Do corporate trademark lawyers have a “cultural problem”? Debate rages on how commercially-minded counsel should be 26 Oct 16
Last week’s World Trademark Review event in New York, Managing the Trademark Asset Lifecycle 2016, spurred many debates throughout the day. Arguably the most passionate focused on the claim that there is a “cultural problem” among in-house legal departments, and the question of whether making money from trademarks should be front-of-mind for those working in the modern corporate IP environment.
Hosted last Thursday in New York, this was the second annual Managing the Trademark Asset Lifecycle event. It focused on a wide range of subjects, including trademark auditing, brand-backed lending, the tax treatment of brands, royalty strategies and capitalizing on the end of a brand lifecycle. These topics were discussed on expert panels featuring trademark counsel and brand experts from companies including BlackBerry, MasterCard, Time, Penthouse, Kate Spade & Company, Mars and Camuto Group.
On a day that often focused on ways to generate revenue from brand assets, it was the suggestion that corporate counsel should focus more on money-making that caused heated debate among participants. In the session on brand valuation, Brand Finance CEO David Haigh – who had expanded on the opportunities in valuing brand portfolios – commented bluntly that “there is a cultural problem with lawyers”.
He expanded: “A lot of lawyers think their role is primarily compliance, defence, and following rules – they don’t necessarily think of themselves as commercial revenue generators. Yet many of the more successful people who have created some of the most iconic brands started off with an IP background. Bill Gates’ father was a trademark lawyer and Richard Branson’s father was an IP barrister – and it is no coincidence that they were both savvy about how to make money out of these legal rights. So within a lot of organisations, there needs to be a shift to not just look at the marketing and finance people as the ones with commercial ends, but lawyers should be doing that too. In fact, they are probably in an even better position to do so, as they are more aware of the assets that are available. A cultural change needs to happen – but I often get a sense that lawyers aren’t engaged in that kind of commercial mindset.”
Haigh clarified that he was talking solely of internal counsel, adding that – on the contrary – private practice lawyers “tend to be more commercially-minded” because “they tend to make lots of money for giving smart advice”.
In partial agreement was Pamela Weinstock, vice president and associate general counsel at fashion house Kenneth Cole Productions. While on the face of it she was “all for a cultural change” in the corporate trademark environment, she warned that there are obstacles to achieving that: “A lot of it will depend on company culture. Some will see the trademark department as integrated into the revenue generating functions, and that can determine how a lawyer will be able to interact with such initiatives. That can be developed over time as internal relationships are built, but sometimes that isn’t possible. Ultimately, though, it would be great to move towards such a cultural shift.”
A debate soon followed about the suggestion that trademarks can be bought and sold in much the same way as patents, something that could facilitate a more commercial mindset amongst counsel. Attendees pointed out that there are services that conduct this kind of work, such as by event sponsor Metis Partners. Online trademark marketplaces have also been attempted, including the US Trademark Exchange and IPTrademarkMarket. But the sale of trademarks has arguably not gone mainstream in the way it has for patents. There are a number of reasons for this, including the use requirement in the US and a trepidation that a rival company could buy a trademark and use it “too well”, as Haigh suggested. But, as he added, “that means there are loads of valuable trademarks that just get left to lapse or fade into obscurity because of that fear”.
Ultimately, one step in the right direction was highlighted in the following session. Colm Dobbyn, group executive and associate general counsel at financial giant MasterCard, noted that commercial opportunities may be missed in some organisations because of a knowledge barrier between departments. “We talk a completely different language in IP to the finance departments,” he observed. “It is becoming more important because we are sitting on all these valuable patents and trademarks, but what are we doing to bring value to them? It’s become an increasing issue as I’ve become more senior, as I deal with executives and directors who often don’t know anything about IP but somehow think we can turn it into a fountain of money to bring in revenue. The answer, for me, has been trying to explain to them what IP we have, how it protects the business and what options there are to potentially translate it into market capital. But, of course, one of the most difficult jobs of an IP counsel is to place a value on the company’s brands and trademarks – turning trademarks into hard numbers.”
An increasingly commercialised trademark environment may be inevitable – especially with patent pioneer Erich Spangenberg, once dubbed the “most notorious patent troll in America”, telling us a few weeks back that he “sees an opportunity” in the trademark space. How that pans out remains to be seen, but trademark counsel should ensure they have close ties with the finance department – because there may be more collaboration with them in the future.
There will be more coverage of the highlights from Managing the Trademark Asset Lifecycle in the next issue of World Trademark Review, which hits desks later in the year.
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