AJPark

One of the key differences between FMCG brands and other types of brands is the large number of FMCG brands already in the market. FMCG brand portfolios are ever changing, so it can be difficult to keep up, and sometimes hard to find a single brand you can use yourself, all over the world.

Creating a brand

Many New Zealand businesses will already have an established local brand portfolio. For these businesses, there is less need to focus on strategic brand creation. However, if their brands are not available to use overseas, they may have to come up with something new.

Brands fall somewhere between two extremes. On one side there are purely descriptive or generic names. On the other side are meaningless or invented brands. Descriptive brands are easier to create and less risky to use, but it is difficult to protect or stop others from using them. Invented brand names are legally superior and easier to own.

Ideally, if you are going to create a brand then you want to make sure you can stop your competitors from adopting the same, or a similar, brand.

Making sure your brand is available for use

You should always search your brand to see if you can use it without infringing someone else’s rights.

Under New Zealand law, branded products exported from New Zealand are considered capable of infringing a trade mark registered in New Zealand. So even if you do not retail any products locally, you could still infringe another business’s New Zealand trade mark rights. You will, therefore, usually start with a New Zealand trade mark search and, if available, then move outwards, starting with your most important export markets and moving finally to your least important ones.

You may encounter problems at any stage during the search, either in New Zealand or in one, or more, of your export markets. You will have to make pragmatic and strategic decisions about whether problems are so big you have to completely change your brand, or if you can find another way around the problem. This will often depend on the nature of the products you sell, the structure of your international supply chain, and whether you have the cash or other leverage to deal with any existing third party brand rights.

FMCG businesses will often have to accept they will not be able to use the same brand in all of the countries they operate in. Make sure that you get solid strategic advice to help you find a brand you can use in as many places as possible.

Language problems

Do not assume your brand will have the same meaning in other countries.

Even if you can legally use a brand, there is little point in doing so if your brand is simply going to offend or confuse your customers. Many brand owners have been caught out using brands that are offensive or confusing when translated into other languages. For example, Pepsi's ‘Come Alive With the Pepsi Generation’ translated into ‘Pepsi Brings Your Ancestors Back From the Grave’ in Chinese.

While this is an extreme example, it is surprising how often these kinds of situations do happen. Your local distributor or licensee, or your IP lawyer, should be able to have potential brands vetted for unexpected meanings in other languages.

Protecting your brand

Once you have found a non-offensive mark you think you can use, you should try to register it to get the strongest possible protection.

Unlike other types of IP (such as copyright), registering your brand is done on a country by country basis. There are some exceptions, such as a European Community trade mark registration which currently covers 27 countries, and will cover more in the future. Taking your brand overseas can be expensive, so get professional advice about ways to keep costs down. Part of the role of your local IP counsel is to manage those overseas costs for you.

Commercialising your IP rights

There are different ways to make money from your brands.

The most obvious way is to make and sell the products yourself. However, more and more export businesses are licensing use of the brand to overseas companies in exchange for a royalty payment.

An advantage of licensing the brand is that it often simplifies the supply chain. It can also put the operation of the business in the hands of someone with local market knowledge, giving them ‘buy in’ and an incentive to operate the business efficiently.

However, it also means giving up some degree of control over how the brand is used. And if someone else damages the brand’s reputation by providing substandard products, this will devalue the brand.

Your lawyer will be able to discuss commercialisation options with you.  That way you’re sure to find the solution that best meets your business’s needs.

An edited version of this article was published in FMCG, December 2009.

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  Jonathan Aumonier-Ward

  Senior Associate