Exxon/Esso first adopted its 'Tiger in your Tank' character in the early 1960s. Now Exxon Mobil is being sued in the US by Kellogg's, which has used 'Tony the Tiger' on Frosted Flakes (known as Frosties in the UK) since the 1950s. Kellogg's complains that Exxon's tiger has moved from exclusively promoting motQr oils to promoting food at Exxon's petrol station convenience stores. When we are talking food and tigers, Kellogg's argues, this is Tony's territory.
A similar problem occurred some years ago between Apple Corps, The Beatles' marketing arm and record label, and Apple Computers. Apple Corps had been operating since the 1960s and when Apple Computers started up in the UK in the 1980s, both entered a co-existence agreement confining themselves to music and computers respectively. Within a matter of years it became apparent that the music and computer industries were no longer different, separate or distinct: Apple computers could be used to produce and edit sounds. Worldwide litigation ensued. Although Apple Computers maintained it had not broken the 1981 agreement, it settled a 116-day trial in 1991 by paying Apple Corps $26.5 million.
These cases illustrate the problems that can arise where a well-known brand extends into a new area. Traditionally unrelated fields of businesses are merging and converging as never before. The expansion of the Virgin Group into seemingly limitless unconnected fields is an apposite example.
One result is that consumers may now expect such expansion from particularly well-known businesses. But what happens where another business has been using a similar brand in that field for a number of years without concern or complaint?
A recent Australian case involving Nike, the sportswear brand, illuminates many relevant issues. Nike sued Campomar, a Spanish company, in an attempt to revoke Campomar's trade marks for Nike in respect of toiletries. It also sued in passing off in respect of Campomar's Nike Sports Fragrance product.
Today, Nike is synonymous throughout the world with sportswear but in the first line of the judgment, the High Court of Australia reminds us that Nike is not a word invented by the company, but rather the name of the Greek goddess of victory.
Campomar and its predecessors had used the mark Nike on perfumes in Spain since 1940 and had obtained trade mark registrations from that date. At first, Campomar confined itself to Spain and North Africa, but it applied for Australian trade marks for perfume products in 1986 and for soap and laundry products in 1992. Both these registrations were granted without opposition by Nike, and Campomar started marketing products in Australia.
Campomar's management had anticipated the possibility of marketing its Nike cosmetics in conjunction with Nike, and wrote to Nike with this proposal. The approach, however, was rejected by Nike, which replied that it did not believe perfume and cosmetic products to be part of its company image.
The court upheld Campomar's trade marks but allowed the passing off action in respect of Nike Sports Fragrance. The fact that this product was marketed in pharmacies in the same way as other sports fragrances, including Adidas, was material to this finding. Although there had been no product extensions by Nike into sports fragrances, Campomar's marketing of Nike Sports Fragrance was found to deceive the public into thinking that this product was in some way promoted by Nike or distributed with its approval.
The practical result of this case is a little counter-intuitive. Campomar maintained its trade marks, thus preventing Nike from moving into the field of perfume products. At the same time, it showed that a trade mark registration does not of itself protect the owner against a passing off claim.
So, where a mark has a particularly wide reputation, trade mark owners in diverse businesses must be vigilant to avoid confusion with the marketing of products or services under the same or a similar mark. It does not matter whether the mark has been used legitimately by that owner for years and well before the complainant. Such is the power of a strong brand.
So, what result might we expect from the current catfight between Exxon and Kellogg's? And what warnings do these court cases sound to other brand owners? When considering approaches from non-competitor businesses wanting to use a similar brand to yours, be wary of entering into agreements which restrict your growth into areas of potential interest to you. Growth areas can be difficult to predict in these days of militant brand extension.
Trade mark registrations in both your actual and proposed areas of activity are vital to protect your brands. Although they will not protect you against a passing off claim, they can prevent encroachment from competition and may be useful in negotiations.
When considering the extension of a brand, conduct clearance searches to identify whether conflicting brands already exist in those areas. And differentiate your brands from well-known brands, even if there seems to be no current risk of confusion, and even if you got there first.
First published in Brand Strategy in December 2000.