It is estimated that intellectual property comprises a full 80 percent of the value of most businesses today. A good percentage of this value comes from the goodwill consumers associate with the company's image and brands. Protecting and enhancing these intangible assets involves a multi-disciplinary approach, including marketing and communications management, the careful selection and administration of licensing programs, and a targeted approach to registration and enforcement of the intellectual property surrounding the product/service—a mix of trademark, copyright, and patent protection.
This article is the first in a six-part series that will explore how companies can leverage and protect intellectual property to enhance their reputations and grow the value in their brands. In today's article, we will look at the doubled-edged sword offered by social media and the online world in general, which present both a tremendous boon and risk to brand growth and protection.
There is no doubt that the engagement between customers and brands has received a significant boost from the advent of the online marketplace and social media. The past two decades have provided marketers with a whole new arsenal of tools for engaging consumers in a meaningful and timely way. We now know more about target consumers than ever before, can track where they are and who they are with, and can deliver personal offers in real time to those most likely to act on them. On the flip side, consumers are given a voice as never before, and can play a significant role in influencing the purchasing decision of others. And online fraud has become a significant problem, with counterfeiting alone estimated to make up 5 percent to 7 percent of world trade.
Brand owners must take a multifaceted approach to online brand enhancement and protection. First, brands need to control the internal message. Brand managers need to ensure their companies have a strong internal policy as to who can communicate on the behalf of the brand as too many voices can dilute the brand message.
Second, brands need to deter the proliferation of confusing web uses. Company's must balance ensuring that fan sites and commentary pages are appropriately labeled as such, with avoiding heavy-handed enforcement that could create a public relations fiasco. Yet, brands need to take a strong stand against traditional online infringement and counterfeiting.
Third, brands need to consider how to best use and protect mobile applications, which is where the vast majority of electronic engagement will take place in the future. The risk of mobile platforms can come in the form of impersonation, malware, and even viruses. Brands need to make sure that they regularly monitor mobile application marketplaces for infringing offerings, and protect their mobile applications via a strategic mix of trademark, copyright, and design and utility patent protection.
Fourth, if you think the Internet is the Wild West now, just wait six months. Over the next year, we will see the launch of hundreds new generic top level domain names (gTLDs), the letters that come after the "dot" in a domain name address (currently limited to a handful including .com, .net and .org). This expansion will include the ability to use non-Latin characters in domain names, and the advent of new TLDs in Chinese, Arabic, Cyrillic, and the like will have enormous consequences and dramatically transform the Internet.
While these new gTLDs provide exciting opportunities in terms of organizing the marketplace around certain categories, they also will create more opportunities for those who register, traffic in, or use domain names with bad faith intent to profit from the goodwill of a trademark belonging to someone else, and will increase defensive registration and dispute costs. Although there is no perfect solution, brand owners should consider taking advantage of the newly instituted Trademark Clearinghouse, a central repository of authenticated registered trademarks. The Clearinghouse will allow registrants early registration under new gTLD registries as they launch, and will provide access to notification and dispute resolution proceedings.
Finally, before engaging online, companies need to make sure that the brands and other indicia of source they have selected (including logos, slogans and trade dress) are clear for use, and protected by appropriate trademark and copyright registrations, and patents. It is also good to bear in mind that such intellectual property protection is limited in geographic scope. Given the proliferation of counterfeiting and infringing activities that arise overseas, U.S. entities should consider filing strategies that will protect them not just in the U.S., but in areas in which they expect their clientele to be in years to come.
A thoughtful approach to online brand enhancement and enforcement, created by a partnership between a brands' marketing and legal teams, can help a brand stand out in a cluttered marketplace, and enhance client loyalty.