The CFO: Your Trade Mark Window to the Company

It's time for my periodic rumination about IP obsession No. 1--how does IP get handled within an organization? Let's focus on trade marks. Let's get behind matters such as multiclass applications, relative and absolute grounds of objection, likelihood of confusion, intent to use, quality control, and oppositions and cancellations -- not that these considerations are unimportant. To the contrary, they are the bread and butter of my day-by-day trade mark practice. But lurking behind these building block aspects of trade mark law is the question of what happens to trade marks within the organizational context of the commercial world.

After all, unlike patents and copyright, both of which can be viewed as acts of intellectual creation that enjoy a legal half-life even if they are never translated into commercial exploitation, trade marks are a form of legal right that is solely the creature of commerce. Trade mark rights emerged because, 200 years ago, merchants came to realize that there was commercial value in obtaining an exclusive right in one's product name. Since then, trade marks have been intertwined with the manner by which business is conducted.

These observations are fine, but they are stuck at a macro level. To say that trade marks are part and parcel of commercial life does really explain how trade marks are dealt with within the orgaization. To answer that micro-level question, we need to delve into the way that commercial organizataions are organized and managed. Let's focus on the threshold question: who is likely to be responsible for trade marks within an organization. Let's refine the question even further. In the start-up, hi-tech world, who is handling trade marks in such companies?

My initial sense was that the answer is obvious. Trade marks will be the managerial purview of a marketing person (we assume that the company does not have a legal department). After all, trade marks are ultimately a form of commercial communication. Who better, therefore, to deal with the legal aspects of a trade mark than the person charged with marketing?

The only problem here is this: I was wrong. Time after time, upon receiving instructions to handle a trade mark application for such a company, I find myself not dealing with a marketing person but rather the CFO ("chief financial officer") or his equivalent. And so the question--why? Why the disjunction between the job category that seems most appopriate to be responsible for trade marks, namely the marketing person, and the fact that responsiblity for trade marks is usually lodged in the financial wing of the company?


It seems to me that the answer can be found in the observation that, for such companies, trade marks are viewed simply as another expense item rather than as an intangible asset redounding to the potential long term benefit of the company. Trade mark registration is not seen as a process in the srevice of this long-term goal, replete with possible uncertainties about about the ultimate success and short-term cost of the process. Rather, it is seen a simple act of recordal, at worst no more complex than the registration of a company name. As such, the expenses connected with the registation should be readily determinable (and modest) rather than being subject to uncertainty and ultimately dependent upon the potential complexity of the registration process.

Once the trade mark registation process is viewed as a curent expense rather than a potentially valuable asset, additional implications follow:

1. Primary attention will be on consummating what are viewed as the mechanics of registration. Little or no attention is given to issues such as the circumstances by which the trade mark is used, brand equity or how how enforcement works.

2. There is no budgetary appetite for trade mark clearance and little budgetary appetite for funding trade mark prosecution.

3. There is little or no strategic thinking about how trade marks fit within the organization.

Don't get me wrong--trade marks may justifiably viewed as of minor importance, especially if the company's goal is to sell its technology rather than to establish a continuing commercial presence in the marketplace. Under such a view, the rationale for lodging responsibility for the organization's trade marks to the CFO makes more sense. Whether or not this is the case, however, the underlying fact is that the trade mark practitioner will likely find himself working with the company's CFO or the like with respect to trade mark matters. It is essential to get one's arms around the implications of this fact in trying to usefully provide trade mark services.

Brands, Micro-Trends, Status and Online Communities

This Kat has been away from his domestic lair, attending to several personal matters where even his beloved IP became momentarily of minor importance. On his way home he had the opportunity to get caught up in some reading. One article in the 4 December issue of The Economist, in the Schumpeter column ("The Status Seekers: consumers are finding new ways to flaunt their status") particularly caught his eye. Upon reading the piece, once again, he came away wondering how much of branding is professional applied social science, how much is marketing art, and how much is, well let's say, pie-in-the-sky pronouncements.

The occasion was a summary of research produced by an outfit named "trendwatcher.com", which is described as a consultancy that peers over voluminous data provided by 700 trend-watchers in more than 120 countries in order to discern micro-size consumer trends. In that connection, the article summarizes a report about the changing manners by which consumers seek to flaunt their status, where micro-trends meet brands. The starting point seems to be that if, 50 years ago, "keeping up with the Jones" was all the rage, in today's more affluent world, people "increasingly seek to advertise their hipness or virtue instead." Some of the examples given are the following:

1. Instead of seeking one's next piece of clothing from a known European fashion house, people search out exotic designs in a Brazilian favela or South African township.

2. A Swedish manufacturer named Bike by Me allows its customers to customize every part of their bicycles.

3. A German fashion house, called Trikoton enables its customers to convert their speech patterns into knitting patterns, thereby enabling the piece of clothing to reflect their respective voice patterns.

4. To snag customers, Tiger Beer provides loyal customers with access to events, while Dunhill promotes a 1930s exotic style (whatever that exactly means within the context of the Great Depression), e.g., eagle-hunting in Mongolia.

5. To enable persons to flaunt the fact that they really care, the Toyota Prius hybrid car makes it clear that is green-friendly, Bed Stu manufactures shoes that appear to have the look of being covered with oil from the Gulf spill, and Mango Radios make a product that is hand-made in an Indonesian village that uses sustainable materials.

