Background Papers

What's in a Brand Name?

By: James Date: April 14, 2014

1. What is a brand?

A brand serves to identify and distinguish the products or services of a person from those of his or her competitors. A brand is essentially shorthand for a set of perceived qualities. It may be a logo or a work or even, for instance, a piece of music.

"A brand is no longer a synonym for something that comes in a package, tin or bottle. Every product, every service, every cause that has a competitor is a brand that needs to define and defend its uniqueness." - Barry Day (Advertising Guru)

2. The value of brands

A brand is a piece of property which can be very valuable and may be bought and sold, either as part of a business or independently. A brand's value is determined by the qualities it communicates, which may include any or all of the following:

  • Uniqueness
  • Authority
  • Values
  • Expertise
  • Attributes
  • Rational and emotive benefits

The importance of branding can be seen as the world becomes a seemingly smaller and more competitive marketplace. Case law has illustrated that the modern business disadvantages itself where it does not distinguish itself by branding its goods and/or services.

3. Brand creation

Understanding the nature of a brand

The development of a brand which conveys the right message about your product or service is vital for marketing purposes - your brand should not contain inherent messages which conflict with the intended positioning of your product or services.

It is equally important in the brand creation process to consider the extent to which a new brand is able to be protected in a legal sense.

A brand is an adjective. It is not a noun. A brand which functions as a noun is not a brand, but a generic for the product or service (eg. sellotape, aspirin). Do not choose a generic name as the brand name for your product or service.

Protectable brand names

It is important to choose brand names carefully. Brands should be distinctive in order that the public will immediately associate the brand with your business and products or services. Where your brand is not distinctive, it will be difficult to promote and difficult to protect. For these reasons, you should avoid:

  • Generic names;
  • Geographic names;
  • Surnames;
  • Descriptive names; and
  • Laudatory terms (eg ‘super').

Examples of good brand names include :

  • Company or individual's names represented in a special manner;
  • Invented words (eg. Kodak); and
  • Signatures.

In addition, brands must not be:

  • Deceptive or misleading (such that they may be contrary to the Fair Trading Act 1986); or
  • Scandalous or immoral (such as to offend the public).

Once you have chosen your brand, it is important that:

  • It is incorporated in whatever you do. Consider the use of ‘straplines' and other marketing instruments, such as visuals or music, used in combination with a brand name itself to strengthen brand identity.
  • It is legally protected.

4. Brand protection

Check out the rights of others

Before committing yourself to any new brand, you should always check to ensure that you do not infringe the rights of others.

  • Check the market place for competitive products with confusingly similar brands.
  • Have a trade mark search done in the Intellectual Property Office of New Zealand ("IPONZ") and in any other countries in which you wish to market your products and services. We can assist with ‘on-line' trade mark searches.

Trade Mark Registration

From a legal perspective there is a difference between a brand name and a trade name. What is key is registration.

A brand often consists of multiple images and words meshed together to create a specific consumer image. An example is "Coke " where the shape of the bottle, the lettering, the product name, the strap lines and consumer image - fun, beach, parties - are all consistently delivered to create the brand "Coke".

A trade mark on the other hand is a very specific thing. It can be a graphical device or letters and if registered is given special protection at law.

The only way an unused brand can be protected is by registering it under the Trade Marks Act 2002. Once you have registered your brand as a trade mark you then have the exclusive right to use that trade mark throughout New Zealand in relation to the specified goods or services.

The advantages of trade mark registration under the Trade Marks Act 2002 are :

  • Monopoly use of the trade mark - ie. Your registration can be used to prevent any competitor from using the same or a similar trade mark in New Zealand on the same or similar goods or services.
  • It can prevent registration of an identical or confusingly similar mark in respect of the same goods or services.
  • It serves as public notification of your rights in that trade mark.
  • It is the cheapest means of protecting your trade mark (and registration can be maintained forever).
  • A trade mark registration is a tangible asset.

It is important to note that incorporating a company under a particular name is not effective in preventing others from selling goods or providing services under a similar name. A company name serves only to identify a legal entity, and does not confer a proprietary right in that name. Only a trade mark registration creates a legal right which may be relied upon to prevent another party using a name similar to that registered as a trade mark.

Trade Mark Use

Use of your brand in the market place will also give you rights to stop others ‘infringing' your brand. Always:

  • Use your brand as a brand - including using appropriate generics with your brand (eg. ‘Nugget' shoe polish).
  • Identify your brand as a trade mark:
    • Where your brand is registered as a trade mark, use the symbol Ò.
    • Where your brand is not registered, use the symbol Ô.
  • Include a legend on your product, identifying the brand owner.

Registered Designs

Registered design protection is available under the Designs Act 1953 for a wide range of products. Protection may be obtained for novel features of shape, configuration, pattern or ornament applied to an article by an industrial process.

Where your brand can be represented in such a three dimensional form, you should consider registering the brand under the Designs Act 1953. An example of this is the registered ‘Coca Cola' bottle design.

Registration of Domain Names

Internet domain names have immense potential value as the Internet becomes a fundamental part of the world economy. There is huge value in obtaining domain names which are identical to your brand names in order to be able to promote those brands on the Internet.

InternetNZ has responsibility within New Zealand for the .nz domain name space, and has implemented a shared registry system for the management of .nz domain name registrations and the operation of the domain name space.

The shared registry system establishes a single register for registering domain names and associated technical and administrative information. .nz Registry Services operates the register.

