Adam Houldsworth

Every Tuesday and Friday World Trademark Review presents a round-up of news, developments and insights from across the trademark sphere. In today’s edition, we look at the upswing in China's overseas IP revenues, the latest in the long-running Havana Club dispute, the US politicians calling on ICANN to introduce tighter gTLD regulations and a software company's angry response to so-called trademark trolls. Coverage this time from Trevor Little (TL), Tim Lince (TJL), Adam Houldsworth (AH) and Timothy Au (TA).

Brand radar:

Cultural strategy crucial for brand development, but don’t stray too far from your roots – To be successful, brands must “understand and embrace” consumer culture, argues Emmanuel Probst in Branding Strategy Insider. In many respects, the notion that – rather than depending solely on advertising and media campaigns – companies should develop a broader cultural strategy, embedding their brands into the culture of their customers and adapting their brand as culture shifts over time is common sense. However, as Probst notes – sometimes the shift can go awry and staying true to your legacy is the key to success. Using the example of Lego, he notes that a move to bigger bricks previously led to a fall in sales. When the brand re-pivoted and focused on the development of jointly-branded properties based on traditional mini-figures, the turnaround was instant. While there are obviously more factors behind its success than mere size, a focus on its legacy helped propel it to the top of the ‘world’s most powerful brands’ list. And now, as they say, everything is awesome. (AH)

Innovation stalls, leading to fall in new brands on UK shelves – According to a study conducted by IRI into the state of new product development (NPD), the number of new branded grocery items in the United Kingdom decreased by 8.4% over the last year. This figure represents a reduction of £99.6m in value sales for retailers. The trend continues a decline that commenced in 2013, with Tim Eales, UK director of strategic insight at IRI noting that manufacturers are taking a more risk-averse approach to new product development. He concludes that “manufacturers are caught in a downward spiral out of which it is becoming harder to climb”, with the inward focus intensifying competition from discounting stores (as specific branded products are one of the driving forces keeping customers going to the major supermarkets”). (TL)

Prada profits plummet as brand revamp continues – Italian luxury brand Prada has announced a drop in its half-year profits, despite earlier expectations of improvements to its bottom line. Hit by stagnating sales in recent years, the fashion house is seeking to reinvigorate its business through more effective digital marketing, revamped products and changes to its retail network. Despite this, its net profits decreased from 141.9 million euros in the first half of 2016 to 115.7 million euros in the opening months of this year. By contrast, The Fashion Law blog notes that the takings of rival Gucci shot up by almost 50% in the first quarter of 2017. The results demonstrate the tangible impact that brand revamps and repositioning can have on the bottom line. In the fashion world, brand affinity is everything and Patrizio Bertelli, Prada CEO, is betting on reputation and identity seeing it through this process, noting: “We have to make choices in the pursuit of growth that privilege the preservation of the cultural and stylistic fundamentals that our brand identity is based on.” (AH)

Upswing in China’s overseas IP revenues – There has been a sharp increase in payments received for the use of Chinese intellectual property, China Daily reports. An almost 500% rise in the first seven months of 2017 has occurred against a larger backdrop of growing service sector exports from the country, especially in the culture and entertainment spheres. Earlier this year we presented analysis of Brand Finance’s Global 500 report, which evidenced the soaring value of Chinese brands. With more and more Chinese companies building brands that are gaining traction outside the country, expect this trend to continue. (AH)  

Legal radar:

New African regulatory body to tackle fake medicines – An African Medicines Agency is to be created to reduce the availability of fake and substandard drugs in the continent, while also working to improve the availability of affordable medicines. The planned ‘super-regulator’ will be modelled on the European medicines agency and established by the African Union in coordination with the World Health Organisation and New Partnership for African Development. It will work hand-in-hand with national regulators across the continent to remove counterfeit and dangerous products from the market, and is expected to be operational by 2018. (AH)

