For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 12 November 2010

Nostalgic Brands: Can They Be Auctioned?

The title of an 8 November article that appeared in the New York Times, under the byline of Stuart Elliot here, caught my eye--"Vintage Brand and Corporate Names to Be Auctioned." For some time now, we have been witness to attempts to create an auction-based market for patents and the jury is still out on this. As set out in the New York Times article, the auction model for the disposition of intellectual property rights is now extending to trademarks. The gist of the article is as follows:

On 8 December, Brands USA Holdings will be auctioning off between 150-170 names and marks that it has reportedly been accumulating over the last several years. Some of these names have been in disuse for years and even decades. The auction will take place both at the Waldorf-Astoria hotel as well as online at trademarkauctioninfo.com  The auction list, inter alia, includes the following product brands up for sale: Allsweet margarine, American Brands, Bowery Savings Bank, General Cinema, Handi-Wrap plastic wrap, Infoseek, Lucky Whip dessert topping, Meister Brau beer, Phar-Mor discount drug stores, Shearson brokerage services and Snow Crop frozen orange juice. Changing Times magazine, Collier’s magazine and Saturday Review magazine. [To this Kat, they seem to be mostly U.S. brands.]

The attraction of these brands rests on nostalgia, harking back to symbols of more settled times. For example, within the car industry, nostalgic brands are exemplifed by the Volkswagen Beetle and Mini Cooper. According to the article, based on a study carried out at the W.P. Carey School of Business at Arizona State University, "nostalgic choices have power because they help consumers fulfill a need to belong." As explained by Kate Loveland, one of the authors of the study,“[n]ostalgia has a very social component.” Accordingly, Loveland noted, brands seeking to take advantage of nostalgia should "emphasize social interaction in the advertising.”

As is the wont of an article of this type, is long on branding anlysis but short on
trademark law. Whatever-- the trademark curmudgeon in me raises the following points:
1. How does a prospective purchaser carry out due diligence on a prospective mark prior to the auction?
2. If some of these marks have been in disuse for an extended period of time, how they can still be valid?
3. If they are not valid, then why should someone pay for the mark at auction; isn't just cheaper to seek to file for registration anew?
4. If the mark is still valid, then how does the auction take care of the transfer of sufficient goodwill to meet the requirements of U.S. law on this point?
5. Are the rights limited to the U.S., or does the sale purport to convey rights worldwide?

As for the branding issues themselves, it is difficult for me to understand how nostalgia can provide the basis for reviving a moribund brand. Unless, perhaps, there is a continuity in the product or service that enables the consumer to reach back into the past while also enjoying the perceived advantages of the brand in the present.

More particularly, I have the following additional thoughts. First, exactly what population is being targeted? Second, if that population can be identified, how are they supposed to be reached? Third, what nostalgic experience are these brands intended to conjure up and why can it be expected that consumers will be pay for this experience? Fourth, how is that nostalgic experience supposed to be translated into bona fide commercial activity? Fifth, how does one attempt to value of a given brand, especially in the context of a dynamic auction?

I don't doubt that there may be the odd brand that can be successfully resuscitated on the basis of nostalgia. But such instances are few and far between and they need to be carefully selected and nurtured. Somehow, the sound the auctioneer's gavel seems an inappropriate way to provide the platform for a brand of the past to enjoy a second life by exploiting nostalgic memories of an vanished product or service past within a population at the cusp of retirement. But maybe I am not nostalgic enough.

3 comments:

Anonymous said...

"Nostalgia isn't what it used to be!" ...

Anonymous said...

Sometimes nostalgia seems to work very well if it is "retro", as in the case of the nice Swiss brand "nabholz" which has been successfully relaunched in the last years (at least in some parts of Europe), specializing in retro-style sportswear and being popular among people who were probably not familiar with the original brand.

A nice story about some sports enthusiasts and of course very well-marketed (http://www.facebook.com/pages/NABHOLZ/182619932154?v=info).

Anne Gilson LaLonde said...

The reincarnation of nostalgia brands, also known as zombie trademarks, is a legal method of deceiving consumers. By definition, these marks are inherently deceptive. The only reason for reviving such a brand is to lure a consumer into believing that the goods are the same ones she remembers from days gone by, when they are not. In fact, there is no legal requirement for product continuity or consumer notification when someone revives an abandoned brand.

A handful of businesses specialize in the sale of zombie marks. After determining that a mark has been abandoned, such a business may file an intent-to-use trademark registration application with the U.S. Patent and Trademark Office based on a bona fide intent to use the mark in U.S. commerce, it may petition to cancel any registrations of the mark, and it may pay the original owner for a quit-claim assignment or covenant not to sue.

U.S. courts and the USPTO's Trademark Trial and Appeal Board have considered the possibility that an abandoned mark's residual goodwill could prevent use of the mark as a zombie. However, no court has allowed a trademark owner in an infringement action to sidestep the abandonment defense based solely on residual goodwill. Thus, at present, there is no clear legal remedy for protecting consumers from the siren song of zombie marks, or nostalgia brands.

-- Anne Gilson LaLonde, co-author with Jerome Gilson of "The Zombie Trademark: A Windfall and a Pitfall," 98 TMR 1280 (Nov.-Dec. 2008)

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