David Lammy talks to an international audience about the importance of trademark protection in helping businesses to come through the economic downturn.
Waldorf Hilton Hotel, London
26 March 2009
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Trade marks are important.
They benefit the people who created them.
They benefit the people who own them.
And they benefit all the rest of us, the consumers, by giving us a short-cut to understanding key things about a product or service – its origin, its quality, its cost.
We’re far from being the first generation to realise this. In fact, tradespeople have appreciated the value of making it clear that their merchandise is different from other people’s for many hundreds of years. From the European bell makers of the 12th century to the household names of today, marks have been used to made brands instantly recognizable.
People have also long appreciated the need to protect their marks from those who might want to counterfeit them in order to mislead consumers.
The earliest legal case of trademark infringement was probably the English Southern v. How case of 1618 in which a manufacturer of low-quality cloth gave it a mark reserved for top-quality cloth, and was duly sued by a competitor.
It was another type of cloth - sail cloth - that inspired Thomas Jefferson to suggest a US register of trade marks in 1791. But despite the calls for registers around the world, it was not until the late 19th century that they were created.
Since the setting up of registries, branding has spr6ead like wildfire.
A shopping trip these days will bring the prospective buyer into contact with tens of thousands of registered trade marks. Since the early 1980s, the Intellectual Property Office here in the UK has seen a steady 25,000 to 40,000 domestic registrations a year. This activity is critical to the success of our economy.
The recent study Valuing Brands in the UK Economy estimated that over 1 million people here are involved in the creation and management of brands. It found that 6 per cent of all investment in the UK is invested in creating those brands. Brands and their protection matter because they make money.
The value locked up in brands is now a key consideration in the sale or transfer of companies.
For example, when the Swiss company Nestlé bought the British Rowntree confectionary firm twenty years ago, it paid over £2 billion. That was far more than its paper value. However, Rowntree’s value lay not just in its products and its real assets, but also in a 250 year-old history. That and its handful of hugely successful brands offered enticing prospects of future sales.
The fact that brands, and other intangible assets, can have such enormous value should continue to drive all businesses – big and small – to think hard abo-ut how to get the most from them.
It’s even more important that they do this in an economic downturn. The most recent information from the IPO suggests that many British companies are now choosing not to protect their trade marks.
Trade mark applications last year were 12 per down on 2007. Similar falls are being experienced by trade mark registries elsewhere in the world.
But I’m convinced that it’s shortsighted for companies should not delay or give up registering.
Well-conceived and protected trade marks can help them through the bad times. When money is tight, many consumers will stick to products and services they know they can trust. Having registered brands or designs doesn’t just build a firm’s value, it also opens up potentially valuable avenues for licensing or franchising.
By registering their brands as trade marks, companies can safeguard the investment they have already made in their products. As I have said on previous occasions, a failure to register could harm British companies and the British economy in the longer term.
But I am acutely aware of the difficult conditions in which companies are now trading and I recognize that the Government must do what it can to make registration attractive. I can well understand that companies want a registration system that is flexible, affordable and makes good decisions.
You have already heard this morning about the public consultation on new fees and services that we have recently launched.
We hope that the proposals go a long way to ensuring that the UK registry is meeting the needs of business. I welcome the fact that the time taken to process applications for trade marks is the shortest it has ever been, and that it will cost less to register a mark in 2009 than it did 15 years ago.
In time, the UK and world economies will recover. When they do, the UK trade mark registry has to be ready to meet new demand for its services.
I also want to ensure that the European trade mark system does likewise.
Since the creation of the Community Trade Mark in 1996, and the establishment of the Office for the Harmonisation of the Internal Market, the EU has gained commercial advantage by being able to provide this simple unitary protection for brands across all of its vast internal market.
This system is already a success, as is indicated by the fact that it was possible to agree a cut in fees of 40 per cent earlier this month.
That’s welcome. But the time is probably now right for us to review the operation of the CTM as the Commission propose to do. We want them to kick this off as soon as possible.
I would like to conclude my talk this morning by touching on the role that trade mark attorneys and other IP professionals have to play. ITMA will have been in existence for 75years this year. Over that time, its members, and trade mark attorneys more widely, have helped businesses both register and protect their trade marks.
I was an IP lawyer myself, so I‘m admittedly biaised. But I still think that clear legal advice can take some of the mystery out of registration and make it easier for companies to navigate the process.
Regulation of ITMA under the Legal Services Act, and the role it plays in ensuring that members operate at the highest level, should reassure business. Whether we work in Government, as attorneys or as other IP professionals, we all have a part to play in ensuring that businesses keep their brands protected.
Thank you.
