Brand Protection is a news article published in the Smart Business magazine of April 2011. Luis Alcalde is a business legal expert practicing with Kegler, Brown, Hill, & Ritter. It the article, Alcalde talks about issues concerning protecting a brand in the global marketplace. In the global economy, an organization’s name and image are more influential than before (Alcalde, 2011). This article is written in four parts. The first part talks about the obligation of an organization to protect its brand against counterfeit products.
A brand owner must be proactive monitoring its product in the market. Secondly, Alcalde describes the significance of brand protection citing loss of brand name, reduction in sales, and, liability as the reasons why organizations must police their brands in market locations. Alcalde also highlights cases where a company may be liable to consequences (deaths, injuries, etc) of counterfeit products and procedures necessary in such situations. The process taken to protect a brand is also discussed in detail. Finally, Alcalde describes brand protection in global business environments.
The author provides comprehensive coverage of an organization’s obligation to protect its brand or trademark against unwarranted use. Alcalde advises that knowingly failing to take action against an emerging brand with a similar name has serious implications. In fact, it may amount to a waiver of your legal rights (Alcalde, 2011). Trademarks are subject to renewal.
In this regard, failing to take action against infringements of an organization’s trademark may create problems when trying to renew the trademark. This has serious implication for business success of an organization. The reason why organizations develop trademarks is to create an association between customers and products or services (Post & Post, 2008). An excellent example of a global business is McDonalds. Whenever a customer walks into McDonalds they have particular perceived expectations. These expectations have been created in the minds customers through the brand over time. Associations between customers and products take a long time to create.
It takes irrecoverable amount of money, effort, and time to ensure that a company’s product lives up to customers’ expectations. Companies work hard to expand their customer base by creating a positive association between customers and the company’s brand (Johnson, 2012). Therefore, organizations should watch out for individuals and organizations with potential to misuse one’s organization’s trademark on products of inferior quality. Regular policing is required to identify and challenge any organization that is introducing an identical brand to the international market.
Consequences of failure of brand policing are also well articulated. In case the brand owner is not vigilant, infringers may put a hard-earned brand name or trademark on counterfeit products without incurring the cost, effort and time that an organization has put into selling its brand to the customers. According to Alcalde, this is theft of intellectual property.
In addition to the loss of intellectual property, an organization loses sells. The degree of loss varies in relation to the quality of the counterfeit product. In most markets where counterfeit products are sold consumers are aware that they are purchasing a counterfeit product. A brand owner who is aware of this situation may not be motivated to challenge those responsible for the counterfeit products. Despite, the lack of significant negative impact on sales, the counterfeit product gets free advertisement from the original owner of the brand.
Alcalde writes that the original owner of the brand must conduct policing of its market so that such practice is not considered a waiver of trademark rights in the future. In addition, it is recommended that more focus be placed on bigger imitators such as those that are selling a much better quality product. This is necessary to avoid loss of real customers to unworthy sellers. For instance, if a company’s product is worth $2000 in price and a counterfeit product is selling at $ 1000, this poses a risk to the company. Someone willing to spend 1000 on counterfeit product is a potential consumer or customer.
Excellent examples of cases where a company may incur liability are given. Counterfeiting products such as pharmaceuticals and automobile parts may result in deaths and injuries (Alcalde, 2011). In addition to the loss of sales and trademark, there is the possibility that counterfeits of those kinds of products may kill. This creates the potential for a law suit against the company responsible for the brand name. In such cases, the company must investigate and determine if the product involved is the true or original product. In that case, companies should embrace technologies such as holograms, smart tags, molecular marking, and some other technological tools for tracking counterfeit products and identifying original products. However, the article does not provide an insight to cases of malicious brand damage that may be caused by a company dealing in substitutes to a product. A competing company may negatively use a company’s brand for to propagate malice and dent the image of a company (Johnson, 2012).
Alcalde offers steps that a business entity can take to protect its brand from being counterfeited. First, the trademark is updated and filed in jurisdiction in which the organization is conducting business. The second stage of protection is to police places where there is a likelihood of infringement or places where the company’s customers are making purchases. According to Alcalde, this may involve hiring the services of law firms and private investigators to explore the market and identify infringers. Such institutions have programs in place for busting and prosecuting such criminals. The internet is another epic location that requires policing. Police the leading vendors in the internet. Significant drop in sales may point to the presence of counterfeit products in the market (Post & Post, 2008). The bottom line is the identification and prosecution of any infringement of the trademark rights.
In relation to international level of brand protection, Alcalde advises that same business procedures apply globally. This means that when a trademark is filed in jurisdiction, in the US, it does not mean that it s protected in other locations. There is no international legislation that provides for a central trademark (Alcalde, 2011). However, countries that are members of the Madrid Protocol are allowed to file a single application in English. It is essential to realize that several international market locations are not party to the Madrid Protocol. Therefore, business institutions must file a trademark application in all countries in which they operate in.
Luis Alcalde’s article is comprehensive and sufficient in details. Brand protection is discussed in general. A step by step analysis is then given for the various aspects involved in brand security including consequences, steps in brand protection, and issues relating to the global market. However, the author avoided mentioning possible legal actions against infringers of trademark rights. Infringement of trademarks by agents internal to the organization is also not discussed in the article. In some cases, people affiliated with an institution may participate in activities that undermine the brand in the market (Post & Post, 2008).
Alcade, L. (2011). “Brand protection: how to protect your brand in the international
Marketplace”. Smart Business Columbus, April 2011
Johnson, P. (2012). “Ambush marketing and brand protection”. New York, NY: Oxford
Post, R. & Post, P. (2008). “Global brand identity management”. New York, NY: McGraw-Hill