A brand is a name, term, sign, symbol
or design, or a combination of these, which is intended
to identify the goods or services of one seller or group
of sellers, and to differentiate them from competitors.
A trademark is a brand or part of a brand
that is given legal protection because it is capable of
A trademark serves the following purposes:
- It indicates the origin of a product
- It is the customer's guarantee of quality
- It enables the manufacturer to promote a product without
fear of having the innovation duplicated by a competitor
Selecting brands and establishing brand policy
are important aspects of export marketing. In terms of the
latter, the exporter will have to decide how to protect
the company's brands and whether this protection should
be national (i.e. within a specific country only) or international
(i.e. worldwide). The effects that cultural differences
may have on the use of a brand in a particular market should
also be determined.
The protection of brand names is complicated
by the many difficulties experienced in registering trademarks
in certain countries and by the prevalence of brand imitation
and brand piracy.
There are two different systems for the national
protection of trademarks:
- "Priority registration", whereby the first
to register a trademark within a particular country retains
the exclusive use of it in that country. This system is
used in code law countries such as France.
- "Priority in use" whereby evidence of sales
having been made within the country concerned, is required.
Common law countries, such as the UK and the USA, require
priority in use.
In the first system, use generally follows
registration while in the second system, registration follows
use. In some countries, registration is renewable at certain
intervals for a fee. Consequently, the costs involved in
protecting trademarks can be substantial.
Attempts have also been made to provide international
protection of trademarks. The Arrangement of Madrid is an
agreement whereby a trademark registered in one subscribing
country in the name of a locally domiciled organisation
is automatically registered in all other subscribing countries,
provided it qualifies for registration in these countries.
It should be noted that very few countries subscribe to
A trademark is a sign that serves to distinguish
goods or services of one enterprise from another. This sign
may consist of one or more distinctive words, letters, names,
numerals, figures, or colours. To ensure that the distinction
remains, most countries have introduced laws to protect
trademarks. The WTO realised that the development of world
trade can be adversely affected if standards adopted by
countries to protect intellectual property rights vary from
country to county. For this reason the agreement on Trade-Related
Intellectual Property Rights (TRIPS) was negotiated and
accepted by all WTO members.
In some markets of the world, there is a tendency
for local manufacturers to take advantage of the promotional
expenditure and reputation of an international supplier.
They do this by producing similar products under the same
or a very similar brand name. Often similar packaging and
labelling is used as well. The intention is to persuade
customers that they are getting the international product.
Brand imitation is particularly rife in the fashion (e.g.
watch) and drug industries.
Although imitation may be the sincerest form
of flattery, the compliment has little appeal when it means
lost sales! One of the agreements reached at the Uruguay
Round of GATT talks was that governments will now restrict
the trade in counterfeit goods, thus protecting legitimate
A 'brand pirate' deliberately registers brand
names with the intention of selling them back at a profit
to the companies in which they originated when these companies
eventually wish to enter the market.
Should a company refuse to pay the price asked,
it will either have to register and establish another brand,
or find another market. In markets where brand name registration
is uncomplicated and relatively inexpensive, individuals
have been known to make a living from this practice!
Brands and cultural differences
A particular brand name may not be pronounceable
in the local language of the foreign market. Usually, the
longer the name, the less suitable it is for translation
into other languages. In addition, the brand name could
be found to have an undesirable or obscene connotation in
the foreign language. Although this may be solved by making
a small change in spelling, in most cases, a new brand name
needs to be found.
Once it has been decided to protect a particular
brand, the countries in which the exporter will register
the appropriate trademark must be identified. Although it
may be tempting to register a particular trademark in all
countries, the expense involved will be a strong deterrent.
It would be foolish, however, not to register it in those
markets targeted for future export sales. In terms of other
countries, the following factors should be considered:
- Market potential
- The ease and cost of registration, including legal costs
- The expense and inconvenience of selecting a new brand
name in the event of brand piracy or brand imitation
- The relationship between the brand name and product
sales - the brand name may be vital in this regard
- The importance and cost savings attached to establishing
a single international brand name
" For an excellent source on trade marks, click here http://www.ggmark.com/