Fluid Trademarks- A Brand’s Alter Identity

Recently in September, 2022 Amul- the most prominent dairy brand in India released a doodle, featuring the famous “Amul girl” celebrating the return of eight Cheetahs in the Kuno National Park, Madhya Pradesh. Over the years, the Brand has managed to position Amul Butter as a household staple through its alternate identity- Amul Girl. The Mascot regularly makes clever puns on the day-to-day political and policy developments while communicating their product’s “utterly butterly deliciousness”.

Fluid Trademarks- A Brand’s Alter Identity

                                                                        Fig: The recent Amul Doodle[1]

Creativity involves breaking expected patterns to look at things differently. The notion of being creative and deploying “out of the box” marketing strategies to drive brand and consumer growth is not a new concept. The ever-increasing competition and the digital revolution have forced brands to go out of their way to stay afresh and ahead of the competition while maintaining their brand identity.

Fluid Trademarks are a relatively new, up-and-coming category of marks that businesses are increasingly using to differentiate their brands and products from the competition. The Morehouse defence[2] (along with Section 43(a) of the Lanham Act)[3]  defines fluid trademarks as marks that change over time (with respect to the original or registered mark) to increase customer engagement. Albeit not explicitly defined, the defence serves as an equitable doctrine that applies when an applicant owns a prior registration “for essentially the same (or substantially similar) mark and goods or services, and for which registration has not been challenged.”

 

What are Fluid Marks?

 

Fluid Trademarks essentially serve as an expansion of the base marks, which are registered and known to the public. What makes these marks “fluid” is the interplay between different iterations of the base mark, which is characterised by the use of creative yet diverse graphical and visual components while maintaining the core features of the base mark.

Many brands frequently deploy such marks to commemorate certain special occasions or landmark happenings, enabling them to keep in touch with the ongoing trends and strengthen brand awareness by promoting interaction with the consumers.

For instance, Google’s ‘Doodle’ could be termed the quintessential fluid trademark, where different variants of the Google logo have been used over the years to mark or memorialise national/international events and festivities. Absolut Vodka is another brand that has been commercialising various iterations of its mark by launching special edition bottles to commemorate events. Some other examples of Fluid Marks being deployed by renowned brands in their marketing strategy include Nike’s ‘Just Don’t Do It’ Swoosh, BMW’s spaced logo citing ‘thanks for keeping distance’ during Covid-19, and Starbucks’ ‘Masked Mermaid’.[4]

While it is appreciable that brands are deploying newer strategies to connect with their consumers, the use of Fluid Trademarks presents some pertinent roadblocks when it comes to IP protection that these brands need to take note of.

 

Protection of Fluid Marks

 

Although there are no explicit provisions or synonymous precedents citing protection for fluid trademarks in India, registering each iteration of the base mark, which would just be deployed occasionally by these brands, would not make much business sense since it would not be cost-effective in the long run.

Section 15 of the Trademarks Act,[5] 1999 accords protection for a series of trademarks, but it is pertinent to highlight here that the section is effective only when all the variants of the base mark could be anticipated in advance,[6] which is not the case with Fluid Trademarks because of their dynamic nature.

Existing commercial identity and recognition of the base mark do accord common law protection to Fluid Marks. Still, it is pertinent for brand proprietors to consider the following essentials while endeavouring for the protection of Fluid Trademarks:

  • Protection for Unregistered Marks: Regardless of whether the brands have moved towards protecting their ‘fluid’ marks or not, the common law still subjects these marks to some sort of protection. In Proctor and Gamble v. Joy Creators,the Delhi High Court held that explicit resemblance need not be a ground to constitute an infringement of the trademark. Substantial resemblance to the primary features of the mark in question might be enough criterion to accord protection to the primary mark.
  • The Degree of Variation: The degree of variation of the base mark should be such that the mark retains its source-identifying features while simultaneously being different enough to command distinguished protection. The public should be able to identify the brand owner based on such iterations of their marks.
  • Likelihood of Confusion: Multiplicity of the base mark to an extent, such that it loses its source-identifying features, might expose the base mark to losing its distinctiveness, thereby putting the base mark at risk of not being synonymous with the proprietor anymore. Hence, the source-identifying features of the base mark should remain intact in the fluid mark to enable the public and trade to associate the fluid mark and the base mark with the proprietor.
  • Copyright Protection: Newer and fundamentally distinct iterations of the base mark may be afforded special protection under the Copyright law since the brands would be subjected to certain rights for their marks even if they are not registered. However, in establishing whether the proprietors would be entitled to a copyright on the mark, the burden of proof shall lie entirely on the proprietors themselves, and hence it would be advisable to maintain a record of the entire creative process, artwork and other resources, that went into the creation of the mark, to establish ownership.
  • Continuing Commercial Use and Identity: The base mark should be subject to constant and uninterrupted commercial use, and there should be no demonstration of abandonment of the base mark. While the base mark should be distinctive and recognised across the market, the unregistered ‘fluid mark’ should also be inherently distinctive and have acquired a secondary meaning within the public.[7]