InternetNZ has an operational office known as the Office of the Domain Name Commissioner (DNC), which overseas the management of the .nz domain name space. The DNC authorises .nz registrars. Under the .nz shared registry system, authorised registrars can register and manage .nz domain names directly with the registry

Every domain name on the .nz register has to be unique. Domain name requests are dealt with on a first come first serve basis. As more and more businesses and individuals are registering domain names, it will become harder to find one that hasn't been taken. It may be useful registering your domain name in order to secure it for future use.

Registering a domain name

(i) Decide on a name and which second level domain name is most appropriate to your operation (i.e. .org.nz, .net.nz)

(ii) Check the availability of the name. http://www.dnc.org.nz/ allows you to do a ‘domain search'. Type your desired name and select the second level domain you want from the drop own box. This search will tell you whether or not the name is available.

(iii) Register your domain name with a .nz registrar. A list of authorised registrars is available from http://www.dnc.org.nz/.

When you register a domain name, you don't own it, you simply register the right to use it for a period of time. Therefore, when the period expires, you must renew the registration.

We recommend that, in order to protect your key trade mark/trade name, you:

  • Strategically register domain names incorporating your brand with the registration agency in the country of server origin most appropriate for your customer base (eg. A .nz registrar for New Zealand ‘.nz' URLs if you are not an exporter, Internic for USA ‘.com' or ‘.net' URLs if you are an exporter, or both). You must be careful to ensure that your domain name does not include any registered trade marks of others in the country of server origin. You need to also consider a mirroring strategy if you are expecting high ongoing traffic.
  • Take the further step, if you have not done so, of registering your trade mark/trade name as a trade mark in respect of Internet services in relevant countries.

.nz domain name disputes

The Dispute Resolution Service administered by the Domain Name Commissioner, has been set up to provide an alternative to the courts where disputes over domain names arise. The Dispute Resolution Service is for anyone who wishes to make a complaint about the registration of a .nz domain name that they view as being unfair.

5. Brand Maintenance

A brand represents a set of perceived qualities. If these qualities are varied between one product and the next, your customers will receive confused messages as to what your brand stands for.

Your products should be of consistent quality. Any adjustment of quality should be done strategically and over a sufficient length of time for your customer base to adjust its perception of your product.

In addition to always using your brand as a trade mark in the marketplace, you must not allow others to use your brand or a confusingly similar brand, thereby ‘infringing' your trade mark.

Preventing Infringement

While an initial check of the marketplace may show that there are no competitive products or services being marketed with confusingly similar brands, it is vital that you keep an eye on the market to ensure that this remains the case.

Where you allow others to use your brand, or a confusingly similar brand, you are allowing:

  • Someone else to take advantage of the goodwill established in your brand; and
  • Your customers to identify your product by means other than your brand;

thus diminishing the value of your brand.

Taking action to stop infringement

The following are some of the causes of action available to the owner of a brand in cases where others try to steal or ‘free ride' on your brand:

Infringement of a trade mark

Where your brand is a registered trade mark, you, as the proprietor of that trade mark, have rights under the Trade Marks Act 1953 against anyone who uses your brand or a confusingly similar brand on the same or similar goods or services to those with which your brand is associated. The penalties for infringement of a registered trade mark are substantial and may include damages based on an account of profits by the infringer, litigation costs and surrender of all material carrying the infringing trade mark.

In some circumstances, an unregistered trade mark can be protected by infringement procedures also, provided that the trade mark is very well known.

Fair Trading Act 1986

Section 9 of the Fair Trading Act 1986 states that:

"No person shall, in trade, engage in conduct that is misleading or deceptive,
or is likely to mislead or deceive..."

Where a competitor uses your trade mark (whether it is registered under the Trade Marks Act 1953 or not) or a similar mark on its own product in a way that is likely to mislead customers into thinking that the competitor's product is yours, such use in trade is misleading and gives you a right of action under this section of the Fair Trading Act 1986.

Passing Off

In addition to the statutory rights referred to above, the common law tort of ‘passing off' gives you a further right of action where another person is presenting their product for sale in such a way that it is likely to be passed off as your product.

Copyright infringement

Where your brand includes material which can be described as an artistic work it will enjoy copyright protection under the Copyright Act 1994. A competitor's reproduction of that artistic work will infringe that copyright.

Defamation

You may, in addition, have a cause of action in defamation against a competitor who uses a brand which denigrates you or your product.

6. Conclusion

  • Choose a brand that you can claim as yours.
  • Do not choose a brand that can legitimately be used by your competitors.
  • Once you have chosen your brand, check to see that its use does not infringe another's trade mark registration or other rights.
  • If the brand is clear to use, apply to register it as a trade mark (and register relevant domain names).
  • USE AND IDENTIFY THE BRAND AS A TRADE MARK.
  • Prevent competitors from using your brand (or a confusingly similar one).

Disclaimer

This Background Paper by its nature cannot be comprehensive and cannot be relied on by clients as advice.

This Background Paper is provided to assist clients to identify legal issues on which they should seek legal advice.

Please consult the professional staff of Clendons for advice specific to your situation.

James Carnie
Principal
Clendons
PO Box 1305
Auckland
New Zealand
Phone: +64 9 306 8000
DDI: +64 9 306 8002
Fax: +64 9 306 8009
Email: james.carnie@clendons.co.nz