6. The Triscuit cracker product of Kraft Foods carried out a promotion whereby it distributed four million packets with basil and dill seeds plus accompanying gardening instructions; a Sheraton hotel in Vietnam has set up a cooking school for its guests, while the Sorrento Hotel in Seattle sponsors a night school for guests at which the latest hit book is discussed. 

Upon reflection, there does not really seem to be much that is novel in substance in of any of these identified micro-trends. Radical chic has been around since the 1960s, customizing products to reflect one's personality has only been limited by the technological means to do, the link between brands and being green is, frankly, all over the place, and a how-to-do manual as an extension of a product line has been around as long as I can remember. What is new, it seems, is the platform, namely the internet, in general, and social networking, in particular (just look at who was named this year's Time magazine "person of the year") .

In particular, reference is made to a data point offered by the PR giant--Edelman, which claims that 82% of Generation Y are members of a brand-sponsored online community. I must confess that I lack hands-on experience here. At my stage of life, I am lucky to be a member of Generation ZZ, and I am not a member of any brand-sponsored online community. But after reading this piece, from the IP point of view, there are least two reasons to become more engaged in this platform.

First, from the trade mark registration vantage, it may be asked whether we should be adding class 41 (or the like) to any application, where the client is already operating, or is considering to operate, such an online site. I would think that we want to make sure there is no possibility that your client's mark can be hijacked for use by a renegade online community.

Second, we need to become more familiar with the manner in which the client's marks are being used within the context of these sites. While there is nothing new with a company sponsoring a platform for the promotion of its products or services, the online community poses a particular challenge. How does one ensure that the site does not result in doing harm to the mark and the brand that it identifies, while at the same time allowing its members the freedom to express themselves and thereby, it is hoped, to create a lasting bond between the person and the brand?

True, this has been a challenge ever since the internet allowed interactivity, but the particular focus of an interactive brand-sponsored online community seems to raise the trade mark stakes in such a situation. We in the trade mark community will have to adjust accordingly.

More on Generation Y here.

What's Behind the Shuffle in the Indian Trade Mark Office?

Trade mark admiministration is not usually the purview of high political intrigue. I guess the last time that I thought about Len Deighton (of The Ipcress File fame) and trade mark offices in the same breadth was in connection with the establishment of the OHIM office in Alicante. Thanks to IPKat's Indian colleagues--Raja Selvam of Selvan and Selvam of Chennai, and Shamnad Basheer, of the iconic Spicy IP Blog and the National University of Juridical Sciences in Kolkata--our attention has been drawn to an interesting administrative development, with possible political overtones, regarding the reassignment of the trade mark section of the Indian Intellectual Property office.

As reported in the June 3 post by C.H. Unnikrishnan, "Trademarks Section to Move Out of IP office", on livemint.com here and the June 4 blog post by Shamnad Basheer, "The Fishy Trademark Handover" here, there is a move afoot to shift the trade mark section of the Indian IP office out the control of the Controller General of Patents, Designs and Trade Marks to another governmental officer. According to these accounts, the Indian Department of Industrial Policy and Promotion (DIPP), which oversees the Indian IP office, has already shifted some of the powers of the Controller General of Patents, Designs and Trade Marks to another government official.

The motivation for the move, at least in some quarters, is being attributed to political more than adminisitrative efficiency considerations. Thus, Unnikrishnan writes:

"In January 2009, the government appointed P.H. Kurian to the top post of the IP office, the controller general. He has since tried to reform the way the office works and, in an attempt to cleanse the system of corrupt practices, transferred at least a dozen senior officials, mostly from the trade mark section, to other posts."

Against this backdrop, several persons connected to trade mark practice in India have been more outspoken in their criticism. According to one, trade mark officials involved in alleged acts of bribery in the past will now find their way "back to their earlier locations." Another observed that "[t]he administrative shuffle is quite vindicative to the strong reforms that the controller general has inititated in the last one and one-half years, and it will shift the system back to its inefficient past."

There is, however, a less conspiratorial view of these recent moves. V. Bhaskar, the joint secretary of the DIPP, notes that separating patents from trade marks may allow for better administrative focus of the two areas. Basheer is quoted in the Unnikrishnan article as suggesting that

"[g]iven the increasing complexity of these regimes, it may be desirable to have two heads in this regard."

However, he did go on to note that, under the current Indian trade mark law, the government may appoint a person to discharge some of the functions of the controller general, but it is the controller general who remains in charge. As a legal matter, therefore, the contemplated change would require an amendment to the current Indian trade mark law.

Commenting on his blogpost on the issue, Basheer summarized it as follows:

"I really think that the government should think through the intended structure a bit more before it takes a final view of the matter. Perhaps it should also have consultations with IP stakeholders before it takes a final position here. I think that there is some sense in the recommendation ... that we have an overall head and then specific technical heads for patents and trade marks."

It is no secret: this Kat has a particular interest in IP activities in India. I especially like the energy and openess of the discourse on IP matters there, both in writing and in conversation. The interweaving of administrative, political and professional considerations in the current matter is a good example of what I find so fascinating.

More on Len Deighton here.