Bauer Researcher Looks at Trademarked Brands a “Natural Expansion”
Many companies deserve congratulations for mastering the art of the pivot in order to survive during the Pandemic. But those that entered a new product category or expanded into a new geographic area may find competitors with names similar to that of the now-extended brand – names those competitors have trademarked or can claim by common law as first users.
A company extending its brand therefore may be unable to legally use its own trademark unless it can show the brand extension as a “natural expansion,” said Marvin Hurley Professor of Marketing & Entrepreneurship Betsy Gelb, of the C. T. Bauer College of Business. Most such lawsuits settle.
Gelb’s new research uses legal research methods to examine 12 cases which went to trial. Results show a brand extender most often prevailing in court, but only under two conditions, said Gelb.
The two conditions are that the brand’s extension into a new product category is seen as similar to its current offerings, or its geographic expansion is seen as simply moving into an area in which it already has market presence, she said.
By contrast, a firm may lose out to a company already using a similar name for a diverse set of reasons: products differing from their current offerings, differing trademarks, weak marks, and/or if buyers seem unlikely to encounter both users of the name in question. However, no “bright line” divides winners from losers, Gelb said.
“Will that brand extension hit legal headwinds? The issue is natural expansion of a trademark,” was has been accepted for publication in Business Horizons. Gelb’s co-authors areattorneysBruce Morris and Ana Friedman.
Gelb’s current research interests involve trademark/trade dress issues and other areas where marketing and legal issues meet, sales, health care marketing, and advertising. She is co-author of the books: “Marketing is Everybody’s Business, Insights for Marketing Management,” and “Research at the Top: Better Data for Organizational Policy-Making.”
She has published in California Management Review, Harvard Business Review, MIT Sloan Management Review, Journal of Marketing Research, Journal of Marketing, Journal of Consumer Research, Rutgers Business Review, and a wide range of other journals.
By Julie Bonnin