Brand afterlives
The birth of a new brand is usually accompanied by hopes and dreams of a long and successful market life.
But as many brand owners have discovered, the quest for the holy grail of eternal consumer appeal is fraught with unexpected turns that can trigger the demise of even the most powerful trade names.
The reality is that brands frequently die. A host of unpredictable factors, including commercial realities, shifting consumer sentiment, cultural sensitivities, and ill-gained notoriety can all prove fatal.
The past decade has seen the passing of many brands, including Coca-Cola’s TAB diet soft drink, American online media company Gawker, and iconic UK high street retail chain Woolworths.
“A brand may have completely lost its commercial and market presence as a result of the product being phased out from manufacturing and distribution.” - Raka Roy, Galadari Advocates & Legal Consultants
Elsewhere, the clamour for greater cultural sensitivity in the wake of the murder of George Floyd in the US and the global Black Lives Matter protests have since led several major brands to relinquish names associated with racial stereotyping.
Among them, in 2021, Mars rebranded its Uncle Ben’s rice as Ben’s Original, and the Quaker Oats Company, owned by PepsiCo, retired its Aunt Jemima brand, which featured a Black woman originally dressed as a minstrel character as the face of its pancake and syrup products.
And Saputo Dairy Australia, part of Saputo, renamed its cheddar cheese from Coon Cheese to Cheer Cheese, after decades of criticism.
But what happens to these assets after they shuffle off their mortal coil? The work of brand protection must continue, and counsel must take steps to ensure that the spectre of denounced IP does not return to haunt them. For trademarks and copyrights, there can be life after death.
No time to die
In the view of Ravi Ravindran, managing partner of Ravindran Associates in Singapore, many brand owners fail to consider how the valuable brand of an ailing business can be revitalised.
“There’s money to be made in death. While trademark professionals don’t like to talk about the mortality of a brand, they should have a long hard look at these marks. There are ways to continuously monetise them,” he says.
The key for both the brand owner and a potential acquiring party is to identify those brands that can have a successful afterlife. If the company does not want to use a trademark any longer, there are creative opportunities to commercialise it, including selling or licensing the brand.
While a true brand rebirth is rare, it is possible to revitalize a once-stagnant brand. As Raka Roy, head of IP and Data Protection at Galadari Advocates & Legal Consultants in United Arab Emirates, notes: “A brand may have completely lost its commercial and market presence as a result of the product being phased out from manufacturing and distribution. But such brands still hold a recall value in the mind of consumers. Based on the level of this recalling power, a dead brand can be resurrected.”
“While trademark professionals don’t like to talk about the mortality of a brand, they should have a long hard look at these marks.” - Ravi Ravindran, Ravindran Associates
Take Polaroid, for example. In 2008, the company behind instant low-resolution photographs filed for bankruptcy and ceased production of its films and cameras in the face of the overwhelming competition posed by digital cameras. But when The Impossible Project bought the brand in 2017, it successfully revived it by tapping into a nostalgic trend for retro mechanical cameras.
Elsewhere, children’s toy manufacturer Toys “R” Us, which filed for bankruptcy in 2008, is a comeback kid. It was given another lease on life when its new owner, WHP Global, licensed the brand to retailer Macy’s in 2021.
In another example, Sega was facing bankruptcy and potential death after being eclipsed by Nintendo in the gaming market in the 80s and 90s. But in 1999, Isao Okawa, the then-president of Sega, announced that the company would be shifting its focus from hardware to software.
After initial turbulence, the company revived in a new guise and has gone on to dominate network-enabled trading card games and satellite game machines, as well as arcade games.
But as Roy observes, there must be an attractive proposition attached to a dead brand before any revival is attempted.
“It is important to analyse exactly how much damage has been done and what’s the level of recall value the market still has toward it,” she says.
In some scenarios, reviving a dead brand can be a logical route for a company to take, according to Brett Kensett-Smith, a senior manager at EverEdge Global, which evaluates companies' intangible assets.
“Companies with dormant brands should ensure that they protect the IP rights related to those brands.” - Henrike Strobl, Nordemann
Offering an example, he notes that the Ampol petroleum brand, formerly known as Caltex Australia, succeeded in breathing life back into a dead brand.
Ampol operated petroleum service stations in Australia between 1936 and 1995. When it merged with another petroleum company, Caltex, it was rebranded to Caltex in all major urban centres. However, a few Ampol stations remained in small country towns throughout Australia, retaining a degree of brand recognition with consumers.
