Protecting the company’s trademark? That’s not my job! (39.985Kb) - DOWNLOAD

In today’s global economy, trademark rights have become valuable business assets.  Consumers pay more for a product bearing a trademark that they recognise and which meets their expectations.  Estimates of the value of some of the world’s most famous trademarks, such as Coca-Cola or IBM, exceed 50 billion dollars each.  As a result, loss or dilution of the company’s trademark translates into serious money.  Channel managers play a vital frontline role in the protection and promotion of the company’s trademark values.  How so?

First, what actually constitutes a trademark?  A trademark is a sign capable of distinguishing the goods or services produced or provided by one enterprise from those of another. Any distinctive word, letter, numeral, drawing, picture, shape, colour, logotype, label or combinations used to distinguish goods or services may be considered a trademark; even sounds and smells may be considered a trademark and protected.

A company that has not protected its trademarks will not be able to take advantage of the rights that a validly registered trademark provides.  Many companies confuse trademarks with company names and believe that by registering their business and trade names at Companies House (for the UK) this name would also be automatically protected as a trademark.

Not having protected a trademark can have terrible consequences. A specialty beer importer client of ours based in the United States found themselves in an unusually strong position when one of the largest breweries in the world (EU based) acquired one of the American’s strongest products and terminated its import/distribution agreement.  Unbeknown to us, our client had registered its supplier's trademark in the US.

The brewery announced at a press conference following the acquisition that they intended to develop a direct sales force in the US.  The importer/distributor advised the brewery that such a plan would be unwise!  Not only did the Americans have a valid distribution agreement, but they "owned" the brewery’s trademark in the U.S.!  Without the right to use the trademark in the US, neither the brewery nor any distributor could sell the beer.

The Americans suggested that the Europeans should check out their trademark rights.  It goes without saying that the brewery’s accountants and lawyers hadn’t reviewed this important issue in their due diligence.  Hasty and lucrative offers were received from the brewery.  It was obliged to indemnify the distributor - not for the termination of the contract - but rather to buy back the trademark.