Legal Branding Considerations

According to Dorothy Cohen, under common law, “a ‘technical’ trademark is

defined as any fanciful arbitrary, distinctive, and nondescriptive mark, word, letter,
number, design, or picture that denominates and is affixed to goods; it is an
inherently distinctive trade symbol that identifies a product.” She maintains that
trademark strategy involves proper trademark planning, imple- mentation, and
control, as follows:
• Trademark planning requires selecting a valid trademark, adopting and
using the trademark, and engaging in search and clearance processes.
• Trademark implementation requires effectively using the trademark
in enacting marketing decisions, especially with respect to promotional and
distributional strategies.
• Trademark control requires a program of aggressive policing of a
trademark to ensure its efficient usage in mar- keting activities, including
efforts to reduce trademark coun- terfeiting and to prevent the trademark
from becoming generic, as well as instituting suits for infringement of the
trademark.
This appendix highlights a few key legal branding considerations. For more
comprehensive treatments, it is necessary to consider other sources.
Counterfeit and Imitator Brands
Why is trademark protection of brand elements such as brand names, logos,
and symbols such an important brand management priority? As noted above,
virtually any product is fair game for illegal counterfeiting or questionable copycat
mimicking— from Nike apparel to Windows software, and from Similac baby
formula to ACDelco auto parts.
In addition, some products attempt to gain market share by imitating
successful brands. These copycat brands may mimic any one of the possible brand
elements, such as brand names or packaging. For example, Calvin Klein’s popular
Obsession perfume and cologne has had to withstand imitators such as
Compulsion, Enamoured, and Confess, whose package slogan proclaimed, “If you
like Obsession, you’ll love Confess.”
Many copycat brands are put forth by retailers as store brands, putting
national brands in the dilemma of protecting their trade dress by cracking down
on some of their best customers. Complicating matters is the fact that if
challenged, many private labels contend, with some justification, that they should
be permitted to continue labeling and packaging practices that have come to
identify entire categories of products rather than a single national brand. In other
words, certain packaging looks may become a necessary point-of-parity in a
product category. A common victim of brand cloning, Contac cold medication
underwent its first packaging overhaul in 33 years to better prevent knockoffs as
well as update its image.
 Many national brand manufacturers are also responding through legal
action. For national brands, the key is proving that brand clones are misleading
consumers, who may think that they are buying national brands. The burden of
proof is to establish that an appreciable number of reasonably acting consumers are
confused and mistaken in their purchases. In such cases, many factors might be
considered by courts in determining likelihood of confusion, such as the strength
of the national brand’s mark, the relatedness of the national brand and brand clone
products, the similarity of the marks, evidence of actual confusion, the similarity
of marketing channels used, the likely degree of buyer care, the brand clone’s
intent in selecting the mark, and the likelihood of expansion of the product lines.
Simonson provides an in-depth discussion of these issues and methods to assess
the likelihood of confusion and “genericness” of a trademark. He stresses the
importance of recognizing that consumers may vary in their level or degree of
confusion and that it is difficult as a result to identify a precise threshold level above
which confusion occurs. He also notes how survey research methods must accurately
reflect the consumers’ state of mind when engaged in marketplace activities.
Historical and Legal Precedence
Simonson and Holbrook have made some provocative observations about
and connections between appropriation and dilution, making the following
points. They begin by noting that legally, a brand name is a “conditional-type
property”— protected only after it has been used in commerce to identify
products (goods or services) and only in relation to those products or to closely
related offerings. To preserve a brand name’s role in identifying products, the
authors note, federal law protects brands from actions of others that may tend to
cause confusion concerning proper source identification
By contrast with the case of confusion, Simonson and Holbrook identify
trademark appropriation as a developing area of state law that can severely curtail
even those brand strategies that do not “confuse” consumers. They define
appropriation in terms of enhancing the image of a new offering via the use of some
property aspect of an existing brand. That is, appropriation resembles theft of an
intangible property right. They note that the typical argument to prevent imitations
is that even in the absence of confusion, a weaker brand will tend to benefit by
imitating an existing brand name. Jerre Swann similarly argues that “the owner of
a strong, unique brand should thus be entitled, incipiently, to prevent impairment
of the brand’s communicative clarity by its substantial association with another
brand, particularly where there is an element of misappropriation.”
Simonson and Holbrook also summarize the legal concept of trademark
dilution:
Protection from “dilution”—a weakening or reduction in the ability of a
mark to clearly and unmistakably distinguish the source—arose in 1927 when a
legal ruling declared that “once a mark has come to indicate to the public a
constant and uniform source of satisfaction, its owner should be allowed the
broadest scope possible for the ‘natural expansion of his trade’ to other lines or
fields of enterprise.”
