Building, marketing and maintaining a strong brand is fundamental to ensuring the success of a new company. Not only will a strong brand confer a competitive advantage through encouraging brand loyalty, but it will have financial value and help to attract investors.
Here is general guidance on building, marketing and maintaining your brand while protecting your intellectual property and complying with applicable regulations in the process. This article considers in particular the rules applicable to non-broadcast advertising, including online marketing.
Building a Brand
What can and can’t be protected?
Once in the public domain, a concept or idea cannot be protected by intellectual property rights. Developing a strong brand is therefore imperative to ensure that customers associate your company with the concept or idea behind your business.
Protecting the trade marks that form your brand (for example, logos, names of products and slogans) is central to creating a strong brand. Using a trade mark distinguishes your goods or services from those of others, indicating the goodwill and reputation of your company. Registering a trade mark confers an exclusive right to use the trade mark in connection with the goods and services for which it is registered.
Before making any decisions on branding, it is important to conduct a clearance search to ensure that your chosen trade marks will not violate another business’s trade mark rights. This can save you time and money in the long run, and avoids unwelcome re-branding further down the line in the event that prior trade mark rights prevent the use/registration of the trade marks that comprise your brand.
See Protecting your Intellectual Property in the UK for more information about clearance searches and how to register trade marks.
Marketing your Brand
Protection of marketing materials and agreements with those developing them
In addition to the protection conferred by trade marks that may feature on marketing materials, the materials themselves, for example a photographic advertisement, may be protected by copyright. Since there is no register of copyright works outside the US, it is essential to keep records detailing when the work was created and by whom.
Rights to intellectual property can be acquired and lost under commercial contracts. It is important that if you are commissioning another party (such as a graphic designer or an advertising agency) to develop marketing materials, you consider the following:
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Be explicit as to who owns the intellectual property rights in the work product being created. Whilst the default position with employees creating copyright is that the employer owns the work (subject to agreement to the contrary), this is not the position with contractors who, subject to contrary agreement, will own the copyright even though another is paying them for this work. It is therefore vital to ensure the contractor assigns to you all present and future works created on your behalf.
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Ensure the contractor warrants that the work product is original and does not infringe the intellectual property rights of third parties, and include an indemnity to ensure that you are compensated for any losses incurred if that warranty is breached.
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Ensure you clearly define the extent of any licence to use your intellectual property, for example, limiting use to the preparation of the work product in question.
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Ensure that the contractor is contractually required to comply with advertising regulations (details of which are set out in further detail below).
How is advertising regulated in the UK?
Self-regulation is very important in the UK, and businesses are expected to adhere to the Committee of Advertising Practice (“CAP”) and Broadcast Committee of Advertising Practice (“BCAP”) guidelines for non-broadcast advertising (the “CAP Code”) and broadcast advertising (the “BCAP Code”) respectively. The Advertising Standards Agency (“ASA”) enforces compliance.
The ASA actively monitors online methods such as marketing communications on businesses’ own websites, paid-for online ads, marketing communications on social media and paid-for entries in search engine results. Although the ASA cannot levy fines, it can require businesses to withdraw advertisements and makes public its decisions, commonly leading to adverse publicity.
Requirements
The CAP Code states that advertising should:
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Be legal, decent, honest and truthful
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Be prepared with a sense of responsibility to consumers and society
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Respect the principles of fair competition generally accepted in business
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Not mislead by inaccuracy, ambiguity, exaggeration or otherwise. You should ensure that you hold documentary evidence to substantiate any claims made in marketing materials.
Similarly, the Consumer Protection from Unfair Trading Regulations 2008 requires that advertisements must be clearly identifiable as such. You should also be aware that if you are marketing online, or via electronic communications, you are required to provide certain identifying and contact information under the Electronic Commerce (EC Directive) Regulations 2002 (available here).
Specific products, for example financial, pharmaceutical, alcohol and health products are subject to additional regulation. Certain methods of advertising, for example, comparative advertising and price advertising, are also subject to additional regulation.
For basic information regarding these requirements, the CAP offers a free of charge copy advice service (available here).
Online Marketing
There are significant benefits to online marketing campaigns, including flexibility, cost, control and the ability to offer highly targeted marketing. However, online marketing involves greater legal nuance than offline, and you will need to be attuned to the risks associated with the following:
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Social media
The use of individuals to promote your products and services through social media requires you to exercise caution that a false impression is not created that the individual is a consumer when, in fact, they are being engaged for promotional purposes. Promotions should be clearly identified and labelled as such and it is recommended that the hashtags #ad or #spon are used. You should also ensure you comply with the terms and conditions of social media platforms, which commonly prohibit promotions on personal profiles or pages.
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Online behavioural advertising
Online behavioural advertising involves profiling an internet user through the use of cookies in order to make targeted advertisements towards the user. Many critics of this form of advertising view it as invasive of privacy. If you decide to use this form of advertising, you will need to ensure that users have been given clear and comprehensive information about the purpose of the cookies, and offered an opt-out from the use of cookies.
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Viral marketing
Viral marketing depends on an advertiser asking recipients of a marketing communication to pass it on to others, or provide contact details of others (commonly in return for an incentive). Caution should be exercised to ensure that the communication can clearly be identified as originating from the advertiser, not the recipient. This form of marketing also raises privacy concerns, so any communication should make clear that the communication should only be provided to others who would be willing to receive it. Further, if you receive contact details of others, be aware that you may be processing personal data and may therefore need to comply with data protection obligations (more information on which can be found our Guide to Data Protection in the EU).
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Global reach
The global reach of material placed online means that advertisements may be subject to various regulatory regimes. It is therefore recommended that you take local advice in countries where advertising is targeted, make clear the jurisdictions targeted and comply with international advertising guidelines, such as that of the International Chamber of Commerce (available here).
Maintaining your Brand
Being prepared to enforce your intellectual property rights is central to protecting, and maintaining the value of, your brand. If you discover that somebody is using an element of your brand, such as a trade mark or copyrighted marketing material, it is important to speak to a lawyer as soon as possible so that action can be taken swiftly to minimise damage to your brand.
In many cases, the sending of a “cease and desist” letter may be enough to persuade an infringer to cease infringing your rights. In other cases, proceedings may need to be brought. Many young companies opt to bring proceedings in the Intellectual Property and Enterprise Court (“IPEC”), which offers a more accessible route for small and medium sized enterprises than the High Court, with a streamlined procedure keeping costs down and with recoverable costs limited to £50,000 and a maximum damages claim of £500,000. It is important to note that failure to enforce your intellectual property rights may weaken your ability to enforce them in the future against the same party and other third parties.
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