Rebranding: Reasons, Examples and Legal Framework

Changeability is one of the governing characteristics of the contemporary world. Everything and everywhere is changing and transforming: information is updated regularly, thanks to the public availability and openness of information and the Internet, discoveries and achievements are made faster, people are constantly communicating and often change their preferences.

Today, consumers are faced with an abundance of homogenous products, and the entrepreneur has to constantly act and work on product characteristics in order to maintain interest in the product. In this regard, rebranding, which some firms do on a regular basis, becomes particularly important. It is worth noting that, although the brand is a set of intangible assets of the enterprise, for the purposes of this article we will talk about trademarks.

The main reason for rebranding is the desire to maintain or increase the level of consumer demand. Based on this, it is possible to identify the following set of premises, which indicate the need for change.

• A drop in demand for a product. Vedomosti published a great example of how a bad designation can become “ballast” for a business. For example, the article describes how entrepreneurs who owned a fleet of RVs used the Turnberry Holiday Park brand. Over time, the owners noticed a decline in visitors. A community survey found that: “...nearly a third of potential customers are unlikely to come to them because they believe Turnberry Holiday Park has something to do with the nearby Turnberry Golf Club, which Donald Trump bought in 2014.”  That is, it was not the quality of service or other characteristics that affected the decline in visitor numbers. It was the designation the entrepreneurs used that played a negative role. Thus, the need for rebranding to change this situation became apparent.
• Changing consumer preferences. Tracking the priorities and interests of the group of consumers for whom the manufacturer’s product is designed is the main condition for the successful sale of products. The product has to be transformed in accordance with changes in the preferences of potential buyers, including, when possible, its price, quality and designation. So, taking into account the period when the healthy lifestyle related hype for started, the Coca Cola Company not only registered in 1982 a new Diet Coke trademark, but also launched a new sugar free low-calorie product. It is worth noting that from 1886 until 1982 the company's trademark remained unchanged. 
• Cultural and political trends and movements. Because of the mass and extensive media coverage of various world events, the latter now quite often become the reason to change trademarks, which that companies could successfully use for a long time before. The most vivid example is the rebranding of products of a number of corporations in the aspect of the American movement in support of Black Lives Matter, the largest movement in U.S. history in support of African-American population. So, the Nestle company decided to rename the Redskins and "Chico candy, where the names use words that can cause discomfort among consumers. As they point out in the RBC publication, Redskins is a slang term that could offend the Native American people, and Chico, which means kid, humiliates the Latin Americans”. Likewise, PepsiCo decided to rename a line of breakfast products that used the Aunt Jemima designation, which is the name of a dark-skinned heroine from a famous American song. Additionally, in support of racial equality, Dreyer’s chose to change the name of its Eskimo Pie ice cream referring to the Eskimo people, an indigenous group inhabiting the Arctic regions from Greenland and Nunavut, Canada and Alaska, USA, to the eastern edge of Chukotka, Russia.

The above facts indicate that the prerequisites for rebranding may be different. But, in fact, they all lead to the same thing which is a trademark change. Let’s see how this process looks from a legal perspective.

So, the entrepreneur has decided to rebrand. To understand what legally significant actions are required to perform, the following questions should be answered.

1. Will the trademark become fundamentally new or the right holder wishes to change some elements of the designation?
2. Does the entrepreneur plan to use the mark for the same classes of goods and services or not?

If the right holder has decided to make partial changes to the trademark, in certain cases it is possible not to register the new trademark. It is allowed to make minor design changes to the registered visual identity, provided that these transformations do not affect the main elements of the trademark. And also allow to change the list of goods and services in the direction of reduction. A detailed description of the procedure for making such changes can be found here.

In the case where the manufacturer decides on the complete transformation of the trademark, regardless of whether it will use a certain identity for similar classes of the Nice Classification or not, the entrepreneur has to re-register the trademark.

To summarize the above, it should be noted that most global corporations, such as Coca Cola, Nestle, PepsiCo and others regularly rebrand products, which indicates the justification and paying back of such a corporate policy.