They observe that two brand-related rights followed: (1) the right to
preempt and preserve areas for brand extensions and (2) the right to stop the
introduction of similar or identical brand names even in the absence of consumer
confusion so as to protect a brand’s image and distinctiveness from being diluted.
Dilution can occur in three ways: blurring, tarnishment, and
cybersquatting. Blurring happens when the use of an existing mark by a different
company in a different category alters the “unique and distinctive significance”
of that mark. Tarnishment is when a different company employs the mark in order
to degrade its quality, such as in the context of a parody or satire. Cybersquatting
occurs when an unaffiliated party purchases an Internet “domain name consisting
of the mark or name of a company for the purpose of relinquishing the right to that
domain name to the legitimate owner for a price.”
New American laws register trademarks for only 10 years (instead of 20);
to renew trademarks, firms must prove they are using the name and not just holding
it in reserve. The Trademark Law Revision Act of 1988 allowed entities to apply
for a trademark based on their “intent to use” it within 36 months, eliminating the
need to have an actual product in the works. To determine legal status, marketers
must search trademark registrations, brand name directories, phone books, trade
journals and advertisements, and so forth. As a result, the pool of potentially
available trademarks has shrunk.
The remainder of this appendix describes some of the particular issues
involved with two important brand elements: brand names and packaging.
Trademark Issues Concerning Names
Without adequate trademark protection, brand names can become legally
declared generic, as was the case with vaseline, victrola, cellophane, escalator, and
thermos. For example, when Bayer set out to trademark the “wonder drug”
acetylsalicylic acid, they failed to provide a “generic” term or common descriptor
for the product and provided only a trademark, Aspirin. Without any other option
available in the language, the trademark became the common name for the
product. In 1921, a U.S. district court ruled that Bayer had lost all its rights in the
trademark. Other brand names have struggled to retain their legal trademark status,
for example, Band-Aids, Kleenex, Scotch Tape, Q-Tips, and Jello. Xerox spends
$100,000 a year explaining that you don’t “Xerox” a document, you photocopy it.
Legally, the courts have created a hierarchy for determining eligibility for
registration. In descending order of protection, these categories are as follows
(with concepts and examples in parentheses):
Fanciful (made-up word with no inherent meaning, e.g., Kodak)
Arbitrary (actual word but not associated with product, e.g., Camel)
Suggestive (actual word evocative of product feature or benefit, e.g.,
Eveready)
 Descriptive (common word protected only with secondary meaning, e.g.,
Ivory)
Generic (word synonymous with the product category, e.g., Aspirin)
Thus, fanciful names are the most easily protected, but at the same time are
less suggestive or descriptive of the product itself, suggesting the type of trade-off
involved in choosing brand elements. Generic terms are never protectable. Marks
that are difficult to protect include those that are surnames, descriptive terms, or
geographic names or those that relate to a functional product feature. Marks that
are not inherently distinctive and thus are not immediately protectable may attain
trademark protection if they acquire secondary meaning.
Secondary meaning refers to a mark gaining a meaning other than the
older (primary) meaning. The secondary meaning must be the meaning the public
usually attaches to the mark and that indicates the association between the mark
and goods from a single source. Secondary meaning is usually proven through
extensive advertising, distribution, availability, sales volume, length and manner
of use, and market share. Secondary meaning is necessary to establish trademark
protection for descriptive marks, geographic terms, and personal names.
Trademark Issues Concerning Packaging
In general, names and graphic designs are more legally defensible than
shapes and colors. The issue of legal protection of the color of packaging for a
brand is a complicated one. One federal appeals court in San Francisco ruled that
companies cannot get trademark protection for a product’s color alone. The court
ruled against a small Chicago manufacturer that makes green-gold padding used
by dry cleaners and garment makers on machines that press clothes; the
manufacturer had filed suit against a competitor that had started selling padding
of the same hue. In rejecting protection for the color alone, the court said
manufacturers with distinctively colored products can rely on existing law that
protects “trade dress” related to the overall appearance of the product: “Adequate
protection is available when color is combined in distinctive patterns or designs or
combined in distinctive logos.”
Color is one factor, but not a determinative one, under a trade dress
analysis. This ruling differed from a landmark ruling in 1985 arising from a suit by
Owens-Corning Fiberglas Corporation, which sought to protect the pink color of
its insulation. A Washington court ruled in the corporation’s favor. Other courts
have made similar rulings, but at least two other appeals courts in other regions of
the country have subsequently ruled that colors cannot be trademarked. Note that
these trademark rulings apply only when color is not an integral part of the
product. However, given the lack of uniform trademark protection across the
United States, companies planning a national campaign may have to rely on the
harder-to-prove trade dress arguments.