The importance of having the base mark registered for the fluid mark to have any chance of protection was highlighted in the recent case of McGurr v. North Face Apparel Corp.[8], where the US-based artist, Futura, was denied protection for his recognisable, signature stylised atom design because the base mark, i.e., the shape of an atom, was not registered. The District Court for the Central District of California noted that legally recognising fluid trademarks “would give new meaning to federal trademark law with far-reaching consequences.” The court rather recognised copyright law as a more robust source of protection for entities facing similar situations.

 

Conclusion

 

Fluid Trademarks might be the future of brand building. They have indeed emerged as an excellent tool for businesses across the globe to engage and interact with their customers while simultaneously allowing them to keep in touch with ongoing trends. But as long as the legislature or the judiciary steps up and develops a robust set of guidelines for their protection, it would be feasible to work with an experienced IP attorney who could assist applicants to come up with a smarter plan of action for the protection of their dynamic and ‘fluid’ marks.

References:

[1] https://indianexpress.com/article/trending/trending-in-india/amuls-latest-topical-celebrates-arrival-of-big-cats-in-india-8158728/

[2]  Morehouse Manufacturing Corp. v. J. Strickland and Co., 407 F.2d 881, 160 USPQ 715, 717 (CCPA 1969) (United States).

[3] The Lanham Act, 1946, § 43(a), 15 U.S.C. §§ 1051-1141 (2006).

[4] These famous logos have been remade for the Coronavirus Age, Media Marketing, Accessible at: https://www.media-marketing.com/en/news/famous-logos-remade-coronavirus-age/

[5] The Trade Marks Act, No. 47 of 1999. India Code, § 15.

[6] Draft Manual of Trademarks, 2015. Accessible at: https://ipindia.gov.in/writereaddata/Portal/IPOGuidelinesManuals/1_32_1_tmr-draft-manual.pdf

[7] Louis Vuitton Malletier v. Dooney & Burke, Inc, 454 F.3d 108 (2d Cir. 2006) (United States).

[8] McGurr v. N. Face Apparel Corp., 2021 U.S. Dist. LEXIS 196568 (United States).

Image Credit: Photo by Eva Bronzini

Fluid Trademarks essentially serve as an expansion of the base marks, which are registered and known to the public. What makes these marks “fluid” is the interplay between different iterations of the base mark, which is characterised by the use of creative yet diverse graphical and visual components while maintaining the core features of the base mark.

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The Messi Exit: A Legal & Financial Perspective

Behind the passions of the fans, tackled goals, swanky parties and brand endorsements, there is a lot that goes into structuring a football team/club, registration as well as the transfer of a player while maintaining sustainable finances. 

In response to multiple financial irregularities in clubs such as Deportivo La Coruña, Racing Santander, Valencia, Real Zaragoza, Real Mallorca, Albacete, Real Betis etc., the economic control framework was introduced in 2013 to keep clubs financially afloat and maintain competitive sustainability.

At a later stage, FFP (Financial Fair Play) came into effect against errant clubs for breach of regulations. Spain’s economic control- La Liga controls the fire before it can damage (to an extent) by setting a limit to the amount a club can spend, thereby making it easier to stay within limits and preventing the creation of unsustainable debts. 

What were the legal reasons for Messi’ s exit from Barcelona?

