Exporting Your Brands: Grow the Business and Avoid Risk

For the food & drink industry there is great cachet in selling a British brand around the world. Overseas markets offer a great opportunity for a business to grow, increasing the reach of a brand to new customers and a bigger slice of the market and greater profits. However, it is important to plan ahead – so once you have identified the best export opportunities, make sure you aren’t tripped up by an IP issue. This will ensure that you can continue to invest funds to grow the business rather than dealing with a trade mark dispute, for example.

These are our four top tips to stay on track when you are exporting.

1. Select the right trade mark

There are cultural considerations to think about and also the legal issues. You want to select a name that is not offensive and that does not have negative connotations. You also want to have the opportunity to protect that brand name with a trade mark registration.

• Know your consumer. What works at home might not necessarily work elsewhere. The first place to start is how your brand name translates into other languages. There have been unfortunate mistakes in the past such as Coors’ “Turn it loose” campaign which for Spanish customers suggests having loose bowels. The French public were rather surprised to be offered Gerber baby food, which translates as “puke”. Pay particular attention to countries that don’t use the Roman alphabet, especially if you’re planning to replicate your brand in local characters by literal translation or transliteration. You don’t want your brand to have an unfortunate association with something unwanted.
• A distinctive brand name that is not descriptive carries more weight in the minds of the public. The global snack brand Lay’s bears no relation to the product so it is distinctive and therefore easier to protect as a trade mark and enforce against others – more on that below. It also serves as the “masterbrand” meaning that it is possible for Lay’s to give their customers a clear message on the nature of the various sub brands, e.g. whether they are “potato chips”, “kettle cooked”, and so on.

2. Make sure you are free to use your trade mark

Before commencing use, conduct searches to see if anyone else has earlier rights to the mark that you could be infringing and that could be used to oppose your trade mark application. In a worst case scenario, you could be faced with an injunction preventing the use of your mark, and a forced rebrand, resulting in a considerable waste of time, money and resources. Identify these risks early so that you can take mitigating action.

• One common misconception is that registering your business name with UK Companies House gives you entitlement to use that name. Also, owning a trade mark registration does not automatically give you the right to use it. A trade mark is a negative right that can be relied on to stop others from using or applying to register an identical or confusingly similar mark. It is also worth remembering that commissioning a work mean does not mean that you automatically own the copyright in the work, for example a logo, that has been created. If a third party has created a work they will own the copyright unless there is a document in place that transfers the ownership to you, for example your contract with the designer.
• Of course it might not be cost effective to search in advance of launch in all territories, and split branding is possible if necessary; for example, Burger King has to trade as Hungry Jacks in Australia. However, if searches can at least be conducted in all key territories then this will make your life much easier in the long run. Forewarned is forearmed as they say!

3. Protect your trade marks

Once you’ve established that you’re free to use your brand, here are some steps you can take to make sure you retain ownership and control:

• File trade mark applications (at least in your key markets) sooner rather than later. In many countries unregistered rights are given little, if any, weight and so – in the absence of a trade mark registration – it will be very difficult to prevent a third party using or applying to register an identical or similar name for an identical or similar product.
• Most countries operate a “first to file” system, so if someone gets there first you’ll have a headache trying to unpick it. In China, a squatter can prevent your mark from being registered – and worse still they can issue infringement proceedings against your use of your mark in China or have your goods removed from ecommerce platforms. For these reasons a distributor may not agree to sell you products unless you have a trade mark registration.
• Keep robust contracts with your business partners – this applies to manufacturers, licensees, distributors and anyone else you’re working with. Whilst relationships will start out positively they can break down over time, such as when a distribution agreement comes to an end. Make sure contracts include clauses that acknowledge you as the owner of the IP rights and prevent the other party applying to register your marks or anything similar as a trade mark, domain name, or anything else. Include clear language defining the scope of each distributor’s operation by specific territory, as well as what happens to any excess stock at the end of the agreement.

4. Check up on the competition

You have worked hard to develop strong relations with your local partners, distributors etc. Make sure they notify you of any infringements. It is in their interests and yours. If infringing products are sold in a particular market it could suggest that there is an opportunity for you to sell the genuine article.

• Make use of the more formal monitoring procedures, for example trade mark watching services which flag any similar marks that are filed, as these can often be a precursor to conflicting products actually going on sale. You can also record your registered trade marks with Customs authorities both at home and abroad, so you’re notified of any counterfeit products entering or leaving the country.

Your business plan will also continue to evolve so it is worth returning to these issues from time to time to make sure that your IP strategy reflects your activities.

If you would like to discuss any of the issues raised in this article, then please find my contact details on my web profile here or contact us at fooddrink@gje.com