Introduction

Consumers are faced with a multitude of product choices.  Typically they seek to reduce the complexity of their buying decisions by focusing on key pieces of information.  In order to influence the decision making process a brand name should symbolize the image and values desired to be associated with the brand.   The brand name chosen should reinforce the brand’s desired positioning by associating it with attributes which will influence consumer buying behavior.  The brand name should also assure the customer that the goods or services associated with it will be of the quality or value the customer has come to expect.

A brand name must distinguish the brand owner’s goods or services from those of its competitors.  In this sense the brand name should be unique so that it is clear to consumers that all goods bearing the brand name or services provided in association with it come from or are sponsored by the brand owner. This will not occur if the brand name selected is confusingly similar with a brand name already in use by another.

A brand name may also be presented in connection with a design component or logo.  The design may become a symbol which represents the brand.  Many people remember and respond to symbols more consistently then to words.  The arch shaped design used by McDonald’s Corporation is a good example of the effectiveness of a symbol as part of a brand.

Choosing a Brand Name

New product ideas or concepts must be identified and evaluated in the context of the industry dynamics and the competitive environment.  Once it is decided that the concept is viable an assessment can be made of what is expected of the new brand.  Typically this will be expressed in terms of anticipated sales but other basic considerations must be addressed, for example, will the brand be a manufacturer’s brand or a distributor’s brand, a specialty brand or a low price brand.  The assessment should be made in conjunction with market research directed to external market forces such as the state of competition, the nature of the product and substitutes for it and current economic conditions.

The geographical markets in issue will be particularly important.  In a global market there are a multitude of linguistic and cultural issues to be considered.  An assessment must be made to determine how consumers will pronounce the brand name and  its meaning in each relevant language.

Matters specific to the brand owner need to be considered such as the extent of corporate assets and the nature of its business and its current brands.  The end result should be a written business plan specifying anticipated sales, distribution channels and customer demographics which will set out the criteria that the brand must satisfy.

Once a plan is in place potential brand names need to be generated.  Sources of such names include employee suggestions, group discussions and studies and input from advertising agencies or other specialists.  Proposed names can be ranked in terms of anticipated effectiveness against the plan.

Desirable Brand Name Characteristics

Any proposed name should have the following desirable characteristics:

  1. Brevity.  A brand name should be simple and easy to understand.  Long brand names, at least the ones that survive, tend to be simplified by consumers, for example COCA COLA becomes COKE.
  2. Easily remembered.  Consumers have limited time and energy to devote to brand names.  They are faced with a multitude of product choices.  It is advantageous to choose a brand which is memorable and distinctive.
  3. Easily readable and pronounceable.  As additional markets are considered linguistic and cultural issues will make it more difficult to achieve this characteristic.  Care must be taken to avoid unintended connotations.  For example, PUFFS brand tissues may be acceptable in North America but PUFF in German is a colloquial term for whorehouse and in England it sounds similar to “poof” a derogatory term for a homosexual.
  4. Be meaningful.  A name should communicate positive product attributes and avoid unpleasant connotations.  Brands names such as LEAN CUISINE or DIE HARD are good examples.
  5. Allow for some flexibility.  If possible a brand name should allow for adaptation to changing market needs.  For example Anderson Consulting changed its name to ACCENTURE to communicate the emphasis it placed on the future and BOSTON CHICKEN changed its name to BOSTON MARKET to reflect a shift to family meals.  These changes allowed for more flexibility of the brand.  LASTMINUTE.COM for travel services may be too limiting..
  6. Be suggestive of the product class. It may advantageous to choose a brand name which suggests the attributes of the class of product in issue. Frequently this type of brand name is easy to recall, for example, TICKETRON for use in association with vending tickets for sports and entertainment events.  However if such a mark is descriptive it may be difficult to protect.  In addition, it may be difficult to expand such a mark into other product categories.
  7. Work with a symbol or slogan.  It is advantageous if a brand name works well with a symbol or slogan.  For example, the trade mark APPLE has been widely used in association with computers and computer software together with a stylized representation of an apple.
  8. The proposed name must be legally available in the countries in which it is proposed to be used.  This means that trade mark availability searches need to be carried out.  Consideration must also be given to the availability of domain names which include the brand name or a substantial part of it and availability for social media use.  Even if the brand owner does not intend to use social media the fact the mark is in use  in this context there can have  a potential impact on the brand owner.
  9. The proposed name should also be protectable under the Trade-marks Act. Ideally the mark should be legally strong; marks that are descriptive or common to the trade, even if protectable, will only be entitled to limited protection.