Link between terrorism and counterfeit trainers? – United States customs officials are reportedly scaling up their efforts to tackle the trade in fake high-end sneakers, which they claim risks diverting money into the hands of drug traffickers and terrorists. ABC News Radio notes that fetching hundreds and sometimes thousands of dollars for a pair of shoes, rare footwear has become one of the most counterfeited products in the country. As well as damaging luxury brands, the report highlights how illicit trade benefits violent political and criminal organisations. For example, the 2015 Charlie Hebdo attackers are suspected to have funded the purchase of their weapons by selling fake Nike trainers. The link between terrorism and counterfeiting has long been a hot topic, with scepticism over the connection often voiced by consumers. As such, messaging that challenges the notion that counterfeiting is a victimless crime is to be encouraged. (AH)

Quality of applications better, says Indian official – India’s deputy registrar of trademarks, RA Tiwari, has revealed that the application acceptance rate has risen from 5-7% to 35-40 % in recent months – indicating a sharp improvement in the quality of trademark filings at the office. More specifically, in an interview with Business Standard, he pointed to an increased awareness of the value of intangible assets among the country’s businesses, reflected in a surge in registrations from companies outside major conurbations, as well as a decrease in frivolous filings. (AH)

Bacardi ups pressure on US Treasury in Havana Club spat – Bacardi has launched legal action against the US Treasury Department for failing to hand over documents it requested in 2016 regarding the government organisation’s decision to grant an Office of Foreign Asset Control license allowing Cubaexport to renew its US registration for the HAVANA CLUB mark. The Treasury Department move reignited the long-running dispute over the rum brand between Bacardi and Pernod Ricard (summarised in this World Trademark Review blog). Having sought access to government documents that it claimed would throw light on the nature of the “unprecedented decision” to renew Cubaexport’s mark, Bacardi now alleges that the Treasury Department failed to provide papers that it was obligated to disclose. The dispute continues against a background of increased uncertainty in US-Cuba relations under the Trump administration. (AH)

UAE clamps down on fakes – Government agencies in the United Arab Emirates have intensified their efforts to bring counterfeiters to book as part of a drive to make the country more attractive to foreign investors. Director of Dubai Customs’ IP department, Yousef Ozair Mubarak, has declared that the government is taking a “firm stand” against trademark infringement because, he said, of IP’s importance to national economic development, which is increasingly geared towards “creativity and innovation”. As reported in local media, the first six months of this year have seen more than Dh72.584 million worth of fake goods seized by authorities. (AH)

Media Watch:

Kodi calls out trolls – The developers behind open-source media management software Kodi have hit out at so-called “trademark trolls” for using “less than altruistic motives” to profit from the goodwill of the Kodi name. In a blog post, the company’s community and project manager Nathan Betzen explained the “hidden battle” it has faced to stop individuals who have obtained trademark registrations outside of the US for the term KODI. One such individual was named as Geoff Gavora, who attained the KODI trademark in his home country of Canada and, it is claimed, has used it to get companies delisted on Amazon to his commercial advantage. The post concluded by warning individuals that profiting on the Kodi name will not be tolerated: “We want to let the trolls know that we have caught on to this game and will not accept it. We are actively taking the necessary steps to ensure that the Kodi trademark trolls are dealt with appropriately. There is no value proposition in trolling the Kodi name.” We’ve written before about the transparent way that Kodi writes about trademark enforcement, and this is another example of that. While announcing an IP crackdown is usually met with hostility online, Kodi uses it as a way to explain the advantage of trademark protection (in this case, in helping to keep the software free) and it has been met with goodwill from users. Perhaps a lesson for the wider trademark community. (TJL)

