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Brands are more than mere trademarks. They are elegant mission statements that distill a company or product’s core benefits into a word, simple phrase, sound or image. The original meaning of the term “brand” referred to a distinctive mark used to identify the source of particular goods. Think of the term “branding iron,” which is derived from an old German word, meaning “burning,” according to the New Oxford American Dictionary. Today, the word has moved beyond that old definition. According to the New Oxford, brand now means “the promotion of a particular product or company by means of advertising and distinctive design.” This new definition reflects how companies today use their design expertise and the law to build valuable assets. A remarkable amount of the world’s wealth is tied up in brands. The British weekly magazine The Economist asserts that brands account for approximately one-third of all global commercial wealth. Another important economic aspect of brands: They endure. Of course, every trademark lawyer knows that trademarks, if properly maintained, can theoretically last forever. Not many trademarks actually last forever, but the brands with the highest value are usually the ones with the most longevity. As The Economist recently noted, “The world’s most valuable brand, Coca-Cola, is more than 118 years old; and the majority of the world’s most valuable brands have been around for more than 60 years. This compares with an estimated average life span for a corporation of 25 years or so. Many brands have survived a string of different corporate owners.” Companies with strong brands earn more, on average. As noted by The Economist, studies by academics at Harvard University and the University of South Carolina and by Interbrand Corp., have shown that companies with strong brands outperform the market in several indices. It has also been shown that a portfolio weighted by the most valuable brands performs significantly better than Morgan Stanley’s global MSCI index or the American-focused S&P 500 index. How is it that strong brands can have such great value? They are, after all, intangible, and don’t provide a monopoly to make particular products in the way that patents or copyrights do. The answer is that consumers favor products with well-known names, and they will pay more for them. Strong brands can shorten the time it takes a consumer to make buying decisions, by condensing the overwhelming flood of buying information into a simple message that conveys quickly what the product stands for in terms of quality, value, or exclusivity. Building a strong brand is difficult. Businesses must establish a brand’s image and align the public’s perception of the brand with that image. All great brands share one characteristic: Customers know what they are getting when they buy a branded product. For example, McDonald’s uses a quality control system to ensure that all of its restaurants provide consistent taste and store experiences. Such consistency is hard to achieve and even harder to maintain. It’s difficult for a brand to stand out in the global economy where good products can be made almost anywhere by almost anyone. There was a time when “made in Japan” stood for cheap goods. Now those attitudes are completely outdated, and Sony, Lexus and other world-class names come from Japan. Today, many strong brands come from the United States, but can we really predict from where the next generation will come? Strong brands are made by considering every aspect of the consumer experience — from the first time the consumer hears about the product to the time the product package is thrown into the recycling bin. The consumer’s experience must be comprehensively planned and executed so that all advertising, product packaging, placement and delivery are consistent with the brand’s goals. Trademarks and logos are a small part of such an overall approach, which requires the coordination of product design, manufacturing, advertising techniques, marketing, sales, customer service, delivery and returns into a seamless, well-conceived implementation of the brand. Edward Gray is a partner in the Washington, D.C., office of Morrison & Foerster.

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