Warren Buffett’s wisdom rings true: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” As an expert witness in trademark cases and a veteran brand consultant, I’ve seen the profound truth in these words. However, in today’s digital age, even five minutes seems generous.
Early in my career, I had the privilege of meeting Walter Landor, founder of the iconic brand consultancy that bears his name. During my more than 20 years with Landor, consulting for renowned brands across categories and continents, we always began our client conversations with his famous quote: “Products are made in a factory. Brands are built in the mind.” This simple yet profound insight has guided my work with some of the world’s most recognizable brands and remains more relevant than ever in our digital era.
In our current landscape of social media and viral content, a brand’s reputation — its most valuable asset — can be severely damaged in mere seconds. Add the intensifying power of AI-enabled software, and the challenge becomes even more complex. Today’s brands must think differently about reputational risks and prepare accordingly.
The recent lawsuit filed by Starbucks against Starbucks Workers United alleging trademark infringement highlights this need for vigilance. The case, which centered on the union’s use of a logo allegedly similar to Starbucks’ famous mermaid, underscores the importance of proactive trademark protection.
Josh Dalton, head of the trademark litigation practice at Morgan Lewis & Bockius, offers an insightful perspective: “Trademarks as such aren’t really what belongs to companies. Their goodwill belongs to them. Their reputation belongs to them …. Trademarks are a proxy for those things, and trademark law gives companies the right to avoid consumer confusion that a similar trademark might cause, but not to prevent any mention of a company or its products at all. It highlights the limitations of trademarks in protecting a company’s reputation.” This observation underscores the complex relationship between trademark law and reputation management. While trademarks are crucial tools for brand protection, they are not all-encompassing shields against reputational damage, particularly damage caused by clearly negative opinions about a company.
Dalton further elaborates on the evolving landscape of trademark enforcement: “Especially in today’s world of social media, when considering whether to enforce a trademark, you must take a ‘what if’ lens to the situation, even if the other company is not in a directly related business. In other words, ask ‘what would happen to our goodwill if the other company went viral for the wrong reasons?’ because people aren’t necessarily going to bother to segment the market that clearly.”
This “what if” approach is crucial in our interconnected digital age. Companies must consider not just the immediate threat of confusion or dilution, but also the potential for future reputational damage, even from seemingly unrelated sources.
Many cases I’ve been involved with concern companies that have not systematically protected their brand trademarks. Instead, they’ve acted only after infringement has caused reputational damage. Once this damage occurs, undoing it is often impossible, especially when negative information spreads rapidly and persists indefinitely online.
The best strategy, therefore, is to be proactive rather than reactive. This means being vigilant in protecting brand trademarks from the outset. Proactively registering trademarks, monitoring for potential infringements, and taking swift action when necessary, can help protect your goodwill as well as prevent reputational damage before it occurs. It’s also critical to have a crisis communication plan ready to respond effectively to any issues.
Dalton emphasizes the importance of this proactive approach: “It’s harder to assess risk today than it was say ten years ago. You can’t just look the other way if an infringement seems small or local, because even if it’s just a single small shop in a small market using your name, their mistakes can go viral and do big damage on a national scale.”
This heightened risk environment requires companies to be more vigilant than ever in their trademark enforcement efforts. They must carefully weigh the potential for reputational harm against the costs and complexities of enforcement actions.
The Starbucks case reminds us that even when a settlement is reached, the potential for reputational damage remains. The confidential nature of the settlement terms may lead to ongoing speculation and discussion, underscoring the need for brands to be proactive in protecting their trademarks and managing their reputations through effective communication and stakeholder engagement.
In today’s fast-paced, interconnected world, proactive trademark protection and reputation management are more critical than ever. By safeguarding their brands, companies can position themselves for long-term success and resilience in an ever-changing business environment. The lessons from Buffett and Landor remain relevant: in the digital age, an ounce of prevention in brandprotection is worth far more than a pound of cure.
This article appeared in The Intellectual Property Strategist, an ALM/Law Journal Newsletters publication that provides a practical source of both business and litigation tactics in the fast-changing area of intellectual property law, including litigating IP rights, patent damages, venue and infringement issues, inter partes review, trademarks on social media – and more.