Brand threat has household names gathering their lawyers

By IRENE CHAPPLE

Companies whose products are household names are taking legal advice on how to protect the value of their trademarks.

Their actions follow last week's report on the Trade Marks Bill by a select committee, which left intact a clause allowing trademarks to be revoked if they become a common name in public use.

Makers of Sellotape, Jandals and Rollerblades are asking their lawyers to assess the risks posed to their brand values created by their successful marketing.

KPMG Legal partner and patent attorney Penny Catley says that owners of well-known brands will need to spend time and energy defending and educating the public about the correct use of trademarks.

"One of the most basic principles of marketing is to encourage consumers to buy and use your branded product or service, first and foremost."

She says if the bill is enacted marketing teams handling well-known marks will have to start thinking about how to protect their marks from acquiring cult status and becoming vulnerable to removal.

Problems could be avoided through national advertising by companies telling consumers not to use their trademarked brand names generically.

But she says there are problems with that tactic: "Will the fact that you have a particularly unintelligent bunch of purchasers who have not paid heed to your numerous warnings on incorrect and inappropriate use of your brand prejudice your rights to continued protection of a brand you have spent years investing in and developing?"

Sellotape has become synonymous with cellulose - the clear, sticky tape, says New Zealand marketing manager Keath Seto. The company spends up to 20 per cent of its annual turnover of around $35 million a year on marketing.

"[The bill] is alarming. The company has spent millions to build the brand.

"If it becomes generic and someone else uses it, that is unfair exploitation of the original brand. The equity would be greatly eroded."

Seto says confusion has resulted from the similarity in names of cellulose and Sellotape, which was trademarked in the 1950s.

The company is also called Sellotape Products, and uses the name for other tapes.

"We don't know what the full implications are. We need further discussions with our legal people."

Jason Grace, brand manager for New Zealand Rollerblade distributor Jones Brothers, is also seeking legal advice.

The in-line skating market is worth more than $2.5 million a year.

About six companies supply in-line skates, with Rollerblade the leading brand, says Grace.

"We have always tried to protect our brand. Rollerblade has built the heritage awareness of in-line skates around the world."

The in-line skating market is driven by promotion and advertising is vital, he says.

"Our concern would be do we continue to spend considerable amounts of dollars on the Rollerblading brand. If we don't do it, the numbers [of in-line skaters] could drop.

"But on the other side, if we do ensure continued awareness there is a danger our brand could be ripped off by other parties."

Jandal maker Sandford Industries has already asked retail chain stores to "please cease calling imported products 'jandals'."

Director Baron Sandford believes the issue is protection for the public, who may be confused about the quality of the product.

Grace agrees: "I see huge problems under the Consumer Guarantees Act. If there are genuine and non-genuine products on the market, one will have a guarantee and back-up service while the others will offer nothing. That's where the whole thing will fall over."