By the time this 2015 Fall edition of snippets® hits your inbox, our readers in the United States will already have been inundated with articles and thoughts about Thanksgiving—a time to take a step back and be thankful for what we have. At the same time, many of us are also involved in planning for a bigger and better 2016—reviewing and approving budgets, setting goals, and formulating action plans. Accordingly, this is the perfect time and environment in which to take a close look at your trademark portfolio. It is the time to be thankful for your brand’s position in the market and the investments you have made into searching, registering, maintaining, and enforcing your trademarks. But it is also the time to set goals and develop plans to make better use of your trademark portfolios. With a bit of guided, strategic thinking, we hope that this article will help you maximize the return on your investment in intellectual property in the new year.
More Than An Audit
The first step toward maximizing the return on a trademark portfolio is to appreciate the current status of the portfolio and to honestly assess the strengths, weaknesses, and value of the brands within it. While a traditional trademark audit is often thought of for this purpose (and is always valuable and certainly recommended on an annual basis), an audit is often viewed as either an “investment” or an avoidable cost. Therefore, in order to generate a measurable, financial return on intellectual property investments, a more creative approach is required. Specifically, companies and clients need to find ways to utilize their primary brands to either develop new customers or deepen engagement with current customers. This can be accomplished by expanding the reach of a brand through licensing or by setting up corporate social responsibility (CSR) programs.
Expand Your Brand
One of the obvious ways to enhance the bottom line of a company is to sell more of a company’s branded goods or services. Most of the time, the responsibility for increasing sales rests with the sales and marketing teams, not the legal department. Some of the best opportunities, though, are hidden within the intellectual property portfolio of a company and can be unlocked by working with the legal team to review and assess the portfolio. Procter & Gamble, for example, developed a successful new oral care product line by combining two pre-existing but separate trademarks, Crest® and Scope®.
If combining brands is not an option, brands can also expand through licensing or co-branding, like Cinnabon® has done in recent years. As some snippets® readers may know, the Cinnabon® brand was built through the distinctive aroma and flavor of Cinnabon® cinnamon rolls that were sold primarily through malls and airports. Through an aggressive licensing and co-branding program led by Kat Cole, the distinctive Cinnabon® brand was extended to products containing cinnamon—breakfast cereals, coffee creamers, frostings, and even vodka. In this way, the Cinnabon® brand experience was extended into grocery stores and homes, resulting in sales surpassing $1 billion.
While hindsight makes it easy to see how famous brands can expand into new channels, brand expansion is possible for any brand, even if your product is currently an unbranded component of another product. Remember, it wasn’t so long ago that computer chips, speakers, and the chocolate in a boxed cake mix were merely generic components. Now, every computer has Intel Inside®, Porsche® and General Motors® cars feature premium Bose® speakers, and Betty Crocker® cakes feature Hershey’s® chocolate.
Whether your client or company owns one trademark or thousands, brand extensions that will dramatically impact the company bottom line are available. After clearly articulating your brand’s attributes and value, potential partners and licensing opportunities will become apparent. Your trademark lawyer, working with marketing and sales data, can both identify these opportunities and start putting together a detailed licensing plan to generate revenue.
Growing Brands Can Change the World
Another, not so obvious, way to use a trademark portfolio to generate a return on investment is to build a branded corporate social responsibility program. While many CSR programs originated in the 1990s when companies began to focus on the “triple bottom line” (financial, social, and environmental), these programs now have a direct impact on the financial bottom line of a company. A recent Weber Shandwick study found that almost sixty percent of consumers in the United States (and over eighty percent in China) try to buy products from a company that is doing good things for the environment or the community. Indeed, customers want to know that their purchases make a difference in the world, and they will vote with their wallets.
One Size Does Not Fit All
Part of the demand for branded CSR programs comes from customers demanding consistency between the product brands that they buy and the associated corporate brand. As a result, CSR programs must be as unique and distinctive as the underlying brands. Examples of CSR programs aimed at enhancing brand distinctiveness include TOMS® shoes and Warby Parker® glasses, which have made the “buy one, give one” model famous. Patagonia® donates one percent of all sales to help protect the environment. Kroger®’s CSR program focuses on food safety, education, meal donation, employment of veterans, and sustainability. Goodyear®’s CSR supports STEM education, road safety, and environmental sterwardship. Many law firms have ramped up their pro bono practices. Still other companies develop and build charitable foundations, like Virgin Unite®, that are consistent with their respective corporate missions and brand values.
