How to avoid a rebranding disaster

Rebranding disaster or successful rebranding exercise? A rebrand is often an exciting time for a business, writes Nils Versemann. But before adopting a new brand, whether for a business or a new product, comprehensive trade mark searches in key markets are critical.  

A trade mark clearance search can identify if anyone else has branding rights that could conflict with the new brand. If they do, they could demand the new brand be changed or take legal action.

Identifying this risk in time is the legal equivalent of dodging a bullet and something that lawyers encounter regularly when performing searches. It means a new brand can be chosen that avoids any issues.

War story 1: Some years back, we were advising a client on a rebrand.  The searches brought up similar existing trade marks owned by Apple and the Church of Scientology, two organisations renowned for aggressively protecting their IP.  Wisely the client chose a different brand.

Not obtaining prior clearance searches

Sometimes it doesn’t all go smoothly because searches are omitted and hard lessons are learned.  

War story 2: The first we knew of a client’s rebrand was when an email arrived that looked different to before.  They had rebranded. Out of curiosity we performed a trade mark search which showed that the client had adopted a brand that two other businesses in the same industry were already locked in a legal dispute over.  Our client had unknowingly walked into the crossfire of a shooting war.

It would have been too embarrassing for the client to undertake a new rebrand immediately.  The second rebrand occurred a few months later. Fortunately the other two businesses were so busy arguing with each other, they never seemed to notice.

War story 3: With a different client, the first we knew of their impending rebrand was when we received an invitation to the launch party, together with the request to register the trade mark.  The trade mark application encountered significant objections that took years a significant amount of work and an expert IP strategy to carry it through to acceptance. 

Searching too late can cause a rebranding disaster

Ideally trade mark clearance searches should be undertaken prior to the new brand being locked down and too much money being invested in detailed design work.  

War story 4: We were asked to advise on a client’s new trade mark just prior to launch.  The client had already spent over $1 million on the new brand when it became aware of a number of problematic existing trade marks that could potentially derail its launch.  It was only at that point that they involved us.

We took an unconventional approach and negotiated with the owner of the oldest existing trade mark to acquire it.  A deal was done and the trade mark was purchased. While this was a happy ending, the client could have just as easily been forced to write off its $1 million investment and been forced to start again simply because it did not commission trade mark searches early enough.

Waiting too long to register

When the new branding has been chosen, it is best to proceed promptly with trade mark.  Otherwise there is a real risk that somebody else will get in first.

In Australia, rights in a trade mark belong to the first person to either:

  • use the trade mark; or
  • apply to register the trade mark.

If you choose your new branding, but then delay both your brand launch and trade mark registration, you run the risk of being thwarted by somebody else who does so before you.  

War story 5: We have seen situations where we undertook trade mark searches months earlier, but by the time our client was ready to register its trade mark, somebody else had applied to register practically the same trade mark.  That affected the future plans of what our client would be able to use that mark for, because certain uses were effectively blocked.

Doing it yourself and getting it wrong

Sometimes a business will do the right thing in applying to register a trade mark, but make critical errors in the application.  

They will seek registration in relation to the wrong goods or services, or forget to include certain services.  For example, they might apply for registration in respect of particular goods, but not related services such as installation, repair and maintenance services.  Or they might apply for registration in the name of the company director when it is the company that has used the trade mark to date – that discrepancy will forever leave the trade mark vulnerable to cancellation.

Doing it yourself is often a false economy, because you either end up with something that is ineffective or you have to spend more money fixing the problem.  Sometimes all a lawyer can say is: start again.    

So for your next rebrand or brand launch, seek legal advice to ensure it’s done right.

Author: Nils Versemann, senior associate, Macpherson Kelley