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The zen of the brand-trademark balance

Peter Lemire //February 9, 2012//

The zen of the brand-trademark balance

Peter Lemire //February 9, 2012//

When talking about the advertising, marketing and sales of a business’s goods or services, business and legal texts will generally talk about brands or trademarks; or, if they do address both, they deal with them as completely separate topics. As a student of both the business and legal worlds, I think this is a mistake.

While not necessarily synonyms, brand and trademarks are definitely symbiotic creatures and one should never be considered without the other. Both terms are related in that they refer to the same things – identifiers of goods and services in the market place. One is a business term (brand) and one is legal (trademark). 

Trademark rights are the mechanism a business uses to protect the goodwill and name recognition it has developed in a brand. Marketing professionals like certain brands because of the commercial impression they project, how they resonate with consumers, and may other factors. Attorneys like certain trademarks because of their strength, breadth, and protectability. The successful business attempts to achieve the Zen-like state of balance between the two.

Oftentimes, a fledgling business utilizes a common marketing strategy of adopting a brand that describes what the goods or services are. The rationale is that the company can skimp on marketing because the brand makes it obvious to the consumer what the product or service is used for or does. While this may be true, it is a very short-sighted approach. As the company expands its sales, the brand may gain value due to the goodwill and name recognition it has with consumers. As this happens, competitors or newcomers to the market might attempt to ride on the coattails of the company’s success by selling products or services with a similar name. This is when the law of trademarks kicks in and decisions that were made years ago will now determine whether the company can protect its brand from the wolves.

There are two examples from Colorado that provide a great illustration of what can happen when a company chooses a brand that is vulnerable under the law. The first involves the iconic ski resort Vail. The case, which went to the 10th Circuit court of appeals involved Vail Associates, Inc.’s attempt to prevent a third party’s use of 1-800 SKI VAIL to advertise its vacation booking services. 

Ultimately, the courts ruled against Vail Associates and found no infringement. There are a multitude of factors in the case, but the most telling is the stinging assessment of the strength of the Vail trademark. The court noted that Vail was geographically descriptive since Vail Pass and the town of Vail were both established before the ski area started operations. The court chastised Vail Associates for the choice of brands stating, ”If some confusion exists, such is the risk VA [Vail Associates] accepted when it decided to identify its services with a single word that is geographically descriptive.”

The second example involves the University of Denver’s heartburn over Metro State’s decision to change its name. The story made its way to an editorial in The Denver Post, and most recently, a letter from the Chancellor of DU, Robert D. Coombeto. In his letter the chancellor attempted to separate the issues of brand confusion and trademarks. He only mentioned trademarks once in passing and focused more on “brand confusion.”

This signals (in my humble opinion) that DU Cannot protect itself under the law. The sole purpose of trademark law is to prevent brand confusion and protect goodwill. DU’s mark is merely descriptive of its services and location. While it may be protectable as a trademark because it has acquired secondary meaning, the mark is weak – just like Vail. 

Because the mark is weak, its protection is very narrow and the name proposed by Metro State last year probably would not be considered infringing under the law (Denver State University). Without any legal remedy to prevent the brand confusion, DU’s only option is to attempt to affect Metro’s decision through public pressure; hence, the letter to alumni.

The time surrounding the launch of a product or service is hectic and oftentimes filled with chaos. When going through its branding process, if a company does not step back and take a look at how protectable the brand is under the law it could have dire consequences in the future when the company is unable to protect itself from the wolves. That is not to say that the legal aspect should control the process, however the sophisticated company attempts to strike a balance between the marketability of a brand and the protectability of the brand. If not, the company could end up with a highly marketable brand that it cannot protect from the wolves who wish to steal its value.