Best practice for managing a global trademark portfolio

Eight tips to assist trademark portfolio management

Managing a global trademark portfolio can be a daunting task, even for an experienced trademark practitioner. There is a long list of disparate challenges that extend beyond gaining and maintaining a sound knowledge of the world of trademarks and local variations in practice and law:

• how to set and manage a budget;
• a good understanding of geography; and
• keeping up to date with technology.

This chapter looks at eight different portfolio management ideas that can make the task feel a little less daunting.

Setting a budget

For anyone managing a global trademark portfolio, setting an annual budget may feel more like gazing at a crystal ball than economic science. How do you predict in advance where you will need to file an opposition against an infringing application, or when an expensive problem might suddenly raise its head and require attention? How do you work out what it will cost to deal with these issues? Knowing that you always file applications in certain situations, classes and jurisdictions, that logos are protected as well as word marks, that local language versions will be needed in some countries will be vital to your trademark strategy. Advance knowledge of any intended new brands or market expansions is also key – if a filing programme is planned, then costs can be obtained in advance from your network of agents. However, a budget should include more than filing costs. Will screening or searches be needed? What local costs can be expected after the application has been filed? You can expect prosecution, publication and registration costs as a minimum. Will these additional costs be due in the same year as the application is filed, or one or two years later? Is the business considering any changes or acquisitions that would necessitate updating records (eg, change of name, address or assignment)? How many marks in the portfolio fall due for renewal during the year, and how many will be renewed? Prosecution and litigation costs are more difficult to predict – history can be a useful indicator; a knowledge of typical costs in key markets and a strategy that determines in advance how you respond to potential conflicts can also be useful.

Rightsizing your approach

Deciding if formal trademark protection should be put in place involves balancing commercial needs, cost and risk. For a key brand or house mark, the strategy may be ‘protect at any cost’; for secondary brands, secondary classes or secondary jurisdictions, the decision may be more cost-driven, factoring in market size, local issues and future plans. A good strategy is to decide in advance which brands, classes and markets must be protected through registration. While important, filing and registration costs should not be the only factor when reviewing secondary level protection, the ease and cost of defending unregistered rights should also be considered. If you anticipate that you may need to enforce your rights in a particular jurisdiction, then having the correct rights in place as early as possible is more of an investment than a cost. It can also be useful to remember that a trademark registration will be in place for a number of years (typically 10 years) and the cost of obtaining and protecting that right will be spread over time. Time spent getting details correct before filing an application can also be a good investment – dealing with official objections over specification queries or third-party objections is usually more expensive than the initial research. There are also filing strategies that offer significant cost savings. An EU trademark is a single registration covering all 28 EU member states, and costs only a little more than filing a national application in an EU country. If it costs £2,000 to obtain an EU trademark registration that is valid for 10 years, that is less than £8 per country per year. WIPO offers a system of international trademark protection – a single international registration can cover more than 100 countries and avoids paying legal fees at the filing stage in each country, making an international registration an extremely cost-effective way to obtain trademark protection in a large number of countries.

Effective use of screening and searching strategies

Before filing a new trademark application, it is good practice to conduct checks to identify any existing rights that may present an obstacle to your proposed mark. In an ideal world, full availability similarity searches should be conducted, but for practical and financial reasons this is not always possible. Screening – a search for identical or very closely similar existing rights – is a cost-effective initial step and should always be conducted where possible. A collision with an identical existing right is generally insurmountable – by conducting quick and inexpensive screening checks it is possible to avoid having a new mark ‘hit an iceberg’ on its maiden voyage. Screening can be conducted through various commercially available platforms or using online resources – and it is spending pennies to save pounds. Screening is also a practical way to quickly reduce a batch of potential names (or logos) to a more manageable number, by removing names with clear obstacles from moving forward. As well as strictly identical checks, it is also possible to include additional broader checks at the screening stage to look for near identical hits – for example, using basic letter substitutions (eg, ‘ph’ rather than ‘f’) to cover phonetic equivalents, plurals or minor variations. After screening has been carried out, more sophisticated searches should be conducted, particularly if a brand is launching soon. Because trademark applications can encounter obstacles on both phonetic and visual grounds, searching must consider both the look and aural aspects of the mark. If cost is an issue, searching can be restricted to key markets, key classes and regions where issues would be expensive and/or difficult to overcome. Both availability for use and registration should be considered when reviewing search results, and a local expert should be consulted if language or local practices make analysis challenging.

