This week, the International Trademark Association (INTA) officially announced the election of David Lossignol as its 2019 president and chair of its board of directors. Lossignol, head of trademarks, domain names and copyrights for Novartis Pharma AG, commenced his one-year term on 1 January and will now help guide the association through the second year of its 2018–2021 Strategic Plan. In an exclusive article for WTR he outlines the association's priorities for the coming year and calls on the trademark community to facilitate positive change in the brand ecosystem.
The way that brand owners communicate with consumers is evolving, thanks to technology, globalisation, and socio-economic change. This is both compounding many existing issues facing brand owners as well as presenting new challenges and opportunities in how brands exist and grow in the global marketplace.
In this light, INTA has identified several key issues that it will be engaged in on behalf of its global membership during 2019 and beyond. These are counterfeiting, internet governance, brand restrictions and anti-intellectual property (IP) sentiment, the evolving role of trademark practitioners into brand professionals, the impact of innovation and change, the needs of entrepreneurs and small and medium-sized enterprises (SMEs), and trademark law reform in China.
Rethinking how to combat counterfeiting
The threat of counterfeiting continues to proliferate. Indeed, the growth of global trade and e-commerce has brought new challenges related to this issue. Exemplifying the scope of the problem, in 2018, Operation in Our Sites, a global collaboration between Europol, INTERPOL, and the US National Intellectual Property Rights Coordination Center, seized 33,654 website domain names distributing counterfeit and pirated items online—a dramatic increase from the 82 sites seized in 2010 when the operation was launched.
Tackling counterfeiting means bringing together all stakeholders, including government, enforcement authorities, customs offices, intermediaries, such as Internet service providers, and brand owners; and providing education, information, and training where appropriate. Valuable as such initiatives are, there is, however, always a risk that we are only tackling the supply of counterfeits and neglecting the demand.
A priority for the coming year, therefore, will be to rethink how to combat this criminal activity by paying greater attention to addressing the demand for counterfeits. This means understanding better why consumers buy fake goods and offering education to ensure that they realize the health and safety risks and other dangers that counterfeits pose, the benefits of buying genuine goods and services, and the positive role that IP and brands play in the economy, in society at large, and in our daily lives.
Among INTA’s efforts, the Unreal Campaign is the association’s member-driven public awareness initiative designed to educate teenagers about the importance of trademarks and IP, and the dangers of counterfeit products. It has reached some 40,000 students in 38 countries since it began in 2012, and has been spreading to additional countries each year. In 2019, INTA will continue to expand this program with a concerted effort to reach more teens and in more countries.
Brand owners need to engage on internet governance
Trademarks create an incentive for brand owners to maintain a predictable, consistent quality for their goods. That consistency in turn protects consumers, who can rely on trademarks to make quick, confident, and safe purchasing decisions. Consumers, in this way, come to trust brands as indicators of source.
Consumers are increasingly engaging with brands online. It is estimated that another person comes online every 10 seconds. And in approximately five years’ time, more than 70% of the world population will be online. Global B2C ecommerce is expected to reach an estimated US $2.3 trillion in 2018, and surpass US $4 trillion by 2020, to nearly 15% of all B2C trade.
Consumers have come to expect a secure, stable, and reliable internet, and (for the most part unknowingly) also place a significant amount of trust in the Internet Corporation for Assigned Names and Numbers (ICANN) to ensure that sensible and balanced policies govern the domain name system.
Brand professionals are having to pay more attention to Internet governance and the debates on legal standards applicable to the allocation of domain names specifically and Internet operations generally. This was illustrated in 2018 by the impact of the EU General Data Protection Regulation (GDPR) on the WHOIS system. On that issue, INTA is working within the ICANN multi-stakeholder community to develop a new policy to replace the Temporary Specification for gTLD Registration Data, which ensures that brands have access to the information they need to combat counterfeiting, infringement, and online abuse.
More broadly, the debate over WHOIS illustrates the impact that data protection laws, such as GDPR, can have across national borders, including on the enforcement of IP rights.
ICANN is not the only outlet for Internet governance questions. UN-sponsored initiatives such as the Internet Governance Forum and the High Level Panel on Digital Cooperation are tackling questions about how the Internet should be administered. INTA is monitoring these efforts. Brand owners need to engage in such debates to ensure the Internet retains its potential for growth, trust, and transparency.
