Tuesday 18 December 2012

Brands as indicators -- or as investments?

IP Finance welcomes the following guest post from fellow MARQUES Class 46 blogger Nikos Prentoulis, a Greek IP attorney whose current thoughts are running along the following lines:
Nike sells UMBRO… and perhaps asks us to revisit the boundaries of trade marks as origin indicators

The news that Nike has struck a deal to sell UK sports brand UMBRO to Iconix Brand Group for $225m (here and here) would, at first glance, look like a nice opportunity to discuss brand valuation and growth, or even false hopes. For me however, it is the identity of the buyer that makes this matter interesting. For those, like me, who wonder who or what Iconix is, Iconix is neither a sports apparel or footwear manufacturer, nor a large retailer. And it will probably not bid (even disguised as UMBRO) for the sponsoring a major football (or soccer if you like) event. Iconix does not make apparel, it licenses apparel brands. A very honourable trade, mind you, but the questions lie elsewhere:
·         What if UMBRO were licensed to adidas? Impossible? I think “Impossible is nothing”, right? Although, one cannot know of any non-compete post-sale conditions, UMBRO is a football brand, so it should end up back in the same pitch.
·         What if one of the competitors in the athletic apparel market devaluates UMBRO to a sub-brand, tying it with a particular product?
·         What if UMBRO becomes the subject of a non-exclusive licence?
You can get some idea of Iconix here
The questions are not so much for the prospective licensee, but more for the image and, allow me the drama, the integrity of the brand. I think it would be fair to say that UMBRO is very much a classic British football brand. So then, does this sort of (perfectly legitimate) disassociation of the brand from the business (particularly in the case of brands which find themselves at the hands of licensing businesses) draw the line of the limits of our 'modern' trademark systems? Because, as much as one may support the autonomous economic life of brands, the term 'origin indicator' does not really seem to fit quite right in this matter. Or is the advertising function of trademarks growing to consume its sister functions?     

1 comment:

  1. Here's a spin on the issue: what about the role of brands as cultural artifacts?

    From some angles a brand like UMBRO looks a bit like an artifact of national historical importance -- should it get the same special treatment that we extend to national heritage sites? What about a 'listing' system for culturally significant brands like with historically important buildings?

    (It would be a brand owners worst nightmare, of course.)