 

Recently Argentinean professional footballer Lionel Andrés Messi, popularly known as Leo Messi, decided to part ways with the Spanish football club FC Barcelona and join the French football club Paris Saint-Germain. Messi had been with the Spanish club for the last 21 years and their association came to an end on 30th June 2021, when they decided to move on.

Messi had agreed to a new five-year contract with Barcelona, however on 8th August 2021, the legendary football player announced his exit from the Spanish club, by signing a two-year contract with the French club Paris Saint-Germain, with the option of further extension up to a year. FC Barcelona announced that despite the agreement between the club and Messi, they were not able to honour the new contract due to the Spanish football league’s (LaLiga’s) financial fair-play rules. 

 

What is LaLiga Financial Fair-play Rule? 

 

Under the LaLiga fair play rule, each club is provided with a cost limit for each season, which includes the wages of the players, the coaching staff, physios, reserve teams, etc. Clubs have the flexibility to decide how the wages are distributed, as long as the overall limit is not breached. Factors taken into consideration for setting the financial cap are inclusive of expected revenues, profits and losses from previous years, existing debt repayments, and sources of external financing among others. In this case, the Catalan club could not accommodate Messi’s contract within the financial limit for the upcoming year, even though Messi was allegedly willing to take a 50% pay cut. 

Considering the fact that Messi is Barcelona’s record scorer with 751 goals and 10 La Liga titles, Messi’s exit could mean a heavy blow for the world’s most valuable[1] European football club. 

A football clubs’ main revenue is generated from TV broadcasting rights, matchday sales, and commercial revenue which includes sponsorship contracts, merchandising sales, and digital content that the club creates. It is too early to say whether Messi’s departure will have an impact on how Barcelona performs in the ongoing season. However, there is no question over how Messi has played an important role in bringing laurels to Barcelona over the past few years, which has garnered a significant fan following, not just for the footballer, but also for the club. Thus, his exit may likely cause a dip in the viewership and fan following which will directly affect the Club’s revenue.

Typically for a footballer, his contract with any club would include basic salary, signing-on fees, royalty fees, and objectives based on games. Apart from these, some of the other key element included in a contract is his image rights, merchandising right and licensing deals, which form a major portion of any footballer’s gross income. 

 

What are Image Rights? 

Image rights are the expression of a personality in the public domain. For an athlete, it will include their name, photo, and likeness, signature, personal brand, slogans, or logos, etc. Generally, football clubs try to extract a greater percentage from the image rights of a player, in a club capacity as compared to their personal capacity. Club capacity is usually when the image rights of the player are used in connection with or combined with his name, colours, crest, strip, logos identifying him as a player for his club. Personal capacity is usually when the player is appearing in and conducting activities outside his role as a player at the club. 

Any player leaving the club would have an impact on the commercial revenue generated by the club in the form of sponsorship contracts, merchandising sales as well as digital content. This would be especially notable for a player like Messi, whose personal brand value boasts over 130 trademarks. Messi’s trademark portfolio consists of mostly a single class trademark in his home country of Argentina, with others filed or registered in China, Brazil, EU, Malaysia, UK, Spain, Canada, Chile, and the US. The most common goods and services represented in Messi’s trademark portfolio are class 25 (clothing and footwear), class 28 (games, toys, and sporting apparatus) and class 9 (computer software). Apart from the above classes, class 18 has been filed in multiple applications.

The trademark consists of either the word mark MESSI/LIONEL MESSI or his logo. This means that Barcelona will no longer be able to use the footballer’s name or logo for apparel and merchandise sales, which will directly impact its revenue as most clubs collect a portion of the sales revenue. Also, Messi’s exit means that the club will have no control over his image rights to attract corporate sponsorships. Further, Messi’s huge online presence, with over 276 million Instagram followers, which is more than double of Barcelona’s official account (100 million), will have a direct impact on any advertising or publicity that the club may generate. 

A player of Messi’s stature, brand, and persona is significant to any club. How the present scenario is played with the new club and how much impact Messi’s presence will bring to Paris Saint-Germain is yet to be seen. 

A football clubs’ main revenue is generated from TV broadcasting rights, matchday sales and commercial revenue which includes sponsorship contracts, merchandising sales and digital content that the club creates. It is too early to say whether Messi’s departure will have an impact on how Barcelona performs in the ongoing season.

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