Reference no: EM131052670

CASE

Areputation is a fragile thing-especially on the Internet, where trademarked images are easily borrowed, corporate secrets can be divulged anonymously in chat rooms, and idle speculation and malicious commentary on a blog can affect a company's stock price. Brands are under constant attack, but companies such as Brand Protect, Mark Monitor, and Name Protect (now part of Corporation Services Company) are stepping in to offer companies some artillery in the fight for control of their brands and reputations. Brian Maynard, director of marketing for Kitchen Aid, a division of Whirlpool, had a rather unique problem. Like the classic Coke bottle and Disney's Mickey Mouse ears, the silhouette of the Kitchen Aid mixer, that colorful and distinctively rounded wedding registry staple, is a registered trademark.

Although the Kitchen Aid stand mixer silhouette has been a registered trademark since the mid-1990s, it has been a well-recognized symbol since the current design was introduced in the 1930s. "The Kitchen Aid mixer is an incredible asset so it is important for us to protect both the name and the image from becoming generic," says Maynard, who reports that the equity of the brand has been estimated to be in the tens of millions of dollars. Any kind of violations that go unnoticed can quickly erode that precious equity. Kitchen Aid had experienced some problems on the Web with knockoffs and unauthorized uses of the mixer's image, but getting a handle on the many and varied online trademark infringements seemed daunting.

Maynard knew that historically, corporate brands that were not well-protected and policed by their owners had been ruled generic by the courts-aspirin and escalator are two examples. "Throughout history terms like escalator and aspirin have become generic simply because people did not do the work to protect them," says Maynard. "To avoid that fate, you have to show the courts that you have put every effort into protecting your brand. If you don't police your brand, courts will typically rule that the mark is no longer meaningful and has become ubiquitous." So when he received a cold-call from Brand Protect, he was intrigued. Criminals hijacking online corporate brands and masquerading for profit, however, are ramping up their efforts. Dubbed "brand jacking" by Mark Monitor Inc., a San Francisco-based brand protection service provider, the practice is becoming a major threat to household names. "Not only is the volume of these abuses significant, but abusers are becoming alarmingly savvy marketers," says Frederick Felman, Mark Monitor's chief marketing officer. In its first Brand jacking Index report, Mark Monitor tracked 25 of the top 100 brands for three weeks by monitoring illegal or unethical tactics that ranged from cybersquatting to pay-per-click fraud. Media companies made up the greatest percentage of targeted brands. Cybersquatting, which usually means registering a URL that includes a real brand's name, easily took the prize for the most threats. Mark Monitor tracked more than 286,000 instances in the three-week span. "When I heard about the solution I didn't even realize there was anything like that out there," says Maynard.

"I saw right away that it solved a problem I didn't even realize existed." Brand Protect uses a technology platform that functions like a giant spider, mapping the Web and identifying what's going on in its darkest recesses. The mapping technology is combined with a filter and human analysis component that identifies and returns to its clients actionable data on illicit activities that may adversely affect their corporate identity. Depending on the client's chosen service level, those activities can include any of 22 categories of infractions-from phishing to counterfeiting, misuse of corporate logos and trademarked product images, domain infractions, and employees blogging about corporate trade secrets. Staying ahead of the many ways that a company's brand can be compromised or diluted online is a challenge that Kevin Joy, vice president of marketing for Brand Protect, compares to a never-ending game of Whack-a-Mole. The challenge of brand protection, however, has grown exponentially for companies operating in the online world. "With the advent of the Internet a few things happened," explains Maynard. "Everyone in the world could now see the mixer so the potential for misuse of our trademark became greater. Because it is so well known, there was more risk of companies creating knock-off products and marketing them under other names. So it was even more important than ever to prove that we were putting every effort into protecting the brand and our trademarks."

