AJPark

A double designation brand combines a house brand with a sub-brand. The sub-brand is often a descriptive term which tells the consumer something about the product. A consumer links the business providing the product through the distinctive, and often heavily promoted, house brand but can distinguish between different product ranges using the sub-brand. 

Often the sub-brands chosen are descriptive of the goods or services they are used on and would not of themselves be registrable as stand alone trade marks.

House brands link products, in the minds of consumers, with the retail outlet or ‘house’ in which they are sold rather than with the manufacturer. 

A ‘branded house’ brand strategy involves adopting a single house trade mark to span a set of goods and services usually, but not always, coupled with a range of sub-brands. So, one company that provides a range of different products uses the same brand for all those different products. Examples of a branded house strategy include VIRGIN (entertainment and travel), CATERPILLAR (construction vehicles and shoes) and CANON (office equipment and cameras).

This strategy can be contrasted with the ‘house of brands’ strategy which involves adopting independent, unconnected brands each focusing on maximising the impact on a market.  Procter & Gamble adopt this strategy. In the hair care product market, they use separate, independent brands like PERT, PANTENE, CLAIROL, VIDAL SASSON and HEAD AND SHOULDERS. There are bound to be others.

What's right?

There is no right or wrong branding strategy. A business should adopt the branding strategy that works best for them and is aligned with their overall business objectives. There are pros and cons with each strategy. It is therefore important to think carefully about the implications of adopting one strategy over another and seek advice to help you get it right.

Case Study

A recent German Supreme Court decision highlights the difficulty that can arise with a ‘branded house’ strategy. The case showed how hard it is to register an essentially descriptive brand which has always been used with a distinctive and well-known house trade mark. The individual trade marks in question were NIVEA and VISAGE. NIVEA VISAGE is of course a brand recognised and loved by New Zealand consumers. It is also well known internationally.

Beiersdorf, the owner of the NIVEA brand, has for years marketed its skincare products under the house brand, NIVEA. Consumers worldwide are familiar with Beiersdorf’s products and particularly the NIVEA range. To help consumers identify particular products from its ever increasing skincare range, Beiersdorf adopted the practice of always using its house brand NIVEA with the particular product brand. An example is its range of facial beauty care products which it has marketed under the trade mark VISAGE for many years.

But Beiersdorf has not promoted VISAGE on its own. Instead, VISAGE has always been promoted with the house brand NIVEA. This strategy worked well for Beiersdorf.  Having established a strong and well recognised reputation through its use of NIVEA, Beiersdorf was able to capitalize on that reputation to promote its VISAGE range.  The range enjoyed immense recognition simply by being linked to the NIVEA brand.

Over the years Beiersdorf registered various presentations of the trade mark NIVEA VISAGE. After about ten years of using NIVEA VISAGE together, Beiersdorf decided to apply to register VISAGE as a stand-alone trade mark.  This is when things started to get off track.

Beiersdorf’s attempts to register VISAGE by itself as a trade mark were unsuccessful. The problem was that VISAGE was considered descriptive.  Descriptive terms cannot be registered as trade marks.

VISAGE means “face” or “appearance” in French. The word VISAGE is also commonly used in the international cosmetics market. Therefore when used on facial beauty care products, VISAGE described an attribute or characteristic of the goods it was used on. The German courts refused to grant Beiersdorf exclusive rights in VISAGE.

Even though Beiersdorf had used VISAGE for many years (but always with NIVEA) it was unable to prove to the satisfaction of the German court that VISAGE had acquired sufficient distinctiveness to be registered on its own account as a stand alone trade mark.

Beiersdorf provided to the court information about its marketing, advertising and sales but this information always showed VISAGE used with the house brand NIVEA. It also provided a consumer survey about how consumers perceived the trade mark VISAGE.

Despite these valiant efforts to show that VISAGE could stand on its own two feet, the court felt otherwise. It felt that the fame and pervasive use of the house brand NIVEA overshadowed consumers’ views of the sub-brand VISAGE.

This case highlights the difficulties trade mark owners face when they adopt descriptive sub-brands and use them with distinctive and easily recognisable house trade marks. Initially, registration of the brand is often sought for the ‘double designation’. If at a later stage the trade mark owner tries to secure exclusive rights in the sub-brand, this can be difficult to achieve. Often there is little or no evidence to show that a descriptive sub-brand has acquired distinctiveness if it has only ever been used with a well-known house brand.

Trade marks act

Previously, businesses using descriptive brands in New Zealand would, nevertheless, make an initial attempt to register their descriptive brand as a separate trade mark. If rejected, the trade mark owner could then simply amend their application to add a distinctive house brand to the application. In this way, the business still achieved registration for the combination of their house brand and their descriptive sub-brand. There are many trade marks on the New Zealand register that fall into this category of trade mark. 

However, that all changed when the New Zealand Trade Marks Act 2002 came into force.  No longer were trade marks owners able to add distinctive house brands to overcome rejections of descriptive brands.  A whole new and separate application would need to be filed. A similar situation exists in Australia where it is not possible to amend a trade mark application “if the amendment substantially affects the identity of the trade mark”. 

Brand owners need to think strategically about the trade marks they want to use and register.  With no ability to ‘add’ distinctive brands to a descriptive sub-brand, a trade mark owner needs to carefully consider and plan how it will use its brands.  If you eventually want to monopolise your sub-brand, quite apart from using one that is less descriptive, using a marketing and advertising strategy which highlights the trade mark character of the sub-brand is important.  This will increase the distinctiveness of that brand alone.  The better course of action would be to select a distinctive sub-brand from the outset.

An edited version of this article was published in NZ Retail, December 2008.

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  Corinne Blumsky

  Partner