Fresh eyes

What’s in a name? Trademark disputes, PR and reputation management

whats in a name
Simon Turner Freshfield Managing Director

Written by Simon Turner,
Chief Executive & Group Client Director at Freshfield

Sponsorship of Formula 1 is big business, billions of pounds worth, and is just one of the reasons Bernie Ecclestone can afford a £200,000 watch.

Now there is often controversy on the advertising regulations in Formula 1, especially with the often maligned tobacco advertising legislation, but over the past couple of weeks the big controversy has been the naming of the teams competing.

Lotus Cars, one of the nation’s most iconic brands, is going through something of a revolution at the moment. Historically a niche vehicle manufacturer only focusing on sports and racing cars, it recently announced ambitious plans to overhaul its current range and unveiled five new cars in front of an astonished audience in Paris.

As part of this, Lotus Cars will expand its current motorsport operations and re-enter Formula 1 from next season, as part of the Renault GP team. This is the first time Lotus Cars has had any involvement in Formula 1 since 1994 when it competed under the Team Lotus brand name. In later years, when the company was going through turbulent times, it sold the rights to the name Team Lotus to an independent party.

This is where confusion now reigns and where this famous brand is presented with a potentially tricky communications challenge.

As motorsport fans will be aware, the Lotus name was already used last season. The team that competed in the 2010 season was Lotus Racing, run by Air Asia owner, Tony Fernandes. Lotus Racing has recently purchased the rights to the brand name Team Lotus and had planned to race under that name in 2011, essentially meaning there would be two teams competing under the Lotus name.

Now, surely having four cars with the Lotus name attached is only a good thing, but how about one team consistently finishing at the back of the grid with car reliability problems. What does that do to the engineering reputation of Lotus Cars?

This may have entered the minds of Proton, the owner of Lotus Cars, which is now in dispute with Team Lotus boss Tony Fernandes over use of the Lotus name. It is pure speculation at this stage to suggest there will be four cars racing under the Lotus name next season, but one thing is certain, the battle will be played out very publicly, far wider than just Tony Fernandes’ twitter feed.

This of course is just one of the many naming battles in recent times. Arguably the biggest dispute lasted nearly 30 years and involved one of the world’s great brands, Apple Inc, and the Beatles-founded holding company, Apple Corps.

This dispute has done little to damage the Apple Inc. brand name as it continues to dominate the consumer electronics market. The damage it seems has been done to the lovers of Beatles music, who were only able to purchase Beatles albums on the Apple iTunes store in November, 2010.

For the past hundred years Budweiser, produced by Anheuser-Busch in America, and Budweiser, produced by the Budejovicky Budvar brewery in the Czech Republic, have been in dispute over their common brand name.

At a trade fair in 1911 a rather simplistic agreement was reached that Budvar would only sell its beer south of the Panama Canal and Anheuser-Busch wouldn’t sell its beer into Europe. Of course it was around this time that Anheuser-Busch expanded at a phenomenal rate and quickly became the largest brewery in the world.

Interestingly, the UK is perhaps the most fascinating market in this row. Great Britain is the only region where the registered trademarks Budweiser and Bud can be used by both breweries, resulting in Budvar aggressively targeting the UK market to expand sales.

This has culminated in an uneasy relationship between the two firms as the unresolved trademark rumbles on with Anheuser-Busch even trying, and failing, to purchase a stake in Budvar. Even though it seems a small annoyance to the Budweiser brand, I can’t help but feel Budvar is only too happy for this dispute to continue as Anheuser-Busch must cringe at the thought of people mistaking their Budweiser for Budvar, and taking that home instead.

That organisations are so determined to fight for the use of a trademark shows that without a recognised brand name, no matter how good the product or service is, the business will struggle. A great brand name doesn’t suffer from ambiguity – it’s something that people can instantly associate with the products or service offered, like sports shoes with Nike and Adidas, soft drinks with Coca Cola and Pepsi, and fast food with McDonald’s and Burger King.

It’s probably best left to Dany Bahar, CEO of Lotus Cars, to sum up the company’s current predicament. He said recently: “I have nothing against it. My personal opinion is that four Lotus brands out there is better than two.”

What is it people say about any publicity being good publicity?

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