market.
Contractual arrangements with third parties are one of the direct methods of generating revenue through a company’s brand assets. Some of the advantages to a company by licensing or sales of its brand assets include, earning revenue without taking the burden of production and overhead costs, create new revenue streams, enter other markets easily, allow targeted marketing in new or unexplored regions, and diffuse conflicts with third parties by licensing the IP with them instead of taking legal recourse against them. If there are confidential aspects involved in such contractual arrangements, it is important to put in place non-disclosure agreements (NDA) with definite confidentiality clauses, which can help set the right expectations of the company and its partners and outline responsibilities and rights to commercializing and protecting the IP, from the beginning.
The right strategy in brand protection demands companies to proactively manage their IP portfolio and enforce their rights against conflicts in the market. This includes remaining vigilant of conflicting trademarks being applied for registration or used in the market by third parties. Taking prompt action against such conflicts can safeguard the company’s proprietary rights and interests, and prevent the brand asset from becoming diluted, obsolete and losing its commercial value. In India, companies can ensure vigilance by reviewing the Trade Marks Journal published by the Indian Trade Marks Office, and prevent registration of conflicting brands through administrative actions.
Secure corresponding assets
While implementing the strategies for protecting and managing trademarks, a broad view of a company’s related intangible assets must be considered, including the entire value chain and product lifecycle. This would include protection of corresponding key assets, such as domain names and social media profiles, which uses the company’s brand assets. Securing domain names and social media handles through registrations and enforcements will not only complement the company’s trademarks strategy but also prevent potential infringers and squatters from acquiring rights over the corresponding assets first. Securing corresponding assets can also increase valuation of the brand asset associated thereto.
Standard operating procedures
A streamlined and effective brand management system ensures ease of handling internal operations involving the company’s brand assets, which can be achieved by establishing standard operating procedures (SOPs). This would include standardization of protocols to be followed within the organization for specific tasks involving new and existing brands at various stages of the brand lifecycle, starting from creation to commercialisation and enforcements. Regular training and workshops can help internal stakeholders stay aware and updated on evolving issues and trends in the company’s dynamic brand protection strategy. SOPs can also help companies save costs and time in engaging external resources in potential legal actions.
Other tools for brand management: Policies and auditing
Besides SOPs, companies may employ other tools to ensure uniform and better management and protection of brands, such as formulating an IP policy, social media policy, domain name, policy, etc., all involving the company’s brand assets. Another tool for effective brand management is regular auditing of the company’s brand assets, which directly helps review and assess the value of its intangible assets corresponding to the company’s overall valuation, beside identify irregularities in brand management, uncover obsolete brand assets, identify potential threats to existing IP assets, lower maintenance costs and make informed future decisions on better protection.
Without a proper trademarks strategy, a company may become vulnerable to unnecessary challenges and hardships, including lawsuits around the company’s valuable IP assets. Building a strong brand protection and management strategy has a direct impact on the company’s value and long-term gains, other than save costs and time in salvaging lost opportunities and rights. Choosing powerful brands strategy adds to the company value and enhances commercial exploitative opportunities such as adopting measures such as licensing, franchising, or entering into collaborations with third parties. The above strategies are some representative considerations which may help companies to augment the company value.