Creating a sustainable online brand management strategy
Fabio Angelini and Lorenzo Litta, of the International Trademark Association, caution companies against being too aggressive in protecting their trademarks online.
The global financial crisis of the last two years has deeply affected companies’ IP departments and, as a consequence, their IP attorneys and agencies. More than ever, the key word for a successful brand management strategy is sustainability. Big budgets are gone and lavish spending is a thing of the past. Companies worldwide are extremely cost-conscious and very attentive to returns on investment.
This presents a wonderful opportunity for many companies to rethink and revise their online strategy and bring it in line with their overall trademark practice. It is much easier to change practices when outside events force you to do so, than to try to single-handedly change corporate inertia.
I have witnessed the rise and fall and rise again of the Internet in the last two decades from the vantage point of a WIPO panelist adjudicating domain names disputes, an outside counsel arguing on the first cases in my country [Italy] against cybersquatters and as an in-house counsel leading the filing strategy team of a large corporation. In my view, if we look back rigorously and rationally at the choices that were made, we see that most of these choices were due to the lack of understanding of the system, coupled sometimes with the desire to correct mistakes that could have been easily prevented. There was rarely a genuine need to do something, resulting in a waste of resources that could have been otherwise and more productively employed.
Now, we should know better.
An effective online brand management strategy is an integral part of a good and effective overall brand management strategy. Any successful strategy must be comprehensive and must focus on those factors that are crucial to the final outcome.
It is said that amateurs talk tactics, soldiers discuss logistics. There is nothing different in our field. Amateurs discuss registering domainnames as a matter of course, or engage in scare warnings aimed at cybersquatters whenever a new top level domain (TLD) enters cyberspace. The media focuses on stories of disputes over thousands of domain names. But that’s not what brand management is all about. Those issues are irrelevant tactical considerations if they are not backed up with a solid plan.
Establishing a flexible, realistic and proportional approach to problems rather than rigid, artificial and one-size-fits-all rules of engagement, being active and rather than reactive, along with creating cost controls and metrics to measure cost-effectiveness, are the equivalent of the logistics of successful and sustainable online brand management.
Of course, there may be differences. A general strategy that works for all companies does not exist. Each company is different just as each trademark is different from other trademarks within the same company. Companies that exploit the full benefits of the Internet will have different needs and different global objectives than those that use it as just another venue to promote and advertise their goods and services. But building a sustainable strategy for both kinds of companies is the result of the same decision-making process.
No brand manager can design a brand strategy all alone. Marketing departments and interested business units are fundamental stakeholders and should always be in close contact with the brand manager. The brand manager should have a clear understanding of the way sales and marketing work, which means being cognisant of existing products and trademarks as well as future projects.
In other words, if a new name is selected for a new product or service, the brand manager will have to understand along with the marketing department and the appropriate business unit whether there are plans to single it out from the company’s other products or services. If so,it makes economic sense to give a particular emphasis to this particular product to justify not only its registration as a domain name but also the setting up of specific content to which a particular domain name may be dedicated.
However, it would be a mistake to just look at the marketplace when making choices. A brand manager must also objectively acknowledge that in the last few years, consumers have become much more sophisticated and much more Internet-literate. Yet, by looking at the way most companies deal with online issues, it seems as if consumers are still not being taken seriously.
We are all much too used to the ease with which search engines deliver multiple answers to our queries. Anyone looking for a product on the Internet will more likely do a search on its name using one of these engines than try to guess the correct URL. Yet, companies all over the world have been ‘convinced’ that they need to register their marks as domain names because if they don’t, consumers won’t be able to find their websites. If this is wrong, why are companies still doing it?
The answer is the fear of cybersquatters. Register or you will be vulnerable to cybersquatters, the message goes.
But the fear of cybersquatters should not drive the decision-making process. When a product becomes successful, it may become a target or a reference for competitors or for others who are looking for a shortcut. However, the overwhelming majority of companies do not register hundreds of trademarks worldwide, and those companies that do register worldwide do not do so simply to prevent the possibility of some ill-intentioned individual registering their trademark in bad faith. Companies register their trademarks in a particular country because they are going to use them and need to protect the goodwill associated with them. It’s an investment in an asset, not an insurance against miscreants.