Chevron had 50% ownership in Caltex Australia, and when it sold its stake in 2015, it licensed the brand to Caltex Australia. But four years later, Chevron gave notice to Caltex Australia to terminate the Caltex trademark license agreement. Subsequently, Caltex Australia revived the ‘Ampol’ trademark and in 2020 began rebranding all local Caltex stations as Ampol.
“Interestingly, it is estimated that Caltex Australia (now trading as Ampol) is now saving around $20 million per year in licensing fees,” explains Kensett-Smith.
Eternal muse
In another example, few brands evoke the luxury and 60s-era glamour of international travel than US airline Pan Am, meaning that its brand recognition has endured long after it stopped functioning as an airline in 1991.
Currently, Pan American World Airways’ Licensing Program holds the rights to Pan Am’s word and logo trademarks, and it works with partners to create newly minted Pan Am products.
“Pan Am was so famous and so iconic for so long—and lives on in popular culture—that the equity of that brand will probably never go fully to zero,” suggests Paul Earle, principal of branding firm Earle & Company and an adjunct lecturer of Entrepreneurship and Innovation at Kellogg School of Management.
“From a brand perspective, it is as strong as it gets: great name, great visual identity, mostly rich emotive experiences in flight and beyond. In the case of Pan Am, the assets are so strong that they still outweigh the liabilities, hence it retains brand equity,” he says.
To resurrect a brand successfully, owners and any aspiring revivalists or licensees need to apply sound judgment. Brands that have acquired a toxic image—or are completely obsolete—should be completely abandoned, according to Henrike Strobl, attorney-at-law at Nordemann in Germany.
“In cases where the brand clearly reflects a negative image, which may happen due to changing cultural sensitivities, the trademark should not be used. This extends not only to licensees but also third parties with whom there is no licensing relationship, since this could be connected to the [former] trademark owner,” she says.
Zombie attack
For some brands, there are fates worse than death. If insufficient attention is paid to a valuable brand in its final throes, a third party will be well placed to cite the mark as abandoned or defunct and will seize it as a “zombie brand” at little cost.
In most jurisdictions, such parasitical parties can garner success if they present prima facie evidence that a mark has been “abandoned” due to years of non-consecutive use.
There is a key difference between zombie brands and those deemed dormant. According to Annie Allison, an associate at Haynes and Boone, “A dormant brand could be considered a brand or trademark that is not currently being used, but where the owner has plans for use and the mark has been used recently enough to not be at risk of being deemed abandoned. Dormant brands are those that are at risk of being zombified.”
Brands are even more at risk if they evoke pleasant associations or tap into a marketplace for retro or vintage products, she added.
“You can keep trademark rights forever as long as the mark is in bona fide use.” - Paul Earle, Earle & Company
Anne Gilson LaLonde, author of Gilson on Trademarks, explains these abandoned or zombified trademarks “are adopted by a new owner specifically to capitalise on consumer recognition of—and loyalty to—the discontinued mark. The new owner usually copies the abandoned mark to benefit from its nostalgic appeal.”
In her view, zombie brands typically lack quality standards or even assistance from the prior mark owner.
“Nothing in trademark law requires the zombie mark owner to imitate the original quality or ingredients or to reveal that it has no connection to the original mark owner,” she says.
So how can companies and their brand guardians best rescue and safeguard brands in limbo and ward off any zombie attacks?
According to Strobl, it is crucial for companies to keep a dormant brand’s IP rights alive for as long as possible to avoid others latching on to the brand. In other words, routinely renewing the respective trademarks should be top of mind.
If brands risk cancellation actions because they cannot meet use requirements, they may be able to reapply for the original trademarks and benefit from grace periods with non-use requirements in some jurisdictions, she notes.
Ultimately, mere “token” use of the trademark—the limited or sporadic use solely to maintain rights in the mark—is unlikely to withstand an abandonment assertion, says Finnegan partner Mark Sommers.
“In such cases, companies may not be successful in preventing unrelated third parties from ‘resurrecting’ their marks that have lain dormant for too long,” he cautions.
Use it, don’t lose It
Such cases underscore why guardians of ailing brands should adopt the mantra of “use it or lose it,” according to Earle.
“You can keep trademark rights forever as long as the mark is in bona fide use. The key is to define bona fide, and this is ultimately a qualitative judgment,” he says.
Earle cites the successful example of American Airlines, which operates a programme to retain rights to airline names that it has acquired. The airline acquired Trans World Airlines (TWA), US Airways, Allegheny Airlines, Eastern Airlines, and several others.