Since every branded CSR program is unique, each program also presents distinct legal issues. For this reason, lawyers working with these programs should evaluate the programs both for consistency with brand values as well as traditional trademark and false advertising issues. In addition, legal teams should be aware that the Federal Trade Commission (FTC), the National Association of Attorneys General, and the Environmental Protection Agency all have guides that govern proper environmental marketing. Terms like “green,” “recycled,” “sustainable,” and “environmentally friendly” should not be used without consulting these guides. Finally, legal teams must evaluate the absolute truth and consistency of any CSR claims and consider the potential impact of negative publicity for inconsistent actions.
CSR Bottom Line Impact
When the triple bottom line philosophy gained popularity, many companies quickly recognized that investments in social and environmental issues could lead to increased customer loyalty and employee retention. Back then, the long term return on such investments was lower replacement costs, increased sales, and greater profit. A branded CSR program certainly provides these same benefits, but also has a much more direct impact on the bottom line. Just like the underlying brand itself, the clear strategic vision for employees and customers that a branded CSR program communicates acts as a natural differentiator between a brand and its competitors. As a result, employees and customers ultimately have a better understanding of and admiration for the brand. This deeper engagement leads to higher brand recognition and increased revenues, which of course leads to better bottom line profits.
Start Small, Dream Big
A great example and inspiration for unleashing the power of a trademark portfolio both to generate a bottom line return and to change the world is Sir Richard Branson. Branson opened Virgin Records® in 1972. Various brand extensions led to the formation of Virgin® Airlines and Virgin Mobile®, and today the Virgin® brand is used in connection with racing, radio, wines, travel, and investment funds. Branson has even extended the Virgin® brand to CSR through an earth challenge and green fund, as well as the previously mentioned Virgin Unite® charitable foundation.
Behind Branson’s brand extensions and growth is a deep desire to change the world. In fact, Branson claims that striving to be profitable provides the strength to continuously discover better ways to be a force for good. The bottom line impact of this philosophy? Virgin® companies recently generated over $22 billion in annual revenues.
Companies that are trying to make a profit while being a force for good are changing the world. TOMS®, Warby Parker®, Patagonia®, Virgin®, and brands like them are replacing luxury brands as the status symbols of the new generation. As this year winds down, take some time to review your trademark portfolio and make some plans for the new year. What brand extensions make sense? Is it time to implement or improve your company’s or your client’s branded CSR program? How can your brand be a force for good in the world? If you can answer that question, the power of your trademark portfolio will begin to be unleashed.
 Crest® and Scope® are registered trademarks owned by The Procter & Gamble Company.
 Cinnabon® is a registered trademark owned by Cinnabon, Inc.
 Intel Inside® is a registered trademark owned by Intel Corporation; Porsche® is a registered trademark owned by Dr. Ing. H. c. F. Porsche Aktiengesellschaft; General Motors® is a registered mark owned by General Motors LLC; Bose® is a registered trademark owned by Bose Corporation; Betty Crocker® is a registered trademark owned by General Mills Marketing, Inc.; and Hershey’s® is a registered trademark owned by Hershey Chocolate & Confectionery Corporation.
 Weber Shandwick, The Company Behind the Brand: In Reputation We Trust, available at http://www.webershandwick.com/uploads/news/files/InRepWeTrust_ExecutiveSummary.pdf.
 TOMS® is a registered trademark owned by Mycoskie, LLC; Warby Parker® is a registered trademark owned by JAND, Inc.
 Patagonia® is a registered trademark owned by Patagonia, Inc.
 Kroger® is a registered trademark owned by The Kroger Co. of Michigan, and Kroger’s CSR program is described here: https://www.kroger.com/topic/community; Goodyear® is a registered trademark owned by The Goodyear Tire & Rubber Company and Goodyear’s CSR program is described here: https://corporate.goodyear.com/en-US/
© 2015 McDonnell Boehnen Hulbert & Berghoff LLP
snippets is a trademark of McDonnell Boehnen Hulbert & Berghoff LLP. All rights reserved. The information contained in this newsletter reflects the understanding and opinions of the author(s) and is provided to you for informational purposes only. It is not intended to and does not represent legal advice. MBHB LLP does not intend to create an attorney–client relationship by providing this information to you. The information in this publication is not a substitute for obtaining legal advice from an attorney licensed in your particular state. snippets may be considered attorney advertising in some states.