Branding Strategy Insider

Inside Bait and Switch Advertising

According to the U.S. Federal Trade Commission Bait advertising is an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised.

No advertisement containing an offer to sell a product should be published when the offer is not a bona fide effort to sell the advertised product.

Initial offer

    (a) No statement or illustration should be used in any advertisement which creates a false impression of the grade, quality, make, value, currency of model, size, color, usability, or origin of the product offered, or which may otherwise misrepresent the product in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised product to another.

    (b) Even though the true facts are subsequently made known to the buyer, the law is violated if the first contact or interview is secured by deception.

Protecting Your Brand: Copyright Law

While organizations don’t often pursue this protection, logos are typically protectable by copyright law. Make sure your organization, and not an outside person or agency, owns the copyright to your brand’s logo.

Advertising/marketing agencies will often include an assignment of rights, titles and interests (including copyright interests) to their clients in their letters of agreement.  While trademark infringement requires proof of “confusing similarity,” copyright infringement requires proof of “substantial similarity.”

Online legal interpretation is evolving, but in general, organizations whose brands are strong and well known (“famous brands”) can legally defend their names and other marks against unauthorized use in domain names and <META> tags.  (Playboy (unsuccessfully) and Estee Lauder (successfully) sued other sites for using their brand’s names or slogans in their site’s meta-tags.)

Other online legal issues include the following:

•    cybersquatting – people who register and warehouse domain names that are other party’s marks
•    for-pay search engines selling marks as keywords to businesses that don’t own the marks
•    spammers who use other mark’s e-mail addresses as return addresses for their solicitations.

Special Problems: Organizations that License and Franchise their Marks

Protecting Your Brand: Trade Dress

Trade dress is a second form of legal protection for a brand - Trademarks being the first.  Trade dress is a brand’s distinctive aesthetic design features (package or product design).  To be protectable, trade dress must be non-functional and distinctive (or, have acquired a “secondary meaning,” that is, source identifying characteristics).  The more non-functional differentiating features one can build into a product and its packaging, the more likely it will be that infringement can be proved.

It is easy for a competitor to say, “I developed this very similar product independently” when it is fairly generic (such as a birthday card with a floral design the says simply “happy birthday”).  It is more difficult to convince a courtroom of that when your product has many of the same random non-functional elements as a competitor’s products (a line of cards of an unusual size that open from the top with rounded edges printed on green tinted recycled paper, all at 99 cents and all addressing the theme of friendship).  For a competitor to develop a similar line of cards with similar features independently is highly unlikely. It points to copying.

To protect its trademarks and trade dress, a company must constantly be watchful for and strenuously defend against infringement.  For instance, Apple has filed several lawsuits to defend its iMac against knock-offs. Trademark rights can be enforced through lawsuits at a state or federal level. Proving infringement requires proof that the infringer had second use of the mark and that the second user’s mark is confusingly similar to the senior party’s mark.

Branding and Trademark Law

While the best defense against copycat competitors is to stay ahead of them with a continuous stream of innovative, highly differentiated, and superior products and services, it is equally important to seek as much legal protection as possible for your brand.

Trademark Law
As a brand steward, you must be aware of the laws under which legal protection is available.  First, trademark law protects a brand’s identity.  That is, it protects names, titles, taglines, slogans, logos, other designs, product shapes, sounds, smells, colors or any other features that distinguish one source of products or services from another. Trademarks that protect services are often called service marks (“SM”).  There are also “collective membership marks” (Boy Scouts of America) and “certification marks” (UL approved).

Trademarks, like brands, build in strength over time.  The test for trademark infringement is “confusing similarity.”  Put another way, if the average consumer believes both products to have come from the same source, there is infringement. Obviously, the more a consumer is familiar with a particular brand, the more defendable its mark.  That’s why it behooves a company to do the following:

•choose a distinctive mark, including a “coined” name. (brand names range from generic and descriptive to suggestive and arbitrary or fanciful (“coined”).  Obviously it takes longer to build meaning for “coined” names, but they are also more distinctive and easiest to protect legally.  Kodak, Xerox, and Exxon fall in that category.  Suggestive marks are the next most protectable.  Examples include Coppertone, Duracell, and Lestoil.  Even common words can be used as trademarks as long as they are not used descriptively.  These common words/phrases are also suggestive marks: Amazon (big), Road Runner (fast) and Apple (different, offbeat).  Descriptive marks are not protectable unless the brand creates a secondary meaning for the word.  Examples include Weight Watchers, Rollerblade, and Wite-out.  Generic marks, such as Shredded Wheat and Super Glue, are not protectable at all.)

Godin on Trademark*

What every entrepreneur, geek, brand manager and marketer needs to know about trademarks...

If you Google "generic trademarks", you'll find a list on Wikipedia that includes, "aspirin, bikini, brassiere, cola, crock pot, dry ice, escalator, granola, heroin, hula hoop, jungle gym, kiwi fruit, pilates exercise system, trampoline, videotape, Webster's dictionary, yo-yo, and zipper". Each of these trademarks was worth many millions of dollars, and then, poof, it belonged to everyone.

Some people are worried about this. Jeroen send me a note and asked me to riff about it... it even has a name: genericide.

In 1999, I invented a trademark and wrote a book about it. Yahoo still owns the trademark in Permission Marketing®, but a quick search will show you more than a million matches for the expression. What's going on?

I had to make a decision. I could have pushed the world to call the ideas I wrote about, "Permission-based Marketing". Or, I could have been really flexible and encouraged people to call the approach the same thing I did. I figured it was better to be the coiner of a phrase used by millions than to have a little corner of the world all to myself.

And that's part of the paradox of a trademark.

Branding and Trade Secrets

Trade secrets are an often overlooked form of brand protection.  Trade secrets are simply information, techniques, procedures, codes, patterns, plans, processes, formula, prototypes, etc., that are developed confidentially and that are kept confidential.  This even includes customer lists and instructional methods.  The Coca-Cola syrup formulation is an example of a trade secret. (The added value of this approach from a brand perspective is that it often creates a mystique that has its own cache.)

Sometimes it is better to keep something a trade secret than to patent it.  In some industries, companies routinely watch for competitors' new patents and then try to design around them.  Non-compete and nondisclosure agreements are important, but not infallible, in protecting trade secrets.  The Economic Espionage Act of 1996 protects trade secrets against theft.  Information is legally considered to be a trade secret if an organization can show that it took reasonable measure to keep the information secret and that there is economic value to the information not being made public.

A business can protect its trade secrets in the following ways:

•Share confidential information only on a “need to know” basis.
•Limit the number of employees exposed to trade secrets. Always inform employees exposed to those trade secrets that (a) they are being exposed to secrets and (b) the importance of keeping the secrets secret.
•Mark all confidential documents “confidential – no copies allowed.”   For added security, number each copy and keep a log of which numbered copy was given to which employee.
•Use access logs for trade secrets.
•Require anyone (employees, suppliers, customers, consultants and other business partners) who might come in contact with trade secrets to sign confidentiality and non-disclosure agreements before the relationship begins.