Part # 2: More On Protecting Your Brand Against New Forms of Online Infringement and Challenges

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Here is the 2d part of my video interview with the Cornell eClips program on brand protection on the Internet. Part 1 of the interview is here.

Q. What Are Some More Low-Cost Suggestions for Dealing with Online Infringement?

A. You may want to pay the infringer to migrate elsewhere; a payment sounds counter-intuitive but the money you spend may be less than the cost of a lawsuit. Think also about entering into a co-existence agreement with the infringer restricting it to certain territories or marketing channels that don’t compete with yours. But be careful that the territories or channels you agree to stay out of don’t compromise your possible future expansion.

Further, consider about having the infringer agree to a gradual name change where the infringer agrees to immediately cease making certain uses of the infringing mark (such as on printed materials or on the web) and some time later agrees to cease making any use of that mark. Another option to consider (which requires you 1st develop some trust with the infringer) is to license the infringer the use of the mark for a limited time in return for a reasonable royalty.

Q. How Should Brands Deal With and Control Fan Sites?

A. Try controlling fan sites with a carrot not a stick. If your fans have posted your trademarks on their site without your permission, there are benefits if you embrace them. That’s because fans are often your most enthusiastic and loyal customers.

Here’s an example of the carrot approach. A few years ago two 29-year old Coke users started a Coke fan site on Facebook.  After the site attracted a million fans, Facebook administrators asked Coke if it wanted to take over management of the page.

Coke said no. Instead the company invited the page’s creators to Atlanta for a few days and thereafter Coke and the creators agreed to collaborate in managing the page.  By October 2010, the site has more than 3.4 million fans. For more on Coke’s response to the fan site, click here.

Another carrot-like approach is to give your fans some special benefits like access to unique content and preferred seating and recognition at company-sponsored events. Or you may, as Starbucks has done, open your wall on Facebook to fan posts.  But be wary if your fans start using their site to sell your products; that could lead to pricing and quality control issues, among others.

Q. How Do You Decide When and How to Respond to Brand Attacks?

A. There are a number of criteria you may want to examine. Is the attack damaging your bottom line and negatively impacting your ability to market your brand. If you are an Internet merchant, web analytics can detail any damage. Who is launching the attack? Is it a well-financed competitor who has designs on your market share? What’s your p.r. risk if you fight back? Keep in mind that even the smallest mom & pop can use the Internet to fight back. Overreaction can mean loss of goodwill and damage to your reputation and brand image.

Here’s an example of what you may not want to do. Last year Greenpeace attacked Nestlé for buying palm oil (a key ingredient of their Kit-Kat bars) from companies that destroy the rainforests. In response Nestlé got feisty on Facebook. In response to one consumer post, Nestlé pronounced:

“Thanks for the lesson in manners. Consider yourself embraced. But it’s our page, we set the rules; it was ever thus.”

When the consumer raised a concern about freedom of speech, Nestlé replied:

You have freedom of speech. Here there are some rules we set. As in almost any other forum, it’s about keeping things clear.

The consumer responded:

Your page, your rules true and you just lost a customer. Won the battle and lost the war. Happy?

When news of this and similar interchanges spread on the Internet, Nestlé went into damage-control mode posting Facebook updates defending its use of palm oil. When that didn’t quell the furor Nestlé reduced its dependence on palm oil and partnered with a non profit that helps businesses develop sustainable forest harvesting practices. For more on the Nestlé response click here and here.

The lesson is you can’t control the conversation on your social media page and you shouldn’t  try.

Q. Let’s Switch The Focus Now To Online Infringement, How Do You Decide When And How To Respond To This Problem?

A. There are some kinds of online infringement that you almost cannot ignore. They include counterfeiting, pre-released content, impersonation and conduct that tarnishes your brand or reputation. But think twice if the infringer is simply using your mark or logo in a non-commercial context and walk away if the other side is using your mark as part of a product review or critique, especially if it’s truthful. Here’s a chart John Slafsky at Wilson Sonsini prepared for use in a presentation we did at an IP Forum for Advertising Counsel that may help.

Also think about adopting a holistic approach. Have your PR, legal, marketing and senior executive together before deciding how to respond and then determine the result you are seeking and why.

Think also about getting your own house in order before you attack others. Defendants accused of trademark infringement may want to turn the tables and demonstrate that plaintiff is committing the same practices. That defense, which was asserted against on one of  our clients recently, can more than blunt your attack.

Other suggestions for dealing with these issues are welcome.

I will be posting the third and final portion of the hard copy of my interview with the Cornell eClips program shortly. Want to view the Cornell eClips Collection?  The Cornell community may access the collection through (Net ID required) and others may view the collection through eClips’ publisher, Prendismo; please click here for more information.

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