Branding, agencies and due diligence…it’s time

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Ten years ago I was working for one of New Zealand’s top branding agencies in Auckland. One day, I noticed a colleague of mine was particularly distressed so I asked her what was up.

She told me a story I have never forgotten.

She informed me the agency had just completed designing a new brand for a key client.

The client, she continued, had applied to register the brand as a trade mark in 17 countries: 16 applications had been successful but one had not because someone else had already registered the brand.

The rejected application was in a key market. The client – quite reasonably – did not want to have two brands, so it was back to the drawing board.

All the time and effort that had gone into developing the brand was wasted; the investment worth nothing. Zip. Nada. Pakoreha.

What I couldn’t understand was why wasn’t this known earlier?

Surely someone had checked to see if the brand was available for use and registration in the relevant markets?

Apparently not. It saddens me to say but many branding agencies appear (at least overtly and to me) to be no more interested in implementing processes to avoid such mishaps today than they were 10 years ago.

Indeed, many agencies still appear quite content to let their clients assume responsibility for checking if the intellectual property they – the agencies – have created infringes someone else’s rights, saying ‘it’s your job, not ours’.

Appearances can be deceiving, of course, and I hope very much in this case they are.

I am not bagging branding agencies – not in the slightest.

Having worked in the branding industry I have the utmost respect for the amazing work they do in bringing brands to life and giving them a platform to succeed.

But I firmly believe that, as creators of IP for their clients, branding agencies have a duty of care to their clients to ensure that the work their clients pay for does not infringe someone else’s rights.

Due diligence on any IP created should be a stock component of all agencies’ service offering – not an optional extra. As consumers we expect the goods we buy to be fit for purpose – why then as clients should we expect the services we buy from a branding agency to be any different?

In my view it is incumbent on agencies to either up-skill their account managers’ knowledge of IP law or out-source that skill to a trade mark attorney, patent attorney or suitably qualified IP lawyer.

I am not alone in my conviction. Shireen Smith, founder and principal of Azrights Solicitors, a London-based IP law firm (www.azrights.com), is another believer.

According to Ms Smith: “A solid understanding of IP law can help a branding agency ensure that the choices [they make are]capable of creating potentially valuable intellectual property that is capable of protecting and improving a company’s competitive market position.

“Therefore, branding agencies need to find a way to incorporate IP considerations into their work. The practice of leaving IP considerations for clients to deal with through their own lawyers’ due diligence leaves a lot to be desired.

“Branding agencies are much better placed to provide access to the necessary legal checks. Any agency that creates intellectual property for clients plays an important role in the client’s ultimate value as a business, so they need to take on board trademarks, copyright and designs.

“These IP laws are relevant to an agency’s own business, and also determine whether suitable IP is created for clients. For example, a good name is one that is appropriate to the business’ plans and does not infringe on anyone else’s rights. Also, it must be the right type of name so it may be uniquely owned.  Once the due diligence is done, it is vital that steps are taken to protect the name before design work begins.

“That is how you ensure the identities, or other intangibles created, generate wealth and value for clients if their ventures succeed.”

‘Nuff said.

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Ben Cain

Ben Cain is an Associate at James & Wells Intellectual Property and a LEADR accredited mediator. Email: benc@jaws.co.nz | www.jaws.co.nz

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