Brand Afterlives

No Time to Die

In the view of Ravi Ravindran, managing partner, Ravindran Associates LLP (Singapore), many brand owners fail to consider how the valuable brand of an ailing business can be revitalized.

“There’s money to be made in death. While trademark professionals don’t like to talk about the mortality of a brand, they should have a long hard look at these marks. There are ways to continuously monetize them,” he said. The key for both the brand owner and a potential acquiring party is to identify those brands that can have a successful afterlife. If the company does not want to use a trademark any longer, there are creative opportunities to commercialize it, including selling or licensing the brand.

While a true brand rebirth is rare, it is possible to revitalize a once-stagnant brand. As Raka Roy, head of Intellectual Property and Data Protection at Galadari Advocates & Legal Consultants (United Arab Emirates), noted: “A brand may have completely lost its commercial and market presence as a result of the product being phased out from manufacturing and distribution. But such brands still hold a recall value in the mind of consumers. Based on the level of this recalling power, a dead brand can be resurrected.”

Take Polaroid Corporation (US), for example. In 2008, the company behind instant low-resolution photographs filed for bankruptcy and ceased production of its films and cameras in the face of the overwhelming competition posed by digital cameras. But when The Impossible Project (Netherlands) bought the brand in 2017, it successfully revived it by tapping into a nostalgic trend for retro mechanical cameras.

Elsewhere, children’s toy manufacturer Toys “R” Us, which filed for bankruptcy in 2008, is a comeback kid. It was given another lease on life when its new owner, WHP Global, (US) licensed the brand to retailer Macy’s in 2021.

In another example, Sega Corporation (Japan) was facing bankruptcy and potential death after being eclipsed by Nintendo in the gaming market in the 80s and 90s. But in 1999, Isao Okawa, the then-president of Sega, announced that the company would be shifting its focus from hardware to software. After initial turbulence, the company revived in a new guise, and has gone on to dominate network-enabled trading card games and satellite game machines, as well as arcade games.

But as Ms. Roy observed, there must be an attractive proposition attached to a dead brand before any revival is attempted. “It is important to analyze exactly how much damage has been done and what’s the level of recall value the market still has toward it,” she said.

In some scenarios, reviving a dead brand can be a logical route for a company to take, according to Brett Kensett-Smith, a senior manager at EverEdge Global (Australia), which evaluates companies intangible assets.

Offering an example, he noted that the AMPOL petroleum brand, formerly known as Caltex Australia, succeeded in breathing life back into a dead brand.

Ampol operated petroleum service stations in Australia between 1936 and 1995. When it merged with another petroleum company, Caltex, it was rebranded to Caltex in all major urban centers. However, a few Ampol stations remained in small country towns throughout Australia, retaining a degree of brand recognition with consumers.

Chevron Corporation (US) had 50 percent ownership in Caltex Australia, and when it sold its stake in 2015, it licensed the brand to Caltex Australia. But four years later, Chevron gave notice to Caltex Australia to terminate the Caltex trademark license agreement. Subsequently, Caltex Australia revived the AMPOL trademark and in 2020 began rebranding all local Caltex stations as Ampol.

“Interestingly, it is estimated that Caltex Australia (now trading as Ampol) is now saving around US $20 million per year in licensing fees,” explained Mr. Kensett-Smith.

Eternal Muse

In another example, few brands evoke the luxury and 60s-era glamor of international travel than U.S. airline Pan Am, meaning that its brand recognition has endured long after it stopped functioning as an airline in 1991.

Currently, Pan American World Airways, Inc. Licensing Program holds the rights to Pan Am’s word and logo trademarks, and it works with partners to create newly minted Pan Am products.

“Pan Am was so famous and so iconic for so long—and lives on in popular culture—that the equity of that brand will probably never go fully to zero,” suggested Paul Earle, principal of branding firm Earle & Company (US) and an adjunct lecturer of Entrepreneurship and Innovation at Kellogg School of Management (US).

“From a brand perspective, it is as strong as it gets: great name, great visual identity, mostly rich emotive experiences in flight and beyond. In the case of Pan Am, the assets are so strong that they still outweigh the liabilities, hence it retains brand equity,” he said. To resurrect a brand successfully, owners and any aspiring revivalists or licensees need to apply sound judgment. Brands that have acquired a toxic image—or are completely obsolete—should be completely abandoned, according to Henrike Strobl, attorney-at-law at Nordemann (Germany).

“In cases where the brand clearly reflects a negative image, which may happen due to changing cultural sensitivities, the trademark should not be used. This extends not only to licensees but also third parties with whom there is no licensing relationship, since this could be connected to the [former] trademark owner,” she said.

Zombie Attack

For some brands, there are fates worse than death. If insufficient attention is paid to a valuable brand in its final throes, a third party will be well placed to cite the mark as abandoned or defunct and will seize it as a “zombie brand” at little cost.

In most jurisdictions, such parasitical parties can garner success if they present prima facie evidence that a mark has been “abandoned” due to years of non-consecutive use.

There is a key difference between zombie brands and those deemed dormant. According to Annie Allison, associate at Haynes and Boone LLP (US), “A dormant brand could be considered a brand or trademark that is not currently being used, but where the owner has plans for use and the mark has been used recently enough to not be at risk of being deemed abandoned. Dormant brands are those that are at risk of being zombified.”

Brands are even more at risk if they evoke pleasant associations or tap into a marketplace for retro or vintage products, she added.

Anne Gilson LaLonde (US), author of Gilson on Trademarks, explained these abandoned or zombified trademarks “are adopted by a new owner specifically to capitalize on consumer recognition of—and loyalty to—the discontinued mark. The new owner usually copies the abandoned mark to benefit from its nostalgic appeal.”

In her view, zombie brands typically lack quality standards or even assistance from the prior mark owner.

“Nothing in trademark law requires the zombie mark owner to imitate the original quality or ingredients or to reveal that it has no connection to the original mark owner,” she said.

So how can companies and their brand guardians best rescue and safeguard brands in limbo and ward off any zombie attacks? According to Ms. Strobl, it is crucial for companies to keep a dormant brand’s IP rights alive for as long as possible to avoid others latching on to the brand. In other words, routinely renewing the respective trademarks should be top of mind.

If brands risk cancellation actions because they cannot meet use requirements, they may be able to reapply for the original trademarks and benefit from grace periods with non-use requirements in some jurisdictions, she noted.

Ultimately, mere “token” use of the trademark— the limited or sporadic use solely to maintain rights in the mark-—is unlikely to withstand an abandonment assertion, said Mark Sommers, a partner at Finnegan (US).

“In such cases, companies may not be successful in preventing unrelated third parties from ‘resurrecting’ their marks that have lain dormant for too long,” he cautioned.