Brand name piracy: does it matter?
A situation that has arisen for our own brand has led us to consider the wider issue of brand name piracy: the impact it has on a business, and why brands launched with copycat identities are such a thorn in the side of marketing and commercial teams.
As the Times newspaper’s MBA notes sets out:
“Branding is the collection of attributes that the consumer has come to expect from a product, which will strongly influence their buying patterns. Branding can be achieved using a company name – it can be applied generically or, as in the case of Kit Kat, on an individual basis. The brand name promises the consumer particular benefits, such as quality and value for money, with these expectations being built up over many years. A brand name is often considered by a company to be its most important intangible asset. In a market where repeat purchases are the key to profitability, a brand name becomes paramount to a product’s success.
“A catchy name and distinctive packaging are vital ingredients in any brand image, but the true essence of a brand identity lies in the consumer’s mind i.e. the perceptions of the product. A company must be constantly aware of these perceptions and try to preserve and build on them through advertising and other promotions. Branding enables marketers to build extra value into products and to differentiate them from their competitors.”
The designer knock offs black market is well known for brand name piracy: a hastily assembled LY in place of LV, Arnami jeans and Praha handbags are a common feature of pavement stalls the world over. Of course we all accept that there are worse aspects to these brand rip offs than the name; and no one really imagines that they are buying the real thing. Notwithstanding that, the luxury fashion houses spend a lot of time and money pursuing the manufacturers of these fakes and stamping out the practice.
No matter that we know the Venice pavement handbag isn’t Louis Vuitton, a worldwide flood of copies does nothing to enhance the desirability of the premium price original. Experts estimate that this practice leads to revenue loss amounting to billions for the real brands.
On the supermarket shelves, brand piracy is rife – not just in similar sounding names but also in use of font, colours, packaging shapes and other visual cues. The own brands are often guilty of this, and it has been known for them to shamelessly filch proprietary brand’s assets. Asda’s attempt to p-p-pick up a Puffin fell flat on its face when the courts sided with United Biscuits’ view that this was far too close to Penguin. Tesco’s own-brand version of I Can’t Believe it’s Not Butter earned them Unilever’s disapproval – and weirdly this very public legal battle has almost totally disappeared from the internet, implying that there were some pretty powerful legal rulings put in place.
It’s not just the small or copycat brands who piggyback, either. The American megabrewery Anheuser-Busch lost the right to use the brand name Budweiser in the European Union after a long legal battle with Czech brewer Budejovicky Budvar. It wasn’t easy though – this is a legal fight that has been going in in various shapes and forms since the 1870’s.
The easyGroup (best known for its easyJet brand, just one of the 17 it uses to market a wide range of services) has recently taken a Northampton curry house to court, following the restaurant’s rebrand to the name ‘easyCurry’ in a garish shade of orange. Other companies who have felt the weight of Stelios’s wrath include a drinks brand, a coach company and a European financial services company.
So keen to stamp out brand piracy is the easyGroup that one of its key menu items on the group website is entitled ‘brand thieves’ and contains the warning:
“Some people think they can make a fast buck by stealing our name and our reputation… if you see a company that you think is disguising itself as an easyGroup company or that is trying to piggyback off our brand in any way, then please help us to protect both the consumer and our brand. Please email any information to domains@easyGroup.co.uk and indicate if at any stage you have been under the impression that this was a genuine easyGroup company set up by our founder and chairman Stelios. Evidence of confusion helps our case.”
This is followed by a set of case studies detailing how the group has taken brand pirates to court and won. Attempting to steal the easyGroup’s brand profile is, it seems, not for the faint hearted – nor indeed for the wise. In fact, most large companies will not hesitate to take piggybackers to court, since any evidence of brand copycatting – however irrelevent – often has to be visibly stamped out in order to assert the authority of the original brands.
The internet is rife with name disputes. Lastminute.com narrowly squeaked into being allowed to use its brand name in Germany, where Last Minute is a generic industry term. Well known is the practice of buying up likely url’s and then trying to sell them back to their probable owners for a large sum. Some companies are willing to meet the brand url hijackers’ demands, others refuse to be blackmailed (20th Century Fox did not decide to rebrand to 21st Century Fox, so the guy who had bought that URL did not make the $40k he’d demanded). It’s not all about money – in Spain, a man who is angry about the inequality of the national water supply is ’squatting’ on four government department names until the government addresses his concerns.
But why does it matter so much? After all, if a company is smaller, or different, or considers itself to be clearly separate from the company whose brand it’s copying, then is it really going to affect the original brand’s position?
Well, in most cases, yes it is. And it’s not just the big boys it effects – in fact, small and mid sized companies are as likely to fall victim to brand piracy, but with fewer resources available to tackle it.
The first brand has built itself up from scratch. In order to be recognisable enough to be worth piggybacking, it’s clear that the brand strategy and budget has worked well. As we all know, a brand is not just a name or colour – it’s a perception, a marque of quality, a clearly defined area of understanding. Now, if another product or service muscles in on that space, it has the impact of pushing the space around a little, distorting consumer perception, slightly buggering up the original brand’s strategy. In short, it makes life harder for the original brand and for its consumers. If the pirates and the original are operating in the same space, it can be hugely damaging to the original brand, which simply isn’t an ethical way to get a cheap step up the ladder.
To be quite frank it’s not ideal for the brand pirates either, leaving them little room to expand or adapt independently of the host brand’s own strategy. At best, they will find themselves hidebound by the original, and at worst, the wrong end of an expensive, time-consuming and unbalancing legal battle that will force them to take their eyes of their own business growth.
For small and medium sized victims of this copy catting, there often is simply neither the budget nor the time available for them to tackle the problem head on. Their options are to devote budget which would otherwise be spent on marketing, R&D and staff salaries on pursuing a legal case, or to ignore the issue and try to move on, encumbered by this constant new threat to their brand position. Having spent a lot of money on building up a brand, having created a clear recognition in their marketplace, the original company then has to defend its position. Clearly, this is morally unacceptable; but sadly not unusual.
The fact is that, in life, imitation is billed as the sincerest form of flattery. For the imitated it’s no less irritating for that, but usually best ignored. In business, it’s hugely damaging – it can lose people their jobs, make companies go under, kill previously healthy markets. It simply cannot be ignored.
So yes, brand piracy does matter. Hugely.
