Media trust workshop brand partnerships

© 2012 Innovate Legal Services Limited

Corporate Partnerships

Garry Mills

Head of Trade Marks and Brands

Innovate Legal

Media Trust Brand Protection Masterclass

26 January 2012


Overview

1. Introduction

2. Potential benefits/risks of partnerships

3. Examples of recent corporate/charity partnerships

4. Outline of a partnership

5. Conclusions

6. Case Study


Introduction

Examples of Recent Projects

• collaboration agreement between an environmental charity and well-known retailer, including brand licence

• helping a health charity to create and protect a “certification” logo to be licensed to commercial partners

• Advising a charity on development of a software product and on licensing it to sister charities

• Advising an employment charity on collaboration with a major ISP


Potential Benefits and Risks of Partnerships

Potential Benefits

- revenue- access to partner’s markets, customers and contacts- employee motivation- brand visibility- other benefits

Potential risks

- unsuitable partner / damage to reputation- loss of control of brand- costs- other risks


Examples of Charity and Corporate partnerships

Case study 1: RNIB and Microsoft strategic relationship:

Source: RNIB website (www.rnib.org.uk)


Examples of Charity and Corporate partnerships

Case study 2: National Trust and Fired Earth

Source: National Trust website (www.nationaltrust.org.uk)


Evaluating IP / Identifying Partners

What IP does the charity have that could benefit a commercial partner?

• Brand name/logos/slogans etc consider creating a new “bespoke” logo/sub-brand for licensing

• Know-how, content and expertise

• Software and other IP assets

Who are suitable potential commercial partners?

• likely to depend on the charitable sector concerned


Protecting IP

Once the Charity’s key IP has been evaluated, essential to consider the options for protection.

If the Charity’s brand or other IP is not protected:

- Increased risk of 3rd party misuse or “squatting”

- Less attractive for potential partners: concerns about “piggybacking”

Important to ensure that key IP is properly protected to ensure exclusivity.


Protecting IP

There are two forms of protection for IP

- Registered

- Unregistered

For some kinds of IP, unregistered protection arises automatically.

However, the most effective method of protecting IP is by registration.


Protecting your Brand

In particular, registering brand elements is highly advisable:

Enforcing registered trade marks is usually easier and less costly than enforcing unregistered rights.

Absence of protection may discourage corporates from partnering.

Consider protecting key brand elements:

Names, logos, slogans and colour schemes are all registrable



Important considerations:

• Trade marks are registered for specific goods and services

best to protect brand not just for core activities but also for potential partner’s activities

• Trade marks are national rights

UK or international trade mark protection needed?

• Costs of registration

Professional help is advisable



IP Enforcement

Once registered, use the (R) symbol to deter third parties from misusing.

Act swiftly against infringers. If action is delayed, legal rights may be weakened or even lost altogether: “brand genericide” (e.g. ASPIRIN, ESCALATOR and ZIPPER).


Agreeing Terms of a Partnership

Essential to record terms in writing.

Advisable to involve lawyers in drafting agreement.

Expect to negotiate.

The terms of the agreement will depend on the parties’ commercial deal, but many terms are typical...


Standard terms (1)

Subject matter:

- Which rights are covered?

- Important to specify which rights are in/out

Scope:

- Exclusive, non-exclusive or sole?

- Field of use?

- Form of use?


Standard licence terms (2)

Ownership of newly created IP

- who owns and who can use?

Territory

Other restrictions or obligations, e.g.:

- Number of manufacturing sites / products allowed.

- Any obligations on charity to provide assistance.

- Quality /ethical standards


Standard licence terms (3)

Duration and Termination

- Time limited or perpetual?

- Rights to renew: automatic or conditional?

- Rights to terminate early for breach

Payments

- calculating payments

- payment terms: e.g. guaranteed minimum payments?


Valuing IP

If the proposed partnership involves royalty or other payments:

- what is it reasonable to expect a corporate partner to pay for the use of the charity’s IP

- how to justify the amounts?

Usually agreed by negotiation between the charity and partner.

If parties’ valuations differ, consider expert brand valuation.


Valuing IP

IP valuation

Uses- often used in litigation for calculating damages- used for many years in corporate accounting and taxation matters

Usually carried out by specialist consultants

Can be expensive- only likely to be justified for very significant brand partnerships

By its nature, brand valuation is subjective.


Valuing IP

3 main brand valuation methods:

• Cost approach- cost of creating or recreating the rights (may undervalue charity brands)

• Market approach- estimate value by reference to comparable transactions (may be fewer comparables with charity brands)

• Income approach- earnings approach- relief from royalty approach

Other relevant factors: brand’s track record, strength of the brand etc.


Valuing IP

There are pros and cons with each approach.

The different approaches may well yield different results.

The more information available to the valuer (e.g. comparable transactions), the more accurate the valuation is likely to be.

Comparable transactions in the charity sector concerned?

Ultimately, the right to use IP is only worth what a partner is prepared to pay.


Outline of a partnership

Other important considerations:

How to identify suitable potential partners

How to locate the relevant individual within an organisation

Questions to ask


Conclusions and some steps to take now

Have an IP strategy:

- list key brand names, logos, slogans and other intangible assets- ensure these are registered where feasible- tackle infringements

Monitor/record comparable transactions for valuation purposes.

Research carefully potential corporate partners.

Ensure partnership terms are in writing.

Take specialist advice on brand protection and drafting any agreements.


Case Study

Facts:

You are a children’s health charity. You receive an approach from Tesco to take part in a joint campaign. They will produce a “Barnaby Bear” teddy bear with your logo embroidered on the bear’s T-Shirt. For each bear sold, you will receive £1. Tesco want you to agree exclusivity for an initial 3 year term.

Consider:

1) Brand registration/ownership issues2) Payment terms3) Is the 3 year term reasonable?4) Questions to ask


Thank you for listening.

Garry Mills

Head of Trade Marks and Brands

Innovate Legal

107 Fleet Street

London

EC4A 2AB

Tel: +44(0)20 7936 9239

Fax: +44(0)20 7936 9111

Email: [email protected]

www.innovatelegal.co.uk

Business

Media trust workshop brand partnerships