INTA has established the WHOISchallenges@inta.org for IP professionals to share their experiences with the new, redacted WHOIS directory. The association is asking INTA members and non-members to provide real-world examples in order to emphasise the impact of the policy on consumer protection and IP enforcement.
Rights owners across numerous industries are at risk from brand restrictions
It is easy for those of us who work with trademarks every day to overestimate the level of understanding of IP among the general public. One example of what can result from misunderstanding or misapprehension of the role of IP is happening at a policy level with the increase in regulations and legislation to restrict the use of brands on products.
While brand restrictions began with tobacco, we’re now seeing the domino effect on various industries, such as alcohol and confectionery. For example, in 2016, the Chilean government banned the use of cartoon characters on food products with high sugar content, such as breakfast cereals, in an effort to counter the country’s rising obesity rates. Indeed, this could potentially further open the floodgates for governments and activists to restrict the branding of products tied to any behaviour they subjectively deem unacceptable. Brand owners across numerous industries beyond tobacco are at risk — for reasons unrelated to IP.
Brand restrictions affect the fundamental liberty of commerce and, in some instances, negatively create a presumption of equivalence between the products concerned. This weakens innovation, safety, and quality in the marketplace because it also reduces the incentive for a brand owner to sufficiently differentiate its products. In drafting such regulations, governments need to take a well-informed and balanced approach, considering health and safety concerns alongside public policy, economic matters, the protection of IP rights, and the role of IP in the marketplace. It is critical to ensure this balance is properly examined and maintained whenever such brand restrictions are under consideration.
Compounding the matter, the critical roles of trademarks, as sources of information, and brands, as promises of delivery and quality, are being diminished in the marketplace. This, together with misunderstandings about the role of trademarks, IP and brands in society, is negatively impacting brand reputation and fuelling anti-IP sentiment. Increasingly, IP is unfortunately viewed as a means for companies to abuse their exclusivity in the marketplace (with regards to patents) and unfairly inflate their shareholders’ wealth at the expense of consumers who buy their products and the communities in which they operate.
Addressing these issues involves working to demystify IP among both consumers and policy makers, emphasising the contribution that IP makes to economic growth and employment, as well as highlighting the harm done by counterfeiting. This demands that all of us, as brand professionals (and ambassadors for IP), invest time and resources in more economic research and analysis on the role of IP, and also reach out and communicate with all parts of society—not just those in the trademark bubble.
INTA has conducted several research studies that highlight the contribution of IP-intensive industries to gross domestic product (GDP) and employment in various countries, and will continue to substantiate the value of IP through these types of studies.
"The role of the trademark practitioner has evolved"
Consumers’ relationships with brands are constantly evolving, a trend largely driven by the spread of the Internet and social media and the rise of corporate social responsibility (CSR), with brands now intervening in the social ills affecting our lives, our communities, and our planet.
The 2018 Edelman Earned Brand report identified a big increase in belief-driven buyers — consumers who choose, switch, avoid, or boycott a brand based on its stand on societal issues. These belief-driven buyers now make up half of all consumers globally, and among them, 67% bought a brand for the first time because of its position on a societal issue, while 65% will not buy a brand because it stayed silent on an issue it had an obligation to address.
In response to such shifts, the role of trademark practitioners is also evolving. Practitioners are increasingly playing — or should be playing — a proactive role in advising on all aspects of the protection and promotion of brands, as well as championing the value of IP as critical assets. That includes issues such as registration and enforcement, of course, but also matters relating to advertising, regulation, public policy, and social media, among many others. With regard to CSR, trademark practitioners should be guiding businesses as they create socially responsible brands and play a key role in protecting the messaging built around these brands.
In short, the role of trademark practitioner has evolved into one of an all-round brand professional — a true business partner with IP expertise who can draw connections between the myriad issues facing brands in the marketplace. Quite truly, it’s expected of us to assume this role, and INTA seeks to provide brand professionals with the resources to achieve success in this transformation.
In this new role, brand professionals also have an opportunity to raise the profile of IP within their organisations, among senior management, and around the boardroom table. For brand professionals, this requires understanding and communicating the value of brands to companies. This is included in INTA’s 2018-2021 Strategic Plan as a key objective for the association, and INTA is working to provide its members with the tools they need to demonstrate the value of brands and how the work they do impacts brand value. Focusing on brands from a business perspective, INTA’s 2019 March Conference: The Business of Brands, taking place in New York City on 28-29 March 2019, will take a deep dive into the topic of brand value.