Weeding out the bad actors – A recent article on Entrepreneur offered advice to companies in the legal cannabis space, and what preparation they should enact for if, or when, marijuana is legalised across the United States (referencing Senator Cory Booker’s Marijuana Justice Act). The first tip focused on the lax IP standards in the legal cannabis in industry to date, with countless examples of business and product names referencing already well-known brands. The author also suggests marijuana brand names avoid explicit ties to cannabis terms as well, saying the number of companies incorporating ‘canna’ or ‘marijuana’ in their brand name is overwhelming and is leading to “significant battles” over name recognition on social media and search engines. For private practitioners, it is another reminder of the opportunity in this space, with cannabis companies looking to expand and refine their fledgling brands. (TJL)

Talking brand protection – Principium Strategies has launched The Principium Pod, a podcast that will address trends and issues related to the protection of online brand and intellectual assets. The first episode features Dave Newell of Loptr LLC on mitigating the risks of phishing and ransomware, and is available now on iTunes, Google Play and SoundCloud. (TL)

Domain radar:

US politicians call for tighter gTLD regulations – Four US congressmen have written to ICANN to express concern over potential fraudulent use of the pending ‘.cpa’ gTLD.  Republicans Steve Pearce, Michael Conaway and Steve King, as well as Democrat Ruben Kihuen, have called for safeguards against the misuse of domain names associated with regulated sectors, such as accountancy. Pointing out that such domains elicit greater trust from consumers, they argue for closer cooperation between ICANN and professional bodies to ensure that fake applicants are weeded out. (AH)

‘.africa’ opens to public, reveals early registration numbers – The long-disputed ‘.africa’ top-level domain name has opened up registrations to the general public. According to Quartz, over 8,000 companies and individuals have already registered an ‘.africa’ domain following the sunrise period in April. That number will be set to rise now that registrations are in general availability from now until July 2018. (TJL)

A VIP approach to domain pricing In last week’s round-up we noted that the registry behind the ‘.club’ domain had revealed that the company is “very close” to breaking even and could move into profit in the near future. Fast forward a week and another new gTLD is reporting positive financial news. Earlier today a stock exchange statement issued by MMX (Minds + Machines) revealed that the company sold $2.8 million of premium ‘.VIP’ domains over the past 10 days. It adds that, in total, “since the release of its 2017 premium inventory for China in late June 2017, premium sales in excess of $3.4 million have been achieved in ‘.VIP’.” On Proactiveinvestors.co.uk, it is noted that the connotation of the term ‘VIP’ in China is closer to ‘premium’ or ‘top class’ in meaning, rather than ‘very important person’. Hence many companies are keen to use the TLD. ‘Premium’ is indeed the recurring theme in this story and is leading to some big numbers. (TL)

Industry Moves:

Dinnie climbs the ladder at Spoor & Fisher - South African and Jersey-based firm Spoor & Fisher has promoted Megan Dinnie to associate. Focused mainly on African litigation and anti-counterfeiting, Dinnie is also involved in the registration and management of IP rights. (AH)

Scungio joins Wolf, Greenfield & Sacks – The former co-chair of Locke Lord’s branding practice, Maria Scungio, has joined Wolf, Greenfield & Sacks as a shareholder. Scungio has over 20 years of experience managing portfolios for recognised brands and will help shore the firm’s New York office. This is a notable addition to the already renowned boutique, which moved up to the gold tier in the WTR 1000 2017 in Massachusetts. (TA)

And finally…

Monkey business comes to an end – While very much in the ‘copyright’ rather than ‘trademark’ camp, the legal battle over ownership of the picture taken by a macaque monkey (the so-called ‘Monkey selfie’) has generated headlines for a number of years. However, it has come to an end with British photographer David J Slater agreeing to donate 25% of any future revenue generated by use of the photograph to animal charities. The dispute centred on a picture taken when Naruto the monkey pressed the shutter button on Slater’s camera, taking the now infamous snap. Animal rights group PETA initiated legal action arguing that the copyright belonged to Naruto rather than Slater, but late last night a settlement of the lawsuit was revealed – bringing an end to one of the most high profile IP disputes in recent years. (TL)

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