When the worlds of brands col­lide

Reg­is­ter­ing trade­marks may not al­ways be enough to avoid con­flicts

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - JEREMY SAMP­SON

HOW much would you spend to buy a brand and then close it down? That, of course, is the dream of many a per­son — to reg­is­ter some­thing, or be a cy­ber squat­ter, and then be of­fered so much loot they could re­tire in lux­ury.

In our fast-chang­ing world, reg­is­tra­tions made in the dim past some­times col­lide, with un­ex­pected re­sults. Who would have thought that Ap­ple Com­put­ers reg­is­tered in 1976 would ever come into con­flict with Ap­ple Records, the Bea­tles la­bel, reg­is­tered in 1968? But it did.

Around the globe a brand may be owned by dif­fer­ent peo­ple in dif­fer­ent parts of the world, while some­times the same name is reg­is­tered to dif­fer­ent own­ers with no con­nec­tion. A good lo­cal ex­am­ple is Wool­worths, no re- la­tion to the one in the US, or Australia or the re­cently de­ceased Bri­tish ver­sion. So it’s not a prob­lem if you stay in your own ge­o­graphic playpen, but take care if you ven­ture abroad.

An in­ter­est­ing lo­cal sit­u­a­tion is the small top-notch fi­nan­cial group Mar­riott, founded as Rus­sell & Mar­riott in Dur­ban in the 1850’s. To­day you will know them sim­ply as Mar­riott, the spon­sors of rugby ref­er­ees and play­ing to the slo­gan: “So­lu­tions for Re­tire­ment”. For some years the epony­mous US ho­tel group has been pres­suris­ing the lo­cal group to change its name and cur­tail its op­er­a­tions. Mar­riott Ho­tels is par­tic­u­larly weak in Africa and has no pres­ence in SA; yet ob­vi­ously they want to keep their op­tions open. Mar­riott has re­fused to roll over, quite rightly, and with big brother Old Mu­tual lurk­ing in the back­ground, don’t ex­pect any changes soon.

I no­tice from time to time lo­cal le­gal writ­ers quote the In­ter­brand Best Global Brand rank­ings by value. And we are the Africa pres­ence of In­ter­brand. Av­er­age age of the top 10 was 74 last year. The 2012 ta­bles will be is­sued in early Oc­to­ber. These ta­bles play a sig­nif­i­cant part in un­der­lin­ing the fact that for many com­pa­nies, their ma­jor as­sets are their brands. Lo­cally some com­pa­nies have dif­fi­culty dis­tin­guish­ing be­tween com­pany and brand, let alone know how many brands they own, what the value of each is, and which to fo­cus on.

This year we have al­ready seen a mega trans­ac­tion in­volv­ing the sell­ing off of one of Proc­ter & Gam­ble’s main brands, bought by Kel­logg’s. Glob­ally Pringles potato crisps may have be­come a house­hold name, but I’m not sure any­one lo­cally would have con­sid­ered pay­ing R20bn for one brand. And of course it fits Kel­logg’s per­fectly as the com­pany ex­pands into the snack­ing cat­e­gory.

I couldn’t help won­der­ing if there was one African brand I could buy for that fig­ure? But then with a mar­ket cap of a lit­tle over R16bn I could buy up all Dis­tell’s fifty or so al­co­holic bev­er­age brands and have some change. As an aside I think you will agree Dis­tell is a lead­ing brand in its own right, a name we cre­ated in the year 2000, but at the time I was told it would not be­come a brand. How things change.

Back in 1972 the main Bri­tish banks de­cided to club to­gether and cre­ate their own credit/debit card to combat the US in­va­sion led by Amex, Visa and Mastercard and as a re­sult Ac­cess was born. How­ever by the mid-90’s it be- came ap­par­ent that lo­cal was giv­ing way to global and that Ac­cess had limited prospects. But how to exit grace­fully and what about the con­sid­er­able in­vest­ment? So a brand val­u­a­tion was com­mis­sioned. In the end I re­call a fig­ure of £100m was agreed, a not in­signif­i­cant fig­ure in those days, and the brand was bought by Mastercard.

To­day to glob­ally reg­is­ter any trade­mark is a mouth-wa­ter­ing prospect for lawyers, the cost of which brings tears to the eyes of most clients, and is a con­tin­u­ous chal­lenge to all bran­ders and word­smiths who seek to cre­ate unique monikers.

An in­ter­est­ing le­gal row brew­ing at the mo­ment in­volves Ap­ple. As we are aware a nam­ing pro­to­col has evolved start­ing with the let­ter “i”, so we have iphones, itunes, ipads etc, and a whole way of life. Late last year be­fore his pre­ma­ture death Steve Jobs an­nounced that with the ever-in­creas­ing con­ver­gence, he was work­ing on an “in­te­grated tele­vi­sion set” that was “com­pletely easy to use”.

Jobs and Ap­ple had quickly learned never to cre­ate one offs, but al­ways look to synch with other de­vices and the In­ter­net. The smart money is al­ready pre­dict­ing a UK launch for Christ­mas 2012 of a 42-inch flat screen tele­vi­sion, re­tail­ing at £951 (around R11 000). Ob­vi­ously it should be called the “ITV”.

How­ever, since 1955 there has been a com­pany in the UK called ITV run­ning a tele­vi­sion net­work, it’s a public listed com­pany and is quoted on the London Stock Ex­change.

ITV head Adam Crozier has al­ready told Ap­ple to back off, but as ITV has a mar­ket cap of only R35bn, that would be petty cash for Ap­ple should they de­cide to buy the name or, if nec­es­sary, the en­tire com­pany.

Stranger things have hap­pened than when com­pa­nies have been bought purely to take own­er­ship of the in­tel­lec­tual as­sets — of­ten trade­marks and pa­tents. So for Ap­ple to clear the way for ITV it may well have to buy up the ITV Com­pany, but per­haps an accommodation will be made.

The first step is to test the cur­rent reg­is­tra­tions. They had bet­ter be rock solid.

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