TRADITIONALLY, a brand (trademark, service mark, logo) serves as a business identifier. The cardinal purpose of a brand as we have traditionally known, has been to distinguish a company's products or services from those of its competitors and to create a unique company's identity.
The unique identity is meant to gain a competitive advantage in the market.
Brand loyalty is built over time and may require massive investment in developing marketing strategies, consistency and upholding high-quality service and product standards.
Moreover, many consumers associate a brand with the quality of a product or service. Generally, customers prefer a branded product over a non-branded one, even though the quality may be different. In many instances, brand loyalty is proportional to the quality of the products or its service.
Prospects of branding are enormous, ranging from product and services identification and ensuring healthy competition among enterprises, serving as additional revenue streams through licensing and franchising. A brand can also serve as collateral security in the bank in some jurisdictions. It is important to note that a brand (Trade/service mark) value can be far better than the company's turnover of other physical properties.
For instance, Apple’s value is estimated at $703.5 B of which 30% accounts for its brands and sub-brands (iPhone, Mac, iCloud, etc.). Apple is currently the highest valued brand with a brand value equivalent to $241.2 B, the company generates $260.2 B through licensing option. However, Apple cannot achieve this without having and strong intellectual property system in place.
The concept of branding goes hand in hand with intellectual property framework, intellectual property system grants an exclusive right to the owner to make use (display on products) and benefit (licensing) from brand for a specific time renewable every ten years, see article 153 of the law N° 31/2009 OF 26/10/2009 on the protection of intellectual property.
Intellectual property forms a vital part of brand development, management, and commercialization. The main objective of IP is to drive innovation and creativity through the protection of holders of interest (Patent, Trademark, Copyright, Industrial Designs. etc). with regards to branding, the power of brand loyalty and equity do not merely reside in huge marketing strategies but rather in registered portfolios and levels of enforcement of intellectual property laws.
Yes, unregistered brands may enjoy protection, however, a duly registered mark stand more chances of being commercialized and as collateral security like any other property like land. I a nutshell, a land title and trademark certificate weigh the same weight.
Nonetheless, some companies particularly SMEs around the world, face thorny issues as regards to the cost of brand protection especially at the international (Madrid system), awareness on the applicable intellectual property regime, brand management and sometimes challenges with enforcement hence prompting them to alternatively invest their limited resources in what they wrongly consider more productive such as the use of agents, multilevel marketing and door to door selling.
The concept of branding is still understood in a traditional way related to products and services identification yet a protected brand with recognizable loyalty and equity can serve several purposes and act as an additional revenue stream.
In the Rwanda context, the current intellectual property legal and institutional framework is conducive enough for the business to leverage on it in protecting their brands among other IP assets and making their companies more competitive both at local, regional and international markets.
The author is a Board Member at the African Centre for Competition, Consumer Protection and Intellectual Property Policy, ACCIP Rwanda
The views expressed in this article are of the author.