These trademarks occasionally appear in the livery of American Airlines planes, he explains, and “in so doing, keep the trademarks alive and out of anyone else’s hands.”
And although TWA stopped flying more than a decade ago, the TTAB found in 2015 that American Airlines’ use of the marks on model aeroplanes was sufficient to prevent a nonprofit from registering the TWA mark for air transportation services.
According to LaLonde, the marks were found to be identical, and American Airlines was able to show that it sold model aeroplanes on the same websites used to book consumer plane tickets.
This strategy of use doesn’t have to be expensive, insists Kensett-Smith.
“Use can mean selling a small run of product once every three years, depending on the country, to meet registration requirements. It can also help keep a company’s offering fresh, with ‘limited time only’ campaigns, or can add a nostalgia angle to a company’s marketing,” he says.
Some brands use this limited-edition strategy as both a defence and an effective marketing tool for their underutilised brands. For example, PepsiCo and The Coca-Cola Company may have moved away from the large-scale production of their Crystal Pepsi and Surge soft drink brands, respectively, but they continue to use them on a limited scale for fans.
And while The Coca-Cola Company has so far resisted the efforts of fervent TAB drink fans to unveil a special edition of the beverage, US Patent and Trademark Office (USPTO) records show that the company in 2021 received trademark registration to use the TAB brand on clothing—giving it continued ownership of the mark.
But this strategy doesn’t always work. In 2015, the TTAB found that defunct fast-food chain Del Taco had abandoned its 40-year Naugles restaurant mark despite use of the mark on clothing. The ruling paved the way for a food blogger to apply for registration of the Naugles name.
In India, the Uncle Chipps brand dominated the potato chips market for nearly a decade after it was launched by Amrit Argo in 1992. PepsiCo subsidiary Frito-Lay acquired the brand in 2000 and sought to commercialise its own flagship snack-food brand, LAYS, which swiftly came to dominate the Indian snack market.
But to ensure continued use, the Uncle Chipps brand is still distributed and sold in select states in India to thwart any zombie companies seeking to seize such a well-known and nostalgic brand.
Reputation matters
Brands that wish to thwart zombie companies often rely on the concept of residual goodwill.
This centres on the residual reputation of the brand among consumers, especially if the brand has acquired the characteristic of “vintage” or “historical.” It is particularly difficult to prove the existence of such goodwill, however.
The goodwill of the mark as used by its original owner may well continue in the form of continued consumer loyalty and trust attached to the mark, says LaLonde, who cautions: “But even if there’s goodwill in the hearts of consumers, courts won’t grant relief if the original mark was abandoned. Residual goodwill and fond memories don’t take the place of use in commerce.”
Brands that have discontinued the use of marks that are culturally sensitive and/or perpetuate racial stereotypes face a particular conundrum. They are unable to use the marks, but this means zombie businesses wishing to capitalise on these well-known marks are tempted to file trademark applications for them.
In recent months, the USPTO has received multiple applications for ‘Aunt Jemima’ for pancake syrup, and ‘Uncle Ben’s’ for instant rice.
PepsiCo’s Quaker Oats, the former owner of Aunt Jemima, appears to be taking action against zombie companies. The company, for example, has included a small image on its new packaging for the rebranded syrup, Pearl Milling Company, that says, “Same great taste as Aunt Jemima,” “likely precluding the zombie brand from taking over the earlier name,” explains LaLonde.
According to brand experts, companies in this dilemma are hoping that the taint of disrepute will be a bulwark against such aspiring zombie brands. As Earle notes, while every scenario is unique, in many cases of abandonment, reputational damage can be permanent.
“Brands just lose their lustre and fade away,” he says. “After all, you don’t see many blimps named Zeppelin or ships called Titanic these days.”
Brand sustenance
So, when it comes to determining the fate of their brands, how can owners and guardians conjure the best solution?
“It’s critical for companies to remain aware of brand perceptions and consumer trends when it comes to thinking about the future of a brand and potential abandonment,” emphasises Allison.
Where there is a will, there is a way, and ultimately brand owners must perform a form of protective vigil over any vanishing brands if they want to revive or safeguard them in the future.
“Companies should remain focused on trademark prosecution and enforcement activities to maintain the overall health of the mark,” she suggested, “while also strategising on potential legacy programmes for keeping the brand safe from zombification.”
This article first appearing the INTA Daily News, which is published by WIPR.
