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10 September 2009

Making Your Mark

While the issue of trademark law may seem like an afterthought for most brand owners, it is a fundamental (and valuable) part of the branding process.

In 1995, an Irish company called Glanmire (now known as Punch Industries) based in Little Island, Co Cork celebrated the birth of a new product. The product - a sheet used in washing machines to trap colour runs, and prevent laundry accidents - has grown to be an international best-seller and is now the market leader in colour protection.

This product is known as Colour Catcher, and is a well-known brand in a large number of international markets, including all countries within the European Union, the United States, Japan, Russia, Australia, New Zealand and Saudi Arabia.

The value of Colour Catcher lies mainly within its intellectual property (IP) such as trademarks and patents. Punch Industries own registered trademark rights in the name Colour Catcher in most major countries around the world and Colour Catcher is also the subject matter of patent protection in many European countries.

It has become increasingly apparent that brands are among the most stable assets of any company. They can increase the value of a company even in difficult market conditions. However, brands can lose value if they are not managed well. These are lessons that small and medium businesses can and should learn from the global market movers.

Owners of small or medium sized businesses often don't think about their trademarks. If they do, they assume trademark matters are only for large companies like Microsoft or Coca-Cola. In the day-to-day rush of business, tangible issues such as sales and cash flow tend to become the primary focus, leaving IP matters at the bottom of the list. The value of IP to a company, however, is real and important. Imagine what would happen if 'Colour Catcher' no longer belonged exclusively to Punch Industries simply because someone else registered the trademark before Punch got round to doing so?

In essence, losing a trademark could, in a worst case, destroy a company. An unprotected or unprotectable trademark not only costs a company but also serves to help the competition. Many entrepreneurs and small business owners are not aware of the importance of registering their trademark (ie. business/trade or product name, etc). A good number believe that a company or online domain name registration gives them the right to use the name and/or prevent others from using it - which is totally erroneous.

A prudent business owner would at a very early stage, take steps to protect their company name. In fact, before even registering a company name with the Companies Registration Office, it would be useful to perform trademark clearance searches to determine if anyone else already owns a registered trademark for an identical or similar name. These searches can help businesses avoid incurring liability for trade mark infringement and also avoid investing resources in a name which could be unusable due to another's earlier trademark rights. They should also take immediate steps to seek trademark protection of their business/company name.

Trademark rights are similar to any other property rights. As with assets such as real estate, you can sell or licence your trademark to others. More importantly, registered trademarks are quantifiable assets in their own right and can command a presence on a company's balance sheet, which enhances the value of a business for potential investors, lenders, purchasers and public offerings. A registered trademark is clearly an asset which should be sought by any business. Happily, this asset is much more affordable than real estate.

In Ireland, some of the most important brands today are Denny, Fyffes and Dubarry. These brands are so successful that they are now widely recognised as being the most sought after products by Irish expatriates, thus further enhancing their brand recognition worldwide.

To conclude, I leave you with a quote from the former CEO of Quaker Oats, John Stuart: "If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trademarks, and I would fare better than you."

Sumi Nadarajah, FRKelly

(Published in Checkout Magazine, August 2009)