The impact of innovation and change
As also enshrined in INTA’s 2018-2021 Strategic Plan, the association is embracing innovation and change as a focus point for its activities over this four-year period. There is a clear relationship between brands and innovation: Brands drive innovation, and at the same time, it is critical that brands remain innovative in order to evolve, to thrive, and to maintain relevance in the marketplace. Consumers also drive innovation. Their needs are constantly evolving, and they have become accustomed to quickly embracing new technologies that are changing the way industries work, and the way products and services are consumed.
Brand professionals need to stay abreast of how innovation is affecting their brands and their work, and perhaps work on developing their change agility skills in order to effectively navigate changes brought about through innovation. Indeed, new technologies, like artificial intelligence (AI) and blockchain, are impacting IP — both in the marketplace and the practice.
As we’re seeing, it’s not only companies that are researching how their business processes and supply chains can be improved through these technologies. Law firms, IP offices, and the courts are also looking to a future where technologies such as AI can be deployed to automate processes and improve efficiencies. These innovations will no doubt bring about significant change, not only in the form of new business models, but changes in regulation, labour skills, etc.
INTA’s focus on innovation and change is recognition of these broader trends with the aim of being ahead of the curve, to help its members anticipate and, indeed, welcome change, rather than resist and even suffer from it. Through various educational endeavours, the association has been equipping brand owners and other industry participants to be cognizant of, and to address, technological advances and other changes.
Bringing this dialogue to the forefront, in late 2018, INTA introduced its Brand & New podcast series, which features engaging conversations with experts from around the world about the impact of innovation on IP and other aspects of business. Change will also be the central theme of INTA’s 2019 Europe Conference: Embracing Change, taking place in Paris, France, on 18-19 February 2019.
Entrepreneurs and SMEs: avoinding cataclysmic consequences
SMEs are the engines of economic growth around the world. Looking only at emerging economies, the World Bank estimates that “formal SMEs” (those operating legitimately) contribute close to 60% of total employment and as much as 40% of GDP. These numbers increase significantly when informal SMEs are included.
However, when business owners are focused on establishing and growing their brands, or when companies are growing rapidly or expanding into new markets, all too often, they overlook the need to register, protect, and manage their trademarks. This can result in cataclysmic consequences in some cases.
In alignment with INTA’s 2018‒2021 Strategic Plan, the association established a Presidential Task Force at the start of 2018 to examine potential opportunities and challenges in achieving IP protection that may be unique to SMEs and entrepreneurs, and further ascertain what additional resources and education are necessary to fill gaps. In 2019, the association will study the findings of the task force and will work toward identifying optimal ways to assist SMEs and entrepreneurs.
Notably, in August 2017, INTA launched its Pro Bono Trademark Clearinghouse. This clearinghouse is the only one currently in existence that is dedicated primarily to trademarks and is intended to serve SMEs, non-profits, and charitable organisations with low operating budgets which might otherwise not know where to turn or don’t have access to legal assistance in the area of trademarks. The association is currently running the clearinghouse as a pilot program in the United States, and plans to expand to other jurisdictions.
China Trademark Law reform
While many countries around the world are looking to establish or revamp their trademark laws, China stands out. Indeed, the single most important piece of proposed legislation that will impact brand owners and consumers in the next few years is the proposed fourth revision of the Chinese Trademark Law. Announced in April 2018, it is expected to come into effect between 2022 and 2025.
China is a vital market, with the country’s population at 1.38 billion and an estimated 8 million trademark applications expected to be filed in China in 2018. Moreover, Chinese entities are expanding worldwide: they account for 58.2% of global trademark filings, and the value of Chinese brands is growing.
The latest revision to China’s trademark law is likely to focus on issues including shortening trademark registration and opposition; emphasising trademark use; tackling trademark stockpiling and piggybacking; and post-registration opposition. In 2019, brand owners will have the opportunity to engage in the consultation and highlight the necessary changes such as strong provisions against bad-faith trademark registrations, stronger enforcement provisions, and setting the framework for higher quality examination and fair treatment of foreign trademark owners. Research, communication, and collaboration will be key to INTA’s important role in this process.
This article first appeared in World Trademark Review. For further information please visit www.WorldTrademarkReview.com.