Other types of violations also surfaced as Kitchen Aid's online policing activities grew. Some, such as sites using the logo without permission, were minor and could be easily fixed with a warning letter. Others were not so innocent, such as using the logo to create links to illegal sites. "We spent a lot of time training people and policing online activities," says Maynard. The many successes have made the relationship worthwhile. Recently, Maynard was impressed by how quickly he was able to resolve a case of domain infraction. A small vendor that works with Kitchen Aid was experimenting with registering URLs such as shop kitchen aid.com and buy kitchen aid.com for marketing purposes. That Friday when Maynard received his report, he noticed the new URLs, recognized the name of the owner, and called his contact at the company to explain that any URLs containing the name Kitchen Aid had to be owned by the company. Maynard says his contact was shocked by how quickly Kitchen Aid had gotten on top of the issue. "He didn't even know he couldn't have ownership of that URL and was stunned that we knew about it so quickly." Given the strategic importance of the Kitchen Aid brand, Maynard says BD-Brand Protect has played a major role in bringing him peace of mind. "It is my responsibility to protect this brand and I am not going to allow any loss of equity on my watch. In fact, the value of the stand mixer silhouette continues to increase year after year. Before BD-Brand Protect, however, I thought I was out there doing it on my own. Now I know I can leave the brand in better condition than when I started."

As Manager of Brand Standards for the Royal Bank of Canada, Lise Buisson knows that the job of protecting the bank's brand online involves a lot more than finding out when someone has cut and pasted a logo onto their site without permission. "As brands become more valued, any improper use of your brand can become a reputational risk. When someone displays your logo, for example, it becomes a de facto endorsement, whether we have approved it or not. We have to be careful about things like that." Royal Bank of Canada and its subsidiaries operate under the master brand name of RBC. With 70,000 full- and part-time employees serving 15 million clients through offices in North America and 34 countries around the world, RBC is the largest bank in Canada. "We didn't expect to see what we saw. We were inundated. No one realized how easy it was for someone to come to our site, grab a logo, and put it somewhere else. It forced us to sit down as a group and figure out what we could do," says Buisson. She quickly discovered that a majority of the infractions noted were harmless and did not require a second thought. "In most cases the users were well meaning," she says. "It could be a charity site or mortgage partner using our logo.

I would say that 90 percent of these incidents were quite harmless." "BD-Brand Protect immediately flagged and dealt with a bank in the North Sea region that had used our logo and positioned themselves with another name. When anyone misrepresents themselves as an affiliate of ours, it makes us very nervous," notes Buisson. Where concerns are raised, RBC will take the appropriate measures, from issuing a polite request to the user to cease using their brand to initiating legal action. "In the vast majority of cases a polite letter is enough." Once a year, RBC reviews its branding policies to ensure that the reports continue to reflect their top priorities. It has also established a number of policies to ensure that the appropriate follow-up measures are used when required. "If, for example, we find advertising of our logo on a gambling site, we now have a policy about that," she says. Buisson says that as Internet activities continue to escalate, she has come to realize that the job of monitoring online brand activities properly would just have been too much for departmental staff to handle. "I'm a big proponent of going to the experts and sitting down and working with them. It's very reassuring to work with a company that's looking out for us. It certainly helps some of us sleep at night."

CASE STUDY QUESTIONS

1. Consider your own online shopping patterns. How much weight do you place on the presence of a name or logo or other trademark (such as the Kitchen Aid silhouette) on a Web site when purchasing goods or services? Do you ever stop to consider whether you may have been misled? How could you tell the difference?

2. Brian Maynard of Kitchen Aid notes that the development of the Internet changed the problem of brand policing. What are some of these changes? What new challenges can you think of that did not exist in the pre-online world? Provide several examples.

3. The companies mentioned in the case (e.g., Kitchen Aid, RBC, Disney, and Coke) were well established and enjoyed strong brand recognition well before the advent of the Internet. Do you think online-only companies face the same problems as they do? Why or why not? Justify the rationale for your answer.