Regrettably, a look at the cyberspace data reveals a cyber-reality that is incomprehensible. Companies that barely deal within the boundaries of their own country, register country code TLDs so exotic that no one knows what they are and where in the world they are. Companies whose own website has not been updated in years think it necessary to register as a domain name each new trademark they adopt. Companies fight over domain names that are so unlikely to ever be searched for that one might wonder why they are doing so in the first place.
Brand managers who know and understand their company’s business will design a domain name registration (or non-registration) strategy that primarily takes into account a cost-benefit analysis, because it doesn’t make sense to invest resources in witch-hunts.
Many would disagree, arguing that registering more means owning more. This is misguided, because a company that registers too much ends up spending resources on something it does not really need. Unless there is a proper business interest and an economic justification to register a domain name, the question should always be: do we really need it?
Brand owners do not really need to buy multiple domains to protect their brand identity. And surely they do not need to buy all possible combinations to make sure that consumers will find their products on the Internet. If a customer is looking for Apple products, typing the name ‘Apple’ into a search engine will generally lead to the correct website.
But what should a company do if a cybersquatter registers a domain name that is identical or confusingly similar to its trademark? That is where good planning comes into play.
The planning should realistically assess the degree of ‘tolerance’ that one company can afford, a tolerance that will vary in accordance with the relevant market sector, the dimensions and geographical scope of the company business, and last but not least, consumers’ responses and expectations. A company that deals in rocket components probably will have a greater safety zone than a company in the luxury and fashion industry. The threshold of alarm for companies dealing in luxury goods is surely higher because such goods can be easily sold everywhere, and an infringing domain could host an avenue for the sale of counterfeits and/or turn aside buyers, ultimately damaging the allure that is a fundamental component of these types of goods.
Yet, even for these latter types of companies, pursuing all fake domain names may not be agood idea. For instance, going after a domain name that results in an empty URL does not make economic sense, even under the ‘it’s a matter of principle’ theory. In the business world, while principles are often disposable, profit usually is not. A brand manager should identify in advance which episodes may trigger a response (for instance, if the domain name corresponds to a website doing e-commerce or has objectionable content) and then decide what the proper responses are. Making UDRP (Uniform Domain-Name Dispute-Resolution Policy) filings or lawsuits, with no regard to the actual circumstances, and without first trying to contact the domain name holder and negotiate a settlement, does not seem to be reasonable and sustainable conduct. Only if negotiations fail, or if there are special circumstances that warrant immediate action (for instance, consumer complaints, or a clear danger to brand identity or marketing initiatives), should a UDRP or a lawsuit be considered.
Finally, should a brand manager adopt a different strategy to handle online counterfeiting cases? Counterfeiting is a problem that affects a limited number of companies, so a good brand manager who knows the company’s business should determine in advance whether there is a need to invest resources in preparing for a war that does not need to be fought in the first place.
But if online counterfeiting represents a real problem, then the approach should always be the same: plan in advance, and be flexible and prepared for a change in circumstances. The starting point would be to involve the business units since they are most knowledgeable about the products and the marketplace. The business units should be the first line of defence, both by monitoring the Internet to discover how and where counterfeits are offered online and by raising consumers’ awareness of where to get the original products.
Of course, a brand manager must also assess the threat level and its scope, because for some companies, the sheer number of alleged counterfeits is so large that it may be more convenient, if not necessary, to outsource the online surveillance. However, even where online surveillance is outsourced, the business units must always be kept in the loop and the brand manager must always establish a threshold for intervention, rather than just automatically going after any incident. There are many factors to be considered in establishing the appropriate threshold: the type of infringement, the number of products concerned, the types of products affected, how deceitful the infringer’s activity is, whether ornot consumers complain, and what signal the company wants to send to the outside world. Whatever the factors, a brand manager should strive to achieve flexibility and unpredictability, for example, by pursuing cases that do not fit the norm, since most counterfeiters modulate their actions according to brand owners’ established defence strategies.
In conclusion, designing and/or redesigning a cohesive and sustainable online brand management strategy is a demanding task, but not an impossible one. It needs discipline as much as pragmatism, and in a world in which the company’s financial bottom line is quite often the ultimate reality check, brand managers need now more than ever to be able to offer sustainable solutions. Necessity is, after all, the mother of invention.
Fabio Angelini is a counsel at De Simone & Partners. He can be contacted at: fangelini@desimonepartners.com
Lorenzo Litta an associate at De Simone & Partners. He can be contacted at: llitta@desimonepartners.com
