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|There’s a new trend in trademarks: the rise in brands with purpose. These brands have a message about why a consumer might want to purchase above and beyond quality, functionality or price. They tell us something about the values of the organisation selling the product, and give consumers a chance to support political, social or environmental causes that align with their own personal values. While this trend is driven by demographic and political shifts in the consumer market, brands with purpose raise unique trademark issues and require a carefully crafted trademark strategy.|
Brands are the means by which companies communicate with their consumers. They are a repository of information about a product or service, and the vessel for the reputation (or goodwill) of that brand. Marketers focus on encapsulating "brand values" – those emotions, qualities or images that the brand represents, as purchasing decisions are strongly driven by actual or aspirational values perceived in a product or service. Brand values are woven into all of a brand's interaction with consumers, while trademarks have the primary function of allowing consumers to perceive the trade origin of a product or service.
In recent years, we have seen a rise in brands with purpose, trademarks with a message about why a consumer might want to purchase above and beyond quality, functionality or price. An example is Danone's brand One Planet. One Health. Its vision is that the health of people and the planet are interconnected. Emmanuel Faber, Danone's chairman and CEO, said: "It is a call to action for all consumers and everyone who has a stake in food to join the food revolution: a movement aimed at nurturing the adoption of healthier, more sustainable eating and drinking habits."
What are these purpose-led brands, and why are they so popular?
Brands with purpose
A brand with purpose is one that has an overarching social, environmental or charitable aim as part of its value. These brands tell us something about the values of the organisation, and give consumers a chance to support political, social or environmental causes that align with their own personal values. It can be an umbrella corporate social responsibility (CSR) programme, a product name, or relate to the way a product or service is sourced, produced, sold or ends its life. It could indicate that the company behind the brand operates in a particular way, or donates time or resource to different causes.
The trend appears to have started in the consumer goods space, but is moving to other industries where consumer perception is important, for example, industrial and manufacturing, transport and energy. It also encompasses not just sustainability programmes or charitable initiatives, but also products and services that provide some environmental, social or other value.
For example, Vodafone's M-Pesa branded service provides access to financial services to the millions of people who have a mobile phone, but no or limited access to a bank account. It is a safe, secure and affordable way to send and receive money, top up airtime, make bill payments, receive salaries, get short-term loans and much more. The service has 30 million users in 10 countries. 'M-Pesa' is registered as a trademark in many countries.
Why are companies investing in brands with purpose?
Purpose-led brands are on the rise in response to demographic changes. Millennials, born in the early 1980s to the mid-1990s, make up a quarter of the world's population, and recently overtook the baby boomers as the largest generation in the US. It is forecast that the global spending power of millennials will soon be greater than that of any other generation. Generation Z, born between 1995 and the early 2000s, is set to be an even larger cohort. Together, they are a formidable market force, shaping economies with their purchasing decisions.
Brands with purpose that are original, or contain some slightly surprising or clever wording, or that include a house brand, are most likely to be registerable
Millennials and Gen Z have clear preferences for where they spend their money. An Accenture study found that 66% of consumers in the UK want greater transparency on how companies source their products, ensure safe working conditions and their stance on important issues such as animal testing.
Leading brands are alive to this demographic shift. For example, Unilever's Sustainable Living Plan was launched in 2010, and has the overarching goal to decouple the growth of the business from its environmental footprint, while increasing Unilever's positive social impact. The focus is on three big goals: improving health and wellbeing for more than one billion people; reducing environmental impact by half; and enhancing the livelihood of millions. This plan is core to Unilever's business, and Unilever is also engaged with the UN Sustainable Development Goals. And it is working. Unilever recently announced that its 28 sustainable living brands grew 69% faster than the rest of its business, and delivered 75% of its overall growth in 2018. Unilever has also obtained trademark protection for branding associated with its Sustainable Living Plan.
Brands with purpose and trademarks
Many purpose-led brands will also be registered as trademarks, and they raise specific trademark issues that need careful thought, both legally and practically. Trademark law itself is also changing and adapting to new ways in which consumers interact with brands, particularly in relation to non-traditional marks and how we engage with technology.
First of all, there is a question of the function that these brands perform as a trademark. Traditionally, the function of a trademark was to guarantee the origin (and therefore quality) of a product or service, to protect consumers from confusion. More recently, case law has recognised that there are other functions of a mark, such as advertising and investment functions. But what function do these brands with purpose have? It's possible that the "cachet" that such brands provide is part of both the investment and advertising functions, rather than strictly the origin function. Indeed, it may not be clear whether they are used in a trademark sense at all. The CSR programme of a company may inform consumers' purchasing decisions, but does it distinguish the goods and services of one undertaking from another?
There is also the fundamental question of whether the brand is able to be registered as a trademark. It must not be descriptive or non-distinctive. If the brand is designed to communicate clearly with consumers about the aims involved, it has the potential to be descriptive. In many jurisdictions, slogans (that is, promotional or advertising phrases) are either not registerable, or only available for registration on supplemental registers.