Searching globally with a limited budget

One of the biggest challenges when deciding on a new name or logo for a brand is determining whether the proposed mark is clear to register and use in a large number of countries. Even when budget is not an issue, searching can take time, so from a practical viewpoint there are some strategies to make the clearance process more manageable on a global scale. If a batch of potential names has been put forward, a simple screening step will quickly reduce the number by identifying major obstacles – from a batch of 50 names perhaps 20 (or a top 10) will clear the screening stage, thereby saving 60% to 80% of full searches had screening not been conducted. Ideally, full searches would be conducted in each jurisdiction before filing applications; however, this can be both expensive and time-consuming, with each significant obstacle becoming an expensive dead-end. A phased approach to searching (if time permits) can be far more cost effective – searching in key markets first (Phase I) and then only moving forward with the names that pass the first phase (or the top three if a batch is involved). Key markets may be defined by sales volume, revenue, known issues, future plans or as representative of a region (eg, Brazil and Argentina to check the position in South America). The survivors from Phase I can then be put forward to Phase II to check the position in secondary markets. This process will typically take three to four weeks for each phase and removes the risk of searching in a large number of countries simultaneously only to discover a knock-out obstacle in a single register that makes all other searches redundant. This timeframe should be factored in when deciding when to start screening or searching in relation to a product launch, and to allow time for additional local checks and investigations to reduce risk before filing applications. In some circumstances searches should look more broadly than simply trademark records – for example, if the mark will be used as a company name, then company and business name checks should be conducted to avoid clashes with existing names. Brand owners must check the availability of domain names and social media handles; app stores can be checked for existing names; common law rights can be checked online; and web checks can be tailored to specific industry sectors (eg, gaming and cannabis) to locate relevant existing names.

Leveraging trademark data

Trademarks are a powerful indicator of commercial activity. While patents suggest an area of interest or research and potential future commercialisation, trademarks represent actual products and services that are already in the marketplace or are about to launch. A trademark record contains information about the owner, the market (register), the product (specification) and timing (filing date). By looking at a register as a whole, it is possible to analyse the commercial activity of one or more competitors (ie, applicant or owner name) or an entire industry sector (eg, Nice Class or specifications), including new entrants. Trademark records also contain information on law firm representatives, making it possible to examine conflicts with competitors.

Recordals – an important part of enforcement

In order to protect legal rights – especially if they are to be relied on for enforcement – it is important to keep trademark records up to date whenever ownership details change. This may be a change of owner (assignment) if a trademark portfolio is sold or acquired through a company sale, if a company changes name, rebrands or changes entity (eg, from an incorporated company to a limited liability company), or when the owner’s address changes. While it may be tempting to delay recording the update until each record requires renewal, this seldom leads to cost savings (it is generally more cost-effective to record the changes against an entire portfolio simultaneously) and can make enforcement of your rights more challenging if records do not match the correct current owner details. While generally straightforward, recordals often require project management over a period of months or even years, and local expertise should be sought in each jurisdiction to avoid complications with legal requirements and documentation.

Leveraging technology to drive up efficiency

Trademark practitioners have used technology for a number of years to assist portfolio management and other tasks (eg, online search platforms and record management systems with laws and deadlines), but there have been no significant changes for some time now. This is about to change. Artificial intelligence (AI) has been on the horizon in the trademark space in recent years and is now starting to be used as a time-saving tool and to make previously impractical tasks possible. Trademark examiners at a number of registries are relying on AI to speed up the examination process (eg, searching for prior rights and determining whether the specification of goods and services and Nice Classes are aligned appropriately on an application). AI-driven classification tools can assist practitioners when preparing specifications for new applications. AI is also transforming the way that potential device marks are cleared, with image recognition able to classify an image to understand the image content and concept rather than relying on Vienna codes. This means that for the first time it is possible to quickly and easily screen for image marks as well as word marks, with significant cost savings and better risk management.

M&A due diligence

Brands can be the biggest single asset that a company owns, making trademarks a key part of many large M&A deals. Many large trademark portfolios are regularly affected by acquisitions and divestitures, with M&A due diligence a key part of that process. Due diligence is often conducted under pressure of time and confidentiality – having a plan in place beforehand can make the process less challenging. When conducting due diligence it is important to check not just the accuracy of trademark records (particularly ownership and status details) but also to conduct checks for non-disclosed records (ie, a global owner check), identify gaps by register, class and specification, and where possible identify conflicts, unresolved oppositions, and security interests and liens that may prevent rights from being transferred. For key brands and key markets, dilution searches can be run to check the register landscape and confirm the relative strength (or weakness) of the brand.

Managing a global trademark portfolio is more challenging than ever, due to the complexity and pace of change in our global economy. However, there are also strategies and tools that you can use to make the process less burdensome and more efficient, helping you to deliver a comprehensive and cost-effective approach.