News

Protect and Survive

06 March 2006 By db staff writer

Marketing / Trademarks – Wine companies can be lax when it comes to researching and registering brand names, but doing so can cost a lot less than running foul of the law, says Lynne Whitaker

For marketeers working in the wine and spirits arena, dreaming up new brand names may seem a welcome opportunity to demonstrate their creativity. But it can also be the cause of extreme frustration, as most of us working in the industry will testify from bitter experience.

To the outsider, generating a name for a new wine, beer or spirit may seem quite a simple task – and, indeed, when the creative juices are flowing, the name-generation process can be a lot of fun. The difficult part lies in finding a name that is not just original, relevant and appealing – but also in finding one that is free from the risk of trademark infringement.

Trademarks are a complex and specialised area, and one in which few people working in the drinks industry, particularly wine, seem well versed. In approaching a number of people for their views on the subject, I found not one who was prepared to be publicly quoted, although a number were willing to share their views anonymously. This suggests a distinct lack of confidence in the subject, a view borne out by Camilla Sexton, a registered trademark attorney with Wildbore & Gibbons, a leading independent firm of trademark specialists.

“Trademarks are perhaps not viewed as a high priority in the drinks arena. Those working in service industries are sometimes more diligent in protecting their brand names, whereas in drinks, brands seem to come and go quite quickly and so are perhaps not deemed worthy of protecting,“ explains Sexton. “We do have a lot of smaller clients working in the drinks trade, and, understandably, there is a lack of uniformity in terms of responsibility for trademark protection. We may deal with anyone from the owner of the business, through to a brand manager or a secretary.”

Sexton’s view seems to be shared by those working in the industry; few companies claim to have a budget set aside for trademark registration, and one senior manager working for a leading wine importer commented that, “Industry-specific information and knowledge on the subject is fairly limited… Compared to other industries, we do not have the funds to invest in trademark protection.”

So why should we worry about trademarks at all? Do we really need to register names for our products when their shelf-life may be short? And what is the point of protecting a trademark in the first place?

In principle, the purpose of a trademark is to help consumers to distinguish between one product and another – a unique “badge of origin” that may include words, logos, pictures, or even shapes. Once a company has invested in developing a unique mark, it is hard to protect it from plagiarism unless that mark is protected by an official registration.

Look before you leap
Given the relatively low costs of registering a mark, and the fact that a product’s sales may well grow to exceed initial expectations, it does make sense to protect it from the outset. An initial trademark registration lasts 10 years, although it is renewable. Even so, a trademark owner who fails to use the mark for a continuous period of five years risks having it cancelled by another prospective user, unless he can prove use.

If a producer fails to register the mark and simply launches his product under a particular name without protection, he risks that mark being subsequently registered by a competitor, who may then have a legal right to use it. UK trademark law generally favours the first to register a mark, rather than the first to use it.

Perhaps more important still is the need to search for existing registrations that may be infringed by a new brand launch. There have been numerous instances of wines launched without a registration search, which have subsequently been withdrawn from the market after a protest of infringement by the legitimate owner of that mark – and might call for the destruction of stock.

Sexton urges all prospective brand owners to conduct a thorough search for registrations in their chosen markets before making any significant commercial investment. A so-called identical search may be conducted on-line, but this will not highlight potential conflicts from similar marks, which are often the cause of an infringement. A UK search will cost around £300 and take seven to 10 days.

What many brand owners do not realise, however, is that they also need to ensure that a conflicting mark is not already registered in the country of origin, as well as in the proposed country of sale. For example, a French brand owner wishing to launch a brand in the UK must check availability of his proposed mark not just in the UK, but also in France, since exporting a mark is deemed a commercial activity, which would infringe the rights of someone who may already own the mark in France.

For brand owners wishing to target numerous export markets, the answer may lie in applying for a CTM (Community Trade Mark) registration. At a total cost of around £2,000 to cover all 25 EU member states, this represents excellent value. The downside is that there is no central search facility for the EU, which means you will still need to search for conflicting marks in the key markets before using the mark.

A further problem with the CTM registration is the length of time it takes to process. While a UK registration will normally succeed in around six months, a CTM can often take around 18 months, although the likelihood of its meeting an objection would normally become clear within around nine months – still an impossibly long time for the company anxious to launch its brand.

An alternative, and sometimes more practical, solution for those looking to export their products, lies in the IRS or International Registration System. This is a system covering 60 member countries (including those in the EU) that enables a company to register its trademarks in selected countries, and so can be more flexible than a CTM registration, which could be blocked simply by meeting an obstacle in any one of the 25 EU states.

The help of a firm of trademark specialists can ensure at least some basic protection for our brands. But how do we set about that difficult business of generating brand names which are free from potential conflict? Think of virtually any French word or phrase with which the UK consumer might be familiar, for instance, and a trademark search will reveal that someone else has got there before you.

Rules of thumb
Wildbore & Gibbons highlight the effectiveness of “made up” brand names in other product sectors – Kodak, for instance, for cameras – or names used in an unusual context – Apple for computers, for example. Perhaps this is one answer for the drinks trade.

Geographical names are a very precarious area, and anything that implies that the wine may come from a particular place is a non-starter, though you may get away with the name of a landmark. Generic or descriptive terms are almost impossible to register – for instance, it’s unlikely that “Rouge” would be acceptable as a brand name for wine. In such instances, you might be able to register the label design, but you will need to ensure your registration remains up to date as the design evolves.

Once you have the perfect brand name, and have obtained a successful registration, you may also wish to consider investing in a trademark watching service. At a cost of around £40 per year per brand, this informs you of new applications that may infringe your mark, and gives you the opportunity to oppose them.

With this in mind, you also need to ensure your company maintains records of commercial use of your mark in case you need to defend it in the future – for example with labels, invoices, advertising material, and so on.

If all this seems like a lot of effort, it’s worth remembering that you might be developing a brand that becomes extremely valuable.

Search for possible registration conflicts with your name
Search both in the country of origin, and in each of the export markets where you intend to sell
Apply to register the mark in all of those countries

DON’T

Rely on an identical on-line search – it’s a useful starting point, but won’t highlight similar marks that could cause a problem at a later date
Attempt to register names that are very similar to existing marks, or that are geographical, or that are too generic in nature

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