Essentials of a good brand policy

Intellectual property assets are very important to any company and play a pivotal role in a company’s growth and trademarks form an important sub-set of intellectual property assets. Trademarks are used to identify the products or services rendered by a company and help differentiate from its competitors by creating a distinct identity, image, and reputation.

Trademark reputation and the ensuing trust/goodwill is attained through numerous marketing initiatives undertaken by the company. ‘Brand’ or ‘brand name’ is a marketing jargon often used interchangeably with ‘trademark’, the term used in intellectual property law. The term ‘brand’, of course, has a wider connotation in the business world as building a strong brand: establishing the brand equity of a business is considered a pivotal task as an extension to choosing, registering, or maintaining trademarks.

A company’s marketing initiatives will enable them to achieve brand awareness, brand preference and eventually a robust brand image. Such marketing initiatives invariably revolve around usage of brand name (which includes trademarks) at various events and through subsidiaries, affiliates, group companies, partners, vendors, customers and other third parties.

As companies allow usage of their brand name either as part of marketing activities or in the ordinary course of business, exercising diligence is important. Companies should ensure that the value of their brand names remains intact and that any usage inures to the benefit of the company. Further, they should also aim at ensuring that the image portrayed through the usage of the brand names is consistent and depicts the mission of the company. Because of this, having strong policies and procedures to govern the adoption and usage of such brand names is essential. Such policies are called brand policies (also called trademark policies) which have multiple functions and are one of the most important IP documents of any company.

Importance of a brand policy

The brand policy normally aides a company in creating a brand image by streamlining the process of usage of the brand name by defining a set of guidelines and by this extension regulates the process of licensing the brand name further to other entities.

The use of the company’s brand names, seals and symbols in internal and external communication, invoices, marketing material, publications and other communications representing the company are all regulated by the brand policy. In cases of any subsidiaries or business collaborations, the joint representation of the marks and their usage are also guided by the brand policy.

The brand policy should also contain the process to identify brand names and their adoption. Although, this is in deviation from the common archetypes of brand policy which are focused primarily on defining the dos and don’ts of usage of brand names, guidelines for ‘identification and adoption’ of brand names will ensure 360-degree approach towards brand protection, right from the inception stage. This will, in turn, maintain consistency in the trademark portfolio of the company as well as aid in strengthening the brand image.

The brand policy should also define the process to be followed to deal with any unauthorized usage that deviates from the policy guidelines.

Contents to be covered under brand policy

The policy should outline –

Process for the adoption and registration of brand name;
Guidelines for internal usage;
Process for licensing the brand name to group companies, third parties, vendors, customers, partners –brand name license agreements, royalty payments; and
Process for dealing with any misuse/unauthorized usage.

Here are some tips to consider when drafting, reviewing or revising brand policies and procedures. These tips will enable a company to formulate a standard operating procedure by defining the pre-requisites, roles and responsibilities of each department in the identification of brand names, their creation, and adoption by the company in line with the requirements under Trade Marks Act, 1999 (‘the Act’).

Process for adoption and registration of brand name

Selection of brand name – Process for initiation of the brand name should be clearly defined by specifying a format through which request for a new brand name can be raised to the relevant department. Usually, such initiation requirement should be backed with a business case or trademark objective statement which will cover details such as the purpose of a mark, services/goods for which it will be used, commercialization (whether direct marketing or sub-licensing envisaged), territory of usage, scope of usage etc.

Ideally, marketing/brand department should be the custodian of such requests and be responsible to create the mark (word/composite form).

Guidelines for brand name creation – Policy should also list down the requirements of a ‘trademark’ as specified under the Act (e.g. non-descriptive, non-dictionary term, not similar or identical to any existing marks in the market). The marketing/brand department should adhere to these while coining a new brand name.
Defining roles and responsibilities of each department – Policy should mention the roles and responsibilities of internal stakeholders at each stage of initiation, creation of the brand name, evaluation, and registration. E.g. marketing/brand department can be the custodian of all brands and seek routing of all requests related to any brand name from all internal business divisions through their team. The marketing/brand department, after finalizing the brand name, can liaise with the legal team for initiating a search to ascertain availability and advise on the registration process.
Pre-requisites for adoption of a brand name – Policy should clearly outline the guidelines to conduct the trademark search; departments responsible for conducting trademark search; internal approvals required prior to conducting trademark search; and format for communicating the search results to business stakeholders.
Registration of trademark and maintaining the trademark status – Policy should clearly outline the process for applying the brand names which are cleared through trademark search activity. Further, the roles and responsibilities of the marketing/brand department in maintaining the trademark status by creating a repository of documentary evidence supporting the commercial use of the trademark should be well-defined.
Report unauthorized use – The policy should also specify the process for reporting any unauthorized usage the company’s brand names by third parties to the legal department/senior management and the approvals required before initiating any legal action. It is recommended to engage a consultant for trademark watch service to pre-empt any move by a third party to infringe/pass-off the company’s brand names.

Usage guidelines for company trademarks

Usage pre-requisites – An express statement should be published that no usage of the brand name is allowed without a valid license or permission of the company.
Each brand name should be properly identified – Specify whether the brand name is a word, logo, tagline, etc., and provide a listing of it so that internal departments know what is protected. This will help marketing/brand department to be vigilant of company’s marks.
Ensure quality control – Outline a licensing process to approve the manner in which the brand names are depicted e.g. positioning of the brand name in a marketing collateral/PPT of a third party) and limit the scope of the license.
Clearly articulate usage standards – Usage standards, in general, should be aligned to trademark requirements under law and can include font, spacing, and color preferences and design scales to prevent distortion.
Uniformity in usage across group companies – Apply licensing requirements consistently and equally to all groups, employees and, internal departments. This is important to ensure that trademark rights are not diluted and the goodwill and reputation gained by the brand name remain intact.
Guidelines for usage of TM or ® symbol – Define the manner in which the symbols should be used and the need for usage of such symbols. It is important to bear in mind that the Act does not mandate any depiction through symbols, this is more from a practice perspective.

Usage of symbols for goods/services should be based on the trademark registration status only. In the event, goods/services are meant for export, care should be taken to ensure that the symbols are used only when there is registration pending/trademark registered in the country of export, to avoid any misrepresentation-related claims.

Usage of third party licensed brand names

All the points covered under the previous point will apply here. In addition, any usage of third party brand names, graphics, seal etc., should be based on license or permission and in accordance with the usage standards specified therein.

The policy should outline the process for obtaining internal departmental approval and report periodic compliance with the license requirements specified by third-party trademarks.

Conclusion

For all companies that are focused on diverse portfolios/service lines, their brand(s) is a key aspect of representing the company’s diverse body of work successfully to the world at large. Therefore, brand protection and enforcement are a serious aspect in creating a company’s image and plays a pivotal role in increasing their market presence.

Brand policy helps define the parameters of consistent use of a company’s brand names which contributes to its reputation, to the success of the businesses carried out by the company, to maintaining the brand name’s value and goodwill so as to the benefit from consumer recognition, and to maintain consistent visual and brand identity so as to prevent trademark dilution.

Trademark policy or brand policy will come handy as a ready-reference to all the stakeholders within the company and outside who are allowed to create or use the brand names. The process defined under the brand policy will act as a quality control mechanism, crucial to ensure parity in the trademark portfolio of the company and to ensure that all of the company’s brand names reflect its mission collectively.

DISCLAIMER: The information provided in this article is for educational purposes only. The same cannot be construed as legal advice.