In the EU, while there is no bar on slogans per se, they must meet the threshold of distinctiveness. The case law is focussed on promotional statements about the quality of goods and services, or inducements to purchase goods and services, which is not quite the same as the purpose-led brand, which instead communicates about the values of a particular organisation, or its charitable, social or environmental goals, but is of direct applicability to this situation.
In the Blackrock v OHIM case (2015), dealing with the eligibility of the sign 'Investing For A New World' for registration as an EU trademark, the EU General Court noted that "since the relevant consumer is not very attentive if a sign does not indicate to him the origin or intended use of that which he wishes to purchase, but just gives him purely promotional, abstract information, he will not take the time either to enquire into the various possible functions of the expression in question or mentally to register it as a trademark", and found the mark was non-distinctive.
The Audi v OHIM case (2010), relating to the mark 'Vorsprung Durch Technik', held that for a slogan mark to be registerable, it must "not merely [be] an ordinary advertising message, but possess a certain originality or resonance, requiring at least some interpretation by the relevant public, or setting off a cognitive process in the minds of that public".
Brands, and trademarks, can also function as marketing claims, telling consumers something about the product or service they are buying
Brands with purpose that are original, or contain some slightly surprising or clever wording, or include a house brand, are most likely to be registerable. Other registration strategies include a distinctive logo or stylisation, although this can affect the scope of protection for the word elements.
In seeking to register a brand as a trademark, you must select the relevant goods and services. This is key as it defines the scope of protection of the mark, which is typically limited to identical or confusingly similar goods. But what are the relevant goods and services? Are the aims of the brand clearly charitable, or does it involve the donation of time or money? If yes, perhaps class 36 for "charitable fundraising" is appropriate. If the brand is aligned to a method of manufacturing, or environmental impact reduction, or use of innovation to deliver the relevant purpose, then class 42 comes into play, for example, "industrial or technological research and design services". Of course, companies may also wish to include products or services relating to their core business. The selection of classes and goods and services will have an impact both on the ability to prove genuine use of a mark, as well as in relation to its enforceability.
GE's Healthymagination brand represents GE's commitment to invest in innovations that bring better health to more people, using innovative technologies for healthcare providers to help them increase affordability and deliver better care to more people. GE has registered this brand as a trademark in many countries around the world, in a range of classes relating to medicine, hospitals and water treatment, including but not limited to classes 1, 5, 7, 9, 10, 11, 37, 40 and 42.
Brands, and trademarks, can also function as marketing claims, telling consumers something about the product or service they are buying. If those claims are not supportable by evidence, then in some cases they could be prevented by consumer protection or advertising laws. If a brand with purpose claims something about the ingredients, production method or impact of a company's work, those claims should be able to be substantiated. Although not often invoked, there is also an absolute bar on the registration of trademarks that are "likely to deceive". This has generally related to applications to register geographic-type names (where a consumer would expect a product to have originated in that place) or to signs that are deceptive about the ingredients of a product, by reference to the applied-for goods. It is, however, potentially wide enough to catch, for example, brands that lead consumers to think that a product or service has a particular environmental impact or ingredient when by its nature it doesn't.
Owners need to also consider the enforceability of such marks, and in particular whether it is aligned with their brand values to prevent competitors or others from also operating similar programmes under a similar name.
Finally, there will come a point at which brand owners need to prove genuine use of the mark on the applied-for goods, either as part of the registration process in some countries or to defend against a non-use challenge. For brands that are not used directly in connection with the sale of goods or provision of services, this may be challenging. The EUIPO Guidelines on Proof of Use confirm that evidence of use must "establish a clear link between the use of the mark and the relevant goods and services". While for non-profit organisations, the fact that there is no profit motive behind the use is irrelevant, businesses will need to show that the brand is connected to the sale of goods or services.
Trademark strategies for brands with purpose
Brands with purpose are on the rise because they offer a competitive advantage, and enable companies to communicate more broadly with consumers about their overarching brand values. They are a differentiator in a mature brand market. Purpose-led branding is a conversation with consumers, a two-way street, and consumers will not only make purchasing decisions based on these brands, but also boycott brands that don't align with their brand values.
Brands with purpose are, in their purest form, a repository for the reputation of a company. That reputation is precious and can be easily damaged. Brands will need to be open, honest and transparent in relation to their values or risk a negative backlash. They shouldn't overstate or overpromise. They need to balance the desire for a descriptive brand that communicates very directly, with a more distinctive brand that can be protected as a trademark. Think carefully about the benefits of obtaining trademark registration for these brands, as enforcement action may not be in keeping with charitable or social goals of the company. While brands with purpose can be hugely beneficial to companies, as well as to society, they can also present a risk if the brand owner is unable to live up to its stated values.
||Jessica Le Gros|
Jessica Le Gros is a partner at Baker McKenzie in London.