Protection site

Importance of global brand and sub-brand protection strategy

Nearly 45 years ago, the Indian-origin soft drink brand THUMS UP was launched by the Chauhan Brothers of Parle1 . On February 10, 2022, the current owner of this brand, the Chairman and CEO of The Coca-Cola Company, Mr. James Quincey 2 announced that THUMS UP would become a billion-dollar American brand in India. This brand is and has been a household name in India and probably the Indian subcontinent almost since its launch in 1977. Coca-Cola Company (through its predecessors) bought it along with other brands in 1993 for 60 million US dollars.3 . Ironically, the Coca-Cola Company seems to have missed the bus in protecting this brand in its own country, i.e. the United States.

In the United States, THUMS UP has been registered as Meenaxi Enterprises, Inc. since 2012 and should continue to be so. The recent decision of the US Federal Court of Appeals4 the reversal of the decision of the Trademark Trial & Appellate Board to cancel the registration of this mark in the United States is of global concern for many reasons. Moreover, for the reason best known to the Coca-Cola Company, it did not rely on the notorious status of this mark even though it was considered well known by the Delhi High Court in India as early as 20145 . But of course, this is not the topic of discussion in today’s article.

This article focuses on the need for brand owners to have an effective and carefully thought out comprehensive brand protection strategy. That’s why this case, involving one of the Coca-Cola Company’s iconic brands, is a good example to draw from. This can help understand, identify and mitigate the potential risks of not adequately protecting its brands in jurisdictions of interest, globally. To appreciate its full impact, let’s briefly review the history and strength of this brand. When Coca-Cola bought it along with the other brands, THUMS UP grabbed a huge market share of over 80% in India.6 .

To date, THUMS UP boasts of a strong market share of 45% in the soft drink segment in India, a populous country, as we all know, with over 1.4 billion people in . In fact, according to some reports8 the brand is so resilient and iconic that it has survived attempts to kill him (siclisten)) solely due to its popularity with Indian audiences.

The Coca-Cola Company lost this iconic brand to an unrelated entity, Meenaxi Enterprises, Inc. in its home country of the United States Ironically, while Meenaxi Enterprises, Inc. in good faith can be questionable, she did a diligent filing search in the USPTO database and found that the THUMS UP trademark had been discontinued. Subsequently, he applied for registration of THUMS UP in 2012 and obtained registration under Regn. N° 4 205 598 on September 11, 20129 . On June 21, 2021, the Trademark Trial and Appellate Board revoked this registration and another for the LIMCA brand, also owned by Meenaxi Enterprises, Inc., which is a sister brand of THUMS UP and purchased alongside Coca-Cola in 1993 Interestingly, the Coca-Cola Company claimed use of this mark in the United States and relied on its Indian and global reputation, but not on the well-known status of this mark.

In the eyes of the United States Court of Appeals, these grounds were not sufficient for a successful reversal action in the United States. What happens next is we’ve been waiting and the world is watching, but it’s obvious the Coca-Cola Company is on its back, July 1, 2022, United States Federal Court of Appealsten reversed the Board’s decision and refused to cancel the registration.

Here are some of the potential and imaginable outcomes of this decision for The Coca-Cola Company:

(i) he cannot register the THUMS UP trademark although he purchased worldwide rights to it as early as 1993 for valuable consideration;

(ii) it cannot do business in the United States under that mark, which could potentially lead to the threat of infringement actions;

iii) he lost business he was conducting under the brand, without securing his brand and his lost reputation;

(iv) it has lost access to a whole market, which happens to be its national market and, presumably, a very important market for it.

Often, brand owners tend to protect their main brands or absolute essential brands, especially if they are house brands and ignore others. It’s safe to say that the smallest business, such as a start-up or individually run business, has around 2-5 brands. One can imagine the number of brands and sub-brands that an SME, MSME or a large company can potentially have, especially those that also export goods/services. Unfortunately, we limit protection to the main ones instead of layering them, largely based on budgetary constraints and business objectives.

Some of the major trademark battles, fought in the courtroom of a foreign country, have stemmed from a failure on the part of the trademark owner to be proactive in those areas and involve trademarks, which are under -marks, but important. There are a multitude of such examples, including “iphone” and “facebook” in China11“Prius” in India12 “Thinking Differently” in the EUIPO13“iWatch” in UK14 “one more thing” and “SWATCH one more thing”15 United Kingdom.

In this context, here are some practical tips to mitigate the risks of losing valuable trademark rights and avoid global reputation risks:

i) identify your brands and sub-brands, whether created and/or acquired. Most of the time they are obvious – slogans, words, devices, labels, devices, 3D shapes, names, colors, signatures, letters, numbers, etc. but sometimes trademarks are also created by common usage, customer reference, internal employee terms and may not be so obvious;

ii) regularly perform an internal audit to examine, review and identify intellectual properties – this task can be done every 3-5 years, during which time existing brands, marketing strategies, packaging materials and many others valuable properties tend to undergo many changes and be created along the way;

iii) identify all markets of interest and divide them into 3 categories – important, next step and last step. Trademark protection applications must be filed in each of these jurisdictions. This can be done in stages to cover the most important ones first, followed by the other two and preferably all within 1-2 years of entering and/or identifying markets;

iv) use international treaties and consult with intellectual property specialists, who regularly work with law firms around the world, and can help make your business a reliable and profitable service/law firm;

v) perform pre-filing research – this is the most underrated, underrated and underrated service, but its importance cannot be overemphasized. Discuss with your associates to see if they can deliver highly cost and time efficient search results using existing search engines/service providers.

vi) if your mark is used and/or registered by another entity in a foreign jurisdiction, take action. It is important to send the right message and record your protest.

vii) if you are likely to infringe and/or impersonate another country, consult local associates and/or your existing attorneys to help you find a good local associate in that country. It is essential that this discussion is conducted with a local lawyer as often national laws require local representation.

viii) most importantly, value your intellectual property and it will deter others from violating it when they see you taking action to protect your brand/intellectual property.

Above are some practical tips that can go a long way in avoiding the loss of these valuable rights in a jurisdiction of interest.