The problem?
A dispute arising over the Del Monte trademark, which according to Food & Drink Weekly in June 2008, is co-owned by both Del Monte Pacific Ltd and Fresh Del Monte Produce Inc. Fresh Del Monte had accused Del Monte Pacific Ltd of selling products in areas that it controls. A thorny issue over which Fresh Del Monte Inc had filed complaints in 2006, 2007 and 2008.
Looking back over the years, one sees a commonality in legal cases involving trade marks that have found their way to the courts. In September 2009, McDonald’s lost an eight-year trade mark battle that it had waged against McCurry, a restaurant in Malaysia. The restaurant was allowed to use the ‘Mc’ prefix by the country’s federal court, according to an article in The Daily Mail, “McCurry, the restaurant that defied the Big Mac wins eight-year battle”. In Singapore, the fast food giant was embroiled in a legal tussle as well, when it took Future Enterprises Pte Ltd to court after the latter applied for the marks “MacCoffee”, “MacTea”, “MacChocolate” and “MacNoodles” in 1994 and 1995, as reported in a case study featured on the Intellectual Property Office of Singapore’s website under the section of “IP Bulletin” as obtained on 6 November 2009. The lack of differentiation in the trademarks has fueled many a legal action in the past, and will surely continue to do so in the future. The solution to avoiding trade mark disputes is a simple one: Creating original and innovative trademarks.
‘Innovation’ and ‘originality’ are the often repeated buzz words in our 21st century modern economy. Be it the service industries, to IT or manufacturing, innovation and originality are touted to be the main drivers of progression and enterprise. According to a BusinessWeek article, “Innovation: Singapore Is No. 1, Well Ahead of the U.S.” dated March 16, 2009, Singapore is the top ranked country among a survey of 110 countries worldwide when it comes to government policies and corporate performance conducive to innovation. The United States trails behind in the eight spot while South Korea comes in second place. The results of this international survey highlight the emphasis placed by Singapore on innovation in the business world. The Merriam Webster dictionary defines “innovation” as “the introduction of something new”, or “a new idea, method, or device”, while “originality” is defined as the “freshness of aspect, design or style” and “the power of independent thought or constructive imagination”. These definitions concur with the idea of thinking out of the box and are all important factors to consider in the design or creation of a trade mark. In a world where competitors lurk in every shadow waiting for any opportunity to overtake the market leader, branding becomes ever more important in establishing a brand’s overarching market dominance. Through the creation of an original and distinctive trade mark, brands can not only distinguish themselves in the minds of the consumer, they will also be able defend against aggressive imitators.
With this as an impetus, the first ever national study on brand building and trademarks in the Singapore food manufacturing industry was conceived. It was conducted by global brand strategy consulting firm, StrategiCom, and jointly supported by Singapore Food Manufacturers’ Association and SPRING Singapore.
The objective of the research study was to find out if Singapore food manufacturers were leveraging on their trademarks to grow their businesses in key markets. These food manufacturers were asked a series of questions pertaining to their company policy and attitudes on establishing brands through trademarks, as well as the extent of their marketing activities.
The following points were used as a yardstick of measurement:
1. The extent that Singapore food manufacturing companies go to ensure the uniqueness in the creation of a trademark.
2. The percentage of companies that register their trademarks in all relevant markets of trade.
3. The extent to which Singapore food manufacturers have gone to promote their trademarks in all their relevant markets of trade.
4. The extent of efforts that Singapore food manufacturers undertake to enforce their rights in their trademarks – in the event of breach.
It was discovered that 54 per cent of local food manufacturers would select colours and designs that looked like their competitors’ before creating a brand, while 57 per cent selected colours and designs akin to famous brands. The results of the national study evoke this pertinent question – do food manufacturers in Singapore focus enough on innovation and originality in building their brands?
Group Principal Consultant and CEO of StrategiCom, Dr Wilson Chew said, “The results of the survey indicate that the majority of Singapore food manufacturers do not emphasise on innovation and originality when building their brands. This can be dangerous, especially when their products have trade marks similar to leading brands in the food sector. In a grave situation, it could be viewed as passing-off which could lead to possible legal implications. In a mild situation, the brand could potentially assimilate not only positive associations of brand leaders, but may also pick up the negative connotations as well. It is not wise either way“.
Another example of such a legal implication occurred when AW Holdings Group applied for a registration mark on 11 May 2004, "Booster Juice" according to a report featured under the section “Legal Decisions” on the website of the Intellectual Property Office of Singapore obtained on 6 November 2009. Boost Juice Holdings Pty Limited, the Singapore proprietors of the mark "Boost" objected. Both parties sold similar products and a legal decision was finally reached in 2008. AW Holdings Group was not allowed to proceed with the registration of the mark “Booster Juice”. Yet again, this case clearly demonstrates the risks of creating a trade mark that is not clearly differentiated and distinguishable from the rest of the competition.
In addition to creating a differentiated trademark that is original and innovative, it is also important for companies to register their trade marks, market them and enforce their rights to protect their trade marks from imitators. The survey showed that with regard to statutory protection, 60 per cent registered their trademark in some or all of their overseas markets and 83 per cent registered their trademarks in Singapore. Encouragingly, most food manufacturers do obtain and ensure their legal rights when it comes to safeguarding their trade marks and 76 per cent monitor companies for unauthorised use of their trademarks. When it came to enforcing their legal rights with regard to their trademarks, it was discovered that 14 per cent of respondents had opposed the registration of a similar trade mark in Singapore and 16.2 per cent had opposed the registration of a similar trade mark overseas.
It can thus be inferred that the majority of Singapore food manufacturing companies do recognise the importance of trade mark registration. However, it was revealed that these same manufacturers did not extensively market their trademarks to maximise commercialisation efforts.
Dr Chew said, “While most food manufacturers do take steps to gain access to rights accorded by legal protection, these rights may be weak if manufacturers create trade marks which resemble leading brands." He added, “To distinguish their brands, food manufacturers need to create differentiated trade marks, and proactively engage in marketing activities that can promote their brands and trade marks to clients in their chosen markets. This would go a long way in establishing the brand as a key player in the target market. And brand recognition among the general public would provide greater credence for exercising one’s legal rights in enforcing one’s trade mark in the event of a breach.”
The creation of an original and innovative trade mark is a vital step in building a brand of value. Frequent and consistent communication featuring the trade mark plays an important role in brand building as well.
Responding to a question on how Singapore companies can develop their trademark even further, Dr Chew said, "There are basically two components needed to build a strong brand - the right strategy and excellent execution. Both are important but strategy must come first. Singapore food manufacturers can take a deeper look at their strategy. And strategy is all about differentiating the brand from its competitors. Our findings from this national research study has in fact, encouraged us to look at the dual topics of innovation and originality in greater detail, which is something which we will focus on in our next research study."
Aside from establishing the importance of originality in creating a trade mark that is clearly differentiated from its competitors, the national research study on Singapore food manufacturing companies are of particular significance to small and medium enterprises. It allows them a special insight and provides them with the outline of a brand strategy that would allow these enterprises to distinguish their brands and products from the multinationals dominating the market. Just as originality is the key to creating a good trade mark, brand building is the key to unlocking the gateway to market dominance and leadership.
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