Lux­ury names go un­der­cover

New brand­ing trend for­goes the use of lo­gos or other brand­ing iden­tity

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - ILSE DU PLESSIS

NO LOGO is, of course, the name of Naomi Klein’s best­selling book, a book in which she has a bit of a go at global brands. By all ac­counts, it is also the name of a new trend in brand­ing.

In an ar­ti­cle that ap­peared in World Trade­mark Re­view, Jack El­lis dis­cusses the seem­ingly ab­surd fact that some com­pa­nies are start­ing to sell their prod­ucts with­out lo­gos or other brand­ing. He men­tions Louis Vuit­ton as an ex­am­ple: the com­pany is ap­par­ently sell­ing a new line of cloth­ing with­out a logo. An­other lux­ury goods com­pany men­tioned is the leather goods man­u­fac­turer, Bottega Veneta, which has been sell­ing sans logo for some time. So, why would any com­pany do some­thing that is so counter-in­tu­itive?

We have, af­ter all, been brought up to be­lieve that the trade­mark is the sign by which con­sumers iden­tify goods, the sign that they use to guide them when they want to buy more of the same. Well, the rea­son­ing is not that easy to fol­low, but it goes some­thing like this: the Chi­nese — who are, of course, the main buy­ers of lux­ury goods these days — are mov­ing on to that post-noveau riche stage, when qual­ity be­comes more im­por­tant than flash. An in­creas­ing num­ber of Chi­nese con­sumers, it seems, still want high qual­ity lux­ury prod­ucts, but they don’t want big name brands, which they see as be­ing brash and over­stated. These con­sumers have there­fore started buy­ing prod­ucts from equally good, but lesser known, de­sign­ers. The big lux­ury goods man­u­fac­tur­ers have re­sponded to this trend by sell­ing un­branded prod­ucts, the sug­ges­tion ap­par­ently be­ing that their brands are so cool or so well known that they don’t need any­thing as mun­dane as a name or logo.

Chi­nese com­puter man­u­fac­turer Len­ovo — which has ac­quired IBM’s ThinkPad trade­mark — is con­sid­er­ing drop­ping the Len­ovo trade­mark from the ThinkPad prod­uct be­cause it be­lieves that many con­sumers re­gard Chi­nese brands as be­ing syn­ony­mous with low-end, mass pro­duced prod­ucts. The com­pany thinks that keep­ing its name off the prod­uct will avoid rep­u­ta­tional dam­age to its new brand.

Psy­chol­o­gists would, of course, have a field day with all this. But what are the le­gal im­pli­ca­tions of sell­ing un­branded goods? How, for ex­am­ple, do you deal with coun­ter­feits? It goes with­out say­ing that if your prod­uct has no brand­ing

Al­though names and lo­gos can be eas­ily copied, the one thing that the coun­ter­feiter can’t repli­cate is the high qual­ity of the prod­uct

on it, you can­not rely on trade­mark law to stop copy­cat prod­ucts. Yes, you may be able to rely on de­sign law if you have a de­sign reg­is­tra­tion for the ac­tual prod­uct, or even com­mon law rights if the look and feel of the prod­uct is closely as­so­ci­ated with you, but cases like this are un­usual.

Yet it is held in Jack El­lis’s ar­ti­cle that the lack of a brand name or logo is not a prob­lem when it comes to lux­ury goods. Why? Well, he ar­gues that al­though names and lo­gos can be eas­ily copied, the one thing that the coun­ter­feiter can’t repli­cate is the high qual­ity of the prod­uct. But what if the punter isn’t even that wor­ried about the qual­ity of the prod­uct, and sim­ply wants the ex­clu­sive brand name or logo? Not a prob­lem, he says, if the orig- inal prod­uct doesn’t fea­ture the name or logo, the copy­cat can’t ei­ther.

Says El­lis: “I don’t think that re­mov­ing lo­gos from the out­side of prod­ucts will nec­es­sar­ily make coun­ter­feit­ing eas­ier. In fact, it may ac­tu­ally de­ter coun­ter­feit­ers, as of­ten peo­ple who buy coun­ter­feits do so to be able to show they have a prod­uct by that brand.” In any event, ar­gues El­lis fur­ther, com­pa­nies who sell un­branded goods are still likely to use sub­tle forms of brand­ing— think in­ter­nal brand­ing in the lin­ing, or ac­com­pa­ny­ing brand­ing like guar­an­tee cards. Coun­ter­feit­ers ap­par­ently find this kind of brand­ing very dif­fi­cult to copy.

The ar­ti­cle also deals with an­other le­gal im­pli­ca­tion which re­lates to the non-use of trade­marks. The law in most coun­tries is that if you don’t use a reg­is­tered trade­mark for a con­tin­u­ous pe­riod of five years the reg­is­tra­tion can be can­celled. But this is un­likely to be a real prob­lem in cases where a com­pany sim­ply re­duces the use of its brand name or logo, be­cause the lim­ited use will still be use of the trade­mark. In any event, if the com­pany does fol­low the route of sub­tle in­ter­nal or ac­com­pa­ny­ing brand­ing, this will prob­a­bly count as use of the trade­mark. And if the com­pany does, in fact, cease all use of its brand name or logo, well then it prob­a­bly won’t be too con­cerned if it loses its trade­mark rights!

An­other le­gal con­se­quence is that the scal­ing down of the use of the brand name or logo may re­sult in a re­duc­tion in the brand’s rep­u­ta­tion. This could be im­por­tant, be­cause trade­mark law gives ex­tra pro­tec­tion to a reg­is­tered trade­mark with a rep­u­ta­tion — this is the con­tro­ver­sial pro­tec­tion against di­lu­tion, as op­posed to the pro­tec­tion that all trade­marks have against con­sumer con­fu­sion. If a well-known trade­mark loses its rep­u­ta­tion some­what, it may con­ceiv­ably lose this form of pro­tec­tion. On top of that, the com­mon law ac­tion of pass­ing off is only avail­able to trade­marks that have ac­quired a rep­u­ta­tion or good­will through ex­ten­sive use.

I am not con­vinced that the no-logo trend is go­ing to take off in a big way. How­ever, if you are con­sid­er­ing tak­ing this route, I would sug­gest that you con­sider the le­gal con­se­quences first.

NO LOGO Louis Vuit­ton is ap­par­ently sell­ing a new line of cloth­ing with­out a logo.

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