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Articles

The legal protection of a brand

August 29,2019

A brand is a word familiar to everyone, but what do we really know about it? Brands surround us everywhere, even now, reading this article, you can notice them around: maybe there is an iPhone lying near you, there is a bottle of Coca-Cola or a monitor from Samsung in front of you.

In today's world, brands are among the most expensive and valuable assets of companies. After all, sometimes people are willing to pay a lot of money for clothes just for the sake of a desired logo on it, such as ordinary white t-shirts with a logo of Gucci or with the embroidery of the first name and the last name of the Russian designer Gosha Rubchinskiy. In 2019, the cost of the most expensive brand reached 205.5 billion US dollars. Do you guess what brand it is? It is Apple; it is namely the brand of the American company Apple Inc. that currently ranks the first in the top-10 rating of “the most expensive brands of the world 2019 according to Forbes.”[1]

#

Brand

Assessment

Revenue

1

Apple

205.5 billion US dollars

265.8 billion US dollars

2

Google

167.7 billion US dollars

136.2 billion US dollars

3

Microsoft

125.3 billion US dollars

110.2 billion US dollars

4

Amazon

97 billion US dollars

211.4 billion US dollars

5

Facebook

88.9 billion US dollars

48.8 billion US dollars

6

Coca-Cola

59.2 billion US dollars

23.8 billion US dollars

7

Samsung

53.1 billion US dollars

221.6 billion US dollars

8

Disney

52.2 billion US dollars

33.8 billion US dollars

9

Toyota

44.6 billion US dollars

190.8 billion US dollars

10

McDonald's

43.8 billion US dollars

96.1 billion US dollars

What is a brand needed for? Firstly, the brand individualizes the products in the market of a plurality of similar products and services. This is a sort of a mark of the seller, the manufacturer or other person in this chain. Using it, the buyer can easily find the products he has liked or, vice versa, avoid the one that has already disappointed him earlier. Secondly, the brand allows informing the consumers about the quality, the particular characteristics, the properties of the product that are inherent in this brand. Thirdly, it should be mentioned that one of the most valuable assets of any brand is its goodwill, in other words, its reputation, its good name. Over time, the brand acquires particular positive or negative properties in the eyes of the consumers. Thus, the consumer will sooner prefer the product of the brand that has already proven itself positively and the quality of its products. In addition, with the help of a competent marketing campaign, a special attitude towards the brand itself, its style, the associations with a particular class of the society, the customers’ statusness can be formed. I told about it in my last article about product placement, or the advertising organically integrated in films, animated cartoons, etc.

A brand concept can be considered with the framework of different fields: economic, juridical, sociological, etc. We shall go in more detail on a brand definition within the framework of economic and legal aspects.

  • A brand within the framework of an economic aspect means a mark, a logo, etc., which is capable of individualizing the products of a seller in the market, as well as a totality of his/its assets, value, popularity, which ensures maximum profit from its use.
  • A brand within the framework of a juridical or legal aspect: there is no a legal brand definition in the Russian legislation. Many countries around the world use the brand definition given by the American Marketing Association[2]: “a name, a term, a mark, a symbol or a design” or their combination intended to identify the products and services of one seller or a group of sellers and to distinguish them from the products of other sellers.” Nevertheless, as to the brand definition in the Russian legislation, it is possible to consider it relative to the nearest institutions – means of individualization.

The brand may be registered as a trademark, a commercial designation, a company name or a name of the place of origin of the product. However, the most preferred and popular in practice kind of the brand registration is its registration as a trademark. This is due to several reasons:

  1. The nearest to the brand by the definition is the trademark, which means according to Article 1477 of the Civil Code of the Russian Federation, “a designation serving for the individualization of the products of legal entities or individual entrepreneurs”;
  2. This preserves an independent circulability in contrast to the company name, where the disposal of the exclusive right shall not be allowed by virtue of the Civil Code of the Russian Federation, and the commercial designation, where the brand is bound to the enterprise. This in turn increases a market value of the brand-trademark in the market;
  3. There is a direct connection of the brand with the product in contrast to the company name, when, for example, company A can manufacture the products under designation B;
  4. This allows protecting the right holder of the brand-trademark from the registration of an identical or similar trademark in respect of the same classes of the products and/or services, and if the trademark is well-known, then in respect of all classes;
  5. The registered trademark does not require proving the exclusive rights to it in contrast to the commercial designation (in case of a violation of the rights, it will be necessary to prove the fact that it is well-known on a particular territory).

However, not every trademark can be a brand. A brand is the trademark that has acquired particular awareness and reputation in the market, i.e. well-known trademarks are definitely referred to brands.

So, the trademark must undergo through several steps in order to become the brand:

  1. The first step will be a registration of the future brand as a trademark in order to fix a desired designation.
  2. The second step will be an active promotion of one’s brand in the market. However, the promotion of one’s products under a particular brand can begin before its official registration as well. Thus, the first and the second steps can take place in parallel with each other.
  3. At the last third step, the trademark is transformed into the brand itself, which has a particular image in the minds of the consumers, a totality of its inherent properties and characteristics, and recognizability.

The brand registration allows defending your rights from the illegal use of your designation, as well as preserving its value and reputation. Indeed, with the growth of the popularity of the unregistered designation, there is a high probability that the unfair sellers may take advantage of someone else's designation and place it on the own products, which may turn out to be less qualitative than the original one. As a result, the bona fide seller of the original products will lose confidence of the deceived customers and spoil the reputation of his/its product.

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