Brand and trademark: where marketing meets law

• English

What is the difference between a trademark and a trade name or between a brand and a legal name? These everyday business terms are often used interchangeably, but they refer to diverse elements of a company and can lead to confusion.

Intellectual Property (IP) protections are indispensable for securing trademarks and brands, which in turn help define and maintain a business's market position. Therefore, being able to distinguish these commercial terms from their regulatory counterparts is crucial to ensuring the right legal safeguards and marketing strategies are in place.

The basics of names and trademarks

When establishing a business, one of the first things owners need to come up with is the legal name — the registered title setting the company apart from competitors. Since such names tend to be more formal than memorable, a business may present a separate trade name to customers. This is often defined by terms including "doing business as," "trading as" or "operating as" in official documentation. Many countries require applicants to file legal and trade names separately.

The next concept is the brand name, which may overlap with the trade name. This is generally used for promotional purposes such as distinguishing a specific product line from the competition. However, a brand is more than just a commercial flag since it serves as an inspiration and repository for consumer feeling. Promoting brand recognition thus requires a business to communicate its principles and how it delivers on them. Going to this added effort is an impactful way to resonate with a prospective audience, as 62 percent of consumers surveyed in a joint Razorfish-VICE Media study said that a brand's values are "important" or "very important" when making purchasing decisions, with 40 percent actively researching a company's practices. 

Even though it may be decisive for consumers, a brand still only exists intangibly. Its first objective is to establish the company and maximize its popularity, often using mission statements and logos. Its second goal is to represent the company's priorities and value proposition, promising to meet clients' quality expectations. The latter function is generally built up via products, services, customer support and marketing.

All assets that contribute to market success by speaking to consumers require legal protection, and this is why trademarks are essential. A trademark can be in the form of a symbol, logo, design, word, slogan or any combination of these; in some instances, even a sound, smell or taste can be registered.

Meanwhile, legal, trade and brand names can often be trademarked, subject to criteria such as distinctiveness. Although registering these as trademarks provides overlapping protection for a brand, the brand itself still cannot be trademarked because it only exists in the minds of the public. For this reason, a business owner must understand how these concepts differ, how they work together and how to utilize them effectively.

A closer look at brand vs. trademark

The word "brand" originated from animal herders searing or "branding" unique symbols onto their livestock using hot irons in order to show ownership and prove theft. From its ancient origins almost five millennia ago, the concept lent its name to a growing commercial application after the Industrial Revolution when global trade highlighted the need for product identification and differentiation. Hence, while the trademark evolved to indicate the trade origin of goods or services, the brand became the mental image cultivated around that origin. Today, a host of trademark protection possibilities exist, from a basic logo to the domain name for an official website.

With the effects of globalization and increased competition, promoting and defending a brand can be a costly undertaking in time and money. That being so, registering and maintaining trademark registrations are some of the most financially efficient actions in branding efforts.

These rights help protect investment in a brand, both locally and internationally. Though they do not need to be registered with an IP office in order to do this, the owner of a registered trademark benefits from stronger enforcement compared to the owner of an unregistered trademark, who often has difficulties proving the existence and extent of their rights.

In either case, these protections provide their owners with exclusive rights, preventing rivals from imitating or reproducing their trademarks in the same commercial space. The goal is to avoid customer confusion and reputational exploitation that may otherwise occur through the use of similar names, logos or images.

As mentioned, a trademark primarily establishes where goods originate, with a service mark accomplishing the same for services. That said, both support a variety of key purposes:

• Quality function: Promising certain positive attributes and values
• Communication function: Facilitating advertising that is recognizable and memorable
• Brand function: Weaving legal safeguards around identity, image, personality, character, culture, essence and reputation

Courts and legal experts have largely accepted these concepts for decades, with one notable example being the L'Oréal / Bellure case (2009). In ruling on this dispute, the Court of Justice of the European Union noted that a trademark's usage includes not only its role "to guarantee to consumers the origin of the goods or services, but also its other functions, in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising."

What does this mean for business owners? Simply put, a brand and the trademarks that protect it are distinct but practicably inseparable, with IP assets coming together like pieces of a puzzle to build a larger company picture. This creates an important overlap between marketing and law, enabling businesses to carve out a commercial niche by utilizing the names and signifiers they have already created.

The economic value of brand equity

The trademark basics are intuitive and approachable, but the reality is that an effective portfolio of trademark rights requires both a solid strategy and a thorough understanding of the economics behind IP.

Firstly, remember that creating IP is an investment, as is its subsequent protection. For example, the United States Intellectual Property Office charges standard fees for each class of goods or services in a trademark application (either $250 or 350 USD). Alternatively, the European Union Intellectual Property Office charges €850 for online registration and the first class of good or service, €50 for a second class and €150 for every additional class after that. Whatever the venue, other potential filing and maintenance costs may include:

• Trademark attorney fees
• Trademark renewals
• Trademark extension applications
• Statements of opposition

Fortunately, these costs are offset by the value of brand equity — the economic footprint of a well-established, well-protected brand.

Experience shows that recognized brands are a lot easier to sell than those that are hardly known. By conveying a promise of familiar quality, brand recognition simplifies the buying decision for potential customers. This increases the effectiveness of marketing campaigns, enables the company to secure margins and helps lay the groundwork for expansion into new services or product lines.

Brand equity is a part of a company's intangible assets, but it is formed and supported by measurable IP protections, which, in turn, support tangible economic benefits.

Putting the law behind your brand

The representative elements of a company's corporate image form the brand, while trademarks provide legal protection for those components. Together, they develop into something that exists in customers' minds and influences their spending habits.

How can your company leverage the IP system to build a brand? Contact one of our experienced trademark attorneys to learn more about protection, options, value and opportunities.