What is a brand? The risks of counterfeiting and what's at stake
A company’s brand can often be its most powerful and valuable asset, and a solid brand identity can positively influence consumer choice by making products or services more attractive, enabling brand owners to increase revenue.
Simply put, a brand gives consumers a reason to choose a company's products or services, helping attract and keep customers while creating a lasting barrier for competitors.
The downside to a lucrative brand is that it inevitably attracts copycats who will want to take advantage of the brand’s identity, positioning and success. When third parties copy a brand or counterfeit its products, they negatively impact its quality and exclusivity, take advantage of significant investment and ultimately cause loss of revenue, damage to reputation and erosion of consumer trust.
To put the value of this issue in context - and leaving aside damage to society caused by the known links between counterfeit activity and organised crime and the risk to public health and safety of counterfeit products - the value of the global trade in counterfeit goods has been estimated at over a staggering $464 billion. Equal to the GDP of Austria or Belgium - or 2.5% of total world trade. The wider overall economic impact of counterfeiting worldwide is significant. The Brandenburg Institute has estimated that it deprives the world economy of $1.96tn per year (3% of global GDP).
Against this backdrop, we have developed this practical guide to help brand owners protect their investment at every stage of a brand’s life cycle. It focuses on using intellectual property (IP) rights to safeguard a brand and its products and services, as well as taking effective action against copying and counterfeiting.
We will share best practices for supporting the following stages of a brand's life cycle:
Brand creation/research
Selecting a distinctive brand name and design that stands out in the marketplace helps determine a brand’s success and its ability to remain exclusive over time - as well as allowing it to grow and expand. We will share best practices for selecting a brand and recommend legal steps to complement market research during brand creation.
Bringing a brand to market through promotion and advertising and protecting brand assets
Once created and launched, brand owners will want to promote, advertise and market their brand, leaving it more vulnerable to being copied. Before launch it is important to put IP protection in place for the different embodiments of a brand and its design. We will discuss the different forms of IP protection available and how to implement and time them to align with the commercial strategy for exploitation of the brand.
Diversification and licensing
As a brand matures and develops, an owner is well positioned to leverage the brand’s established equity or flexibility to expand its product range or geographical reach. Brand owners can also access new markets by engaging with third parties to produce products or offer services under licence. Moving to new territories and expanding product ranges can lead to increased likelihood of counterfeiting. We will discuss ways in which brand owners can take pre-emptive steps to allow them to take these expansion steps successfully, by putting the right scope of protection in place to cover key product expansion categories and geographies.
Defending a brand’s market position
Once established, a brand may be particularly attractive to copycats and counterfeiters, therefore it is essential to take steps to safeguard the brand’s exclusivity and reputation. We will discuss tactics brand owners can use to combat counterfeiting and maintain brand exclusivity, considering new developments in marketing technologies.
Just as each stage of a brand’s life cycle builds on the previous one, success at each stage drives the brand's continued growth. Following best practice at each stage from a brand protection perspective will support its progression to future success.
In particular, understanding the prospect for expansion and potential diversification of a brand at the brand creation stage will optimise a strategy for IP protection to help overcome future obstacles. This will then help make it easier to protect, diversify, licence and enforce the brand.
The most important form of IP protection of a brand is the trade mark. Relating to its brand-name or logo, trade marks are the only form of registered IP protection with an indefinite lifespan.
When executed successfully, an effective brand protection strategy can act as a future-proof barrier to entry, preventing third parties from using similar brands for the entire life of the brand.
