During the process of a company’s growth and development, the ‘brand’ transforms into one of its most important assets as it inexorably becomes associated with its products and services.

While the quality and pricing of a brand’s products and services are critical to its success, many companies arguably rely more on strong branding and customer loyalty to keep profits flowing.

With competitors in each industry, companies must strive to differentiate themselves from one another and promote their products and services in a way that successfully connects with customers.

Businesses also have to generate awareness and maintain a good reputation to keep their brands strong, which goes far beyond simple distinctions such as the brand name, logo, or package design.

In an increasingly globalized world, protecting your brand’s value is not always simple. As an entrepreneur, you must understand how to protect your brand equity, both legally and competitively.

Brand equity refers to the value of a brand name that a company has. General criteria that attributes to brand equity includes:

brand awareness – memorability, meaningfulness, likeability, adaptability, transferability, and protectability brand association – the implicit and explicit meanings consumers get

So what are the ways that you can protect your brand both legally and competitively?


1. Choose appropriate brand elements to legally protect, both nationally and internationally

Brand elements consist of the various components that identify and differentiate a brand, such as the business name, logo, signature colors, tagline or slogan, symbol, and package design.

It’s beneficial to preserve these brand elements locally and globally because it prevents unscrupulous companies from creating knockoffs that will devalue your brand.

Simply put, a global brand that is not legally protected enables opportunities for other businesses within and outside the country to easily create knockoffs.

Knockoffs devalue brands because the similarity, no matter how silly or badly produced, can create consumer confusion in which consumers may associate the lower-quality product with said brand. Not only are companies stealing your hard earned market share, people may also associate their inferior products with your brand.

On the other hand, having a strong brand equity minimizes consumer confusion across different markets, and helps leave a lasting impression in the minds of consumers, enabling stronger customer relationship and loyalty. To emphasize how important legal protection is, it is estimated that counterfeiting costs US businesses $200 billion annually.

A classic example is Nike, a powerful brand that attracts convincing knockoff and counterfeit products. Recently, Nike sued a China-based brand, Fujian Bestwinn, that infringed on many of the popular shoe brand’s patents.

Nike alleged that Fujian Bestwinn attempted to make, sell, and import the knockoff shoes in US markets. Because Nike had protected their shoes with several patents, the U.S. courts allowed Nike to seize the infringing knockoff shoes at a trade show in Las Vegas.

Furthermore, it’s beneficial to preserve these brand elements globally and have consistency in brand image as uniformity in packaging, advertising, and promotions can bring cost advantages.

According to David Kiley in the article, “One World, One Car, One Name,” in Bloomberg BusinessWeek, branding experts say that just using one name for branding purposes can save a business tens of millions of dollars per years in marketing costs alone.

2. Register with appropriate legal bodies

When a firm is seeking to expand to other countries, it is important to file a trademark to preserve and protect the brand rights.

The brand elements, or the trademarks, should be registered within each country’s government patent and trademark agency to help simplify the process of initiating legal disputes.

For example, in the U.S., you would register with the United States Patent and Trademark Office (USPTO) whereas in China, it would be the China Trademark Office. The process and rules may vary in addition to the differences in the country’s policies and laws.

Looking again at the Nike-Bestwinn situation, the case is being decided in federal district court in Nevada, which has no power to stop Bestwinn’s sales outside the US.

Legally, it is difficult to fully prevent consequences like this from happening, but by filing the appropriate patents and trademarks can allow companies to exercise their legal rights within the country to take measures against the offender at hand.

As businesses increasingly become global, registering with legal bodies will help to prevent future legal issues and infringement, which can affect the image of a company.

3. Defend trademarks from unauthorized competitive infringement

When businesses successfully brand themselves, they create a built-in competitive advantage that positions them as paragons of their respective industries.

Given how challenging it is for startups and newcomers to compete with a strong brand, sometimes these less experienced companies choose the low road and illegally copy and infringe upon the stronger companies’ brand elements.

This leads to stolen ideas and trademark infringements, pulling companies into lawsuits usually after a flurry of cease and desist letters have been exchanged.

These issues can come into play especially for luxury brands who must legally protect their trademarks and fight against counterfeits.

As another example, famous coffeehouse chain Starbucks sued a dog day care center called, “Starbarks.” The similarity in the brand name and logo provoked the Starbucks legal team to point out that Starbarks violated their trademarked logo, which would cause consumer confusion.

The dog day care center Starbarks was forced to change their logo and business name, prompting them to rebrand their entire business which can be an expensive and time consuming undertaking.

In the event that your business undergoes mergers and acquisitions, or if you plan to sell it, you can also use a trademark assignment to transfer the rights to these brand elements. Having the ownership and rights over these products and ideas is absolutely essential in establishing brand credibility and reputation.


1. Differentiation

Differentiation refers to the unique attributes a business has that makes it different from its competitors. Strong product differentiation builds a competitive advantage that contributes to brand equity.

Brand awareness and brand association are heavily affected by the quality of the products and services given. This includes establishing points-of-parity and points-of-difference.

Points-of-parity are factors that are necessary for a brand to be recognized as a legitimate competitor in their industry. Points-of-differentiation are the unique attributes a business has that differs it from its competitors.

While these components are relative to competitors, it’s important to have a brand that stands strong on its own, with the ability to have the brand association strengthened and reinforced throughout time, maintaining sustainability. This includes strategizing to know who the market is and addressing each customer segments’ needs.

Creating an excellent product is useless if it’s not relevant to the consumer. A clear differentiation for your brand decreases consumer confusion and builds your brand identity, leading to strong brand equity and loyalty.

2. Generate value for the firm and stakeholders

When stakeholders see the value in your company, they are willing to increase support, take risks, and invest in your firm.

Stakeholders include all the individuals that take part in your business including investors, employees, customers, and suppliers.

The amount of future cash inflows your company is able to generate is crucial to not just the financial success, but to the stakeholders themselves.

General financial reports by companies reveal financial information that estimate the value of the reporting company, as it also indicates value of a particular stock.

For investors and stakeholders to evaluate the worth of an entity, they must take into consideration the “amount, timing, and uncertainty of future net cash inflows to the entity” as stated by the Financial Accounting Standards Board.

Once a company has a proven track record and stakeholders see the financial value in the company, it provides the opportunity for the firm to obtain more capital and assets which can lead to better development of the brand.

With a strong brand equity, a company will have a solid foundation for brand reputation, credibility, and sustainability, which are critical components that would encourage stakeholders to invest, allowing the company to grow.

4. Sustainability and longevity of the brand

Sustainability of the brand applies to maintaining differentiation and strong brand recognition in the long-term, in addition to continuously reinforcing and strengthening the brand association.

This can be obtained through sustainable competitive advantage. This means that unique assets, attributes, or abilities of the company are difficult to be replicated or surpassed by another company.

If these assets are hard to duplicate, then it gives the company a competitive edge. Having these factors allows for a superior position over competitors in the long run, creating a chance to outperform others in the industry.

The brand is an absolutely important part of a business. To build, establish, maintain, and protect it can only pave way to success for the company.

As Jeff Bezos, founder of Amazon.com, says, “Your brand is what other people say about you when you’re not in the room.” Make your brand leave a lasting impression in the minds of your customers and have something for them to take away too.

Author: Elaina Lin is a Marketing Specialist at Legal Templates, where they equip people with the right tools and resources to be their own legal advocates.

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