Trade Mark Searches

Once a potential trademark is selected searches should be conducted to determine whether or not it is available for use and whether it can be registered under the Act. It is extremely important to conduct these searches at as early a stage as possible and certainly prior to any use of the mark.  Searches should also be carried out if a trade mark is being extended to additional wares or services not included in the initial registration. Similar considerations apply to distinctive design elements of proposed marks. There will be copyright considerations if the design elements are “original”.  Care must be taken to ensure the design is not a copy of an existing design.

Consideration should also be given to domain names and associated websites.  The necessary steps to secure domain names should be taken before any public announcement to minimize the risk of cybersquatting. The use of a confusing mark on a website directed to Canada can be a problem.

Reference must be made to existing registrations and pending applications. Consideration must also be given to elements or components which make up the mark as well as any phonetic equivalents.  If a French language equivalent of the mark is likely to be used, a separate search for this version of the mark will be required.

The following information will be required in order to carry out a search:

  1. The proposed trade mark and any French equivalent and any proposed design presentations;
  2. A description of the wares or services with which the trade mark is proposed to be used. For searching purposes in Canada general categories will be sufficient and are preferable to an overly specific list which may be changed;
  3. Any information which may be available concerning the use of similar marks by competitors.

It is also useful to search legal databases, directed to intellectual property matters, to ascertain whether the mark or marks similar to it have been the subject matter of previous litigation.

If the words making up the trademark are unusual reference should be made to standard dictionaries so that the brand owner has a clear idea of the meaning of the mark being sought.  Dictionary definitions can also help in making the assessment of whether the mark is clearly descriptive of the wares and services or whether it is merely suggestive

Cautions

A brand owner should be cautious in choosing a coined word as a brand name.  If a brand name is chosen which consists of a coined or invented word with no inherent meaning, such as EXXON, considerable financial resources and time may be required before the name becomes known. Similar considerations apply to initials.  However, coined words may be the only viable choice to avoid linguistic and cultural problems faced by international brands.

A brand name which is descriptive of the product, the brand owner or the geographic locality from which the product originates may not be a good choice.  A brand name which suggests but does not describe characteristics or properties of the product may be more acceptable. An example is the trade mark TALON for zippers. A suggestive name may be potentially more appealing to the customer and more easily remembered.

There may future problems associated with the choice of a descriptive mark as opposed to a more unique mark.  If it is anticipated the product may have a short life or the marketing budget is small individuals responsible for marketing may wish to use a descriptive mark which will quickly convey to consumers the benefits of the product. Unfortunately if the product is successfully introduced in association with such a mark it may be impossible to stop competitors from using similar marks on competing products.

There are advantages to be gained by tying the brand name to the brand owner’s name.  If goodwill has been built up over the years, a new brand extensions can gain acceptance by being linked with this historical goodwill.  Consumers will feel more confident in purchasing wares or services which are associated with a well-established firm.  For example, H.J. Heinz Company has consistently used the HEINZ component of its name as part of the brand name for a multitude of products.  However, care must be taken to ensure that such a brand name is used as a trade mark and is not simply a trade name.  The use of a business name may not support a trade mark registration unless the trade name is given special typographical treatment or prominence.

This strategy is not adopted by all brand owners.  For example, Procter & Gamble has always used individual brand names in association with product formulations and positionings which appeal to different segments of different markets.  Further, if the individual brand approach is adopted and the new brand is unsuccessful, goodwill associated with the firm as a whole will be damaged less than if the brand had been directly tied to the corporate name.

Any brand name must also comply with relevant Federal legislation.  For example, the mark as used cannot be false or misleading or contrary to the Food and Drugs Act

Brand Extensions

There are significant risks and costs associated with launching a new product or service.  Many new products fail.  One method of reducing the risk is to extend an existing brand to a new category of products or a service. When this is done the core brand is extended to the new product. A consumer seeing the core brand will attribute its qualities to the new product.

The promotion of the new product will benefit all of the products in the product line.  For example the VIRGIN and NIKE brands have been extended across a diverse group of products and services.  Such extensions may be carried out directly or by licencing a third party to manufacture and sell the new products under a licence from the brand owner.

Developing a brand name which is derived from an existing brand name to create a family of brands with a common denominator is conceptually similar to a brand extension.  An example is KODAK and KODACHROME.  Care must be taken to ensure the variant is legally protected to avoid any negative impact on the distinctiveness of the lead brand name.

Unfortunately there are potential costs associated with leveraging a brand in this fashion.  First, if one of the products loses creditability all of the products and services associated with the brand may be affected.  Second, the core brand may be become diluted.  For example it has been suggested that the HEWLETT-PACKARD brand for use in association with high-end scientific instruments has been diluted by the use of the brand in association with value priced printers.

Name Changes

The considerations relating to a change of the brand name are very similar to those associated with choosing a new brand name.  In many instances because of changes in the way a company does business, mergers and acquisitions or because of negative associations with an existing brand name it may become necessary to change that name.

Unlike evaluating a new idea or concept, in this context long term business objectives will be more important.  The market opportunities for differentiation and strategic naming objectives must be used to evaluate proposed brand names.

A well planned and well executed communications campaign will be required in order to implement the change.  The campaign must extend to communicating the strategic vision behind the new name to employees and other internal audiences who will have to live with the new brand name.  Internal communications must be effectively used to generate excitement about the new name as well as generating acceptance and sustaining commitment.

The brand owner must also consider the potential market responses which may result when a brand name is discontinued.  A U.S. case illustrates some of the relevant considerations.  In this case the plaintiff used the trade mark BREEZE to identify its radio broadcasts but changed its on-air name from the BREEZE to STAR 98 and announced the change through on-air advertisements.  Other aspects of the plaintiff’s programming such as call in shows and the like remained unchanged.  In addition, the BREEZE mark continued to appear on some of the plaintiff’s materials including the sign at its headquarters, business cards and promotional materials.

Shortly after the change the defendant, which also operated a radio station, changed its on-air name from the MIX to the BREEZE and adopted a design trade mark very similar to the plaintiff’s design presentation of its mark.  When the plaintiff learned of the defendant’s activities it immediately instituted proceedings and sought an interlocutory injunction. In response to the motion for an injunction the defendant argued that the plaintiff had abandoned the BREEZE mark. The motion judge disagreed and granted an injunction and the defendant appealed.

On appeal the court observed that an infringer must prove two separate elements in order to succeed with a defence based on abandonment: that the plaintiff had ceased using the mark in dispute and that it had done so with the intention not to resume its use.  On the facts before it, the court was not prepared to interfere with the judge’s grant of an interlocutory injunction.

While the plaintiff was successful it remains to be seen whether it succeeded as a result of a conscious plan or because it had not completed all aspects of its changeover in a timely fashion.  A conscious plan to maintain use of the brand name to a degree sufficient to support the registration would be preferable.

Trade Mark Protection in Canada

A brand owner should understand how the trade mark system works when selecting a brand name since the decisions made will affect the rights potentially available in the future.

In Canada, the Trade-marks Act applies to a brand name and is of fundamental importance. Obtaining a trade mark registration facilitates the protection of the brand name.  There are also common law rights associated with a brand name which may be asserted independently.

The Trade-marks Act provides for a public registry system which is national in scope, showing proscribed information for each registered trade mark.  The Act facilitates the protection of trade marks by granting exclusive rights to owners and providing for public notice of the rights.

The power of attraction of trade marks and other famous brand names is recognized as among the most valuable of business assets. However, whatever their commercial evolution, the legal purpose of trade marks continues to be their use “to distinguish wares or services manufactured, sold, leased, hired or performed by (the trade mark owner) from those manufactured, sold, leased, hired or performed by others” within the meaning of section 2 of the Act.  A trade mark is a guarantee of origin or source and inferentially, an assurance to the consumer that the quality will be what he or she has come to associate with a particular trade mark.  The Act is, in a sense, consumer protection legislation.

The Act also rests on principles of fair dealing and is sometimes said to hold the balance between free competition and fair competition.  In applying its provisions the interests of the public and other merchants as well as the interest of the trade mark owner must be considered.

The purpose of a trade mark is to create and symbolize linkages.  A trade mark is a symbol of a connection between a source of a product and the product itself.  This is reflected in the definition of a trade mark contained in the Act.

This registration system co-exists with common law trade mark rights.  Common law rights are acquired through actual use of the common law mark in association with wares or services.  As a common law trade mark becomes known and goodwill is associated with it, the owner of the mark will be able to assert claims against others who use confusing trade marks in the specific region or area that the common law trade-mark owner has built up goodwill.  Common law trade mark rights may be helpful on a case by case basis or may be impediments to overcome in other cases.