Articles
Download Article 1
Download Article 2
Article 1:
Alternative Ways of Pharmaceutical Trademark Sourcing
Pharmaceutical companies experience by far the toughest brand name requirements of all product and service categories. Brand names to be used for pharmaceuticals need not only to fulfil trademark legal requirements, they also have to be accepted by the FDA and/or EMEA from a medical safety point of view. In addition, the delicate balance between the different interests of the pharmaceutical marketer (prime interest: brand differentiation, brand preference), the prescribing doctor (prime interest: substance, type and benefit of product) and the patient (prime interest: trust and relief) make pharmaceutical branding a challenging discipline.
A few branding firms have successfully and seriously addressed this particular need by developing appropriate means to create, search and research brand names for Rx products. In many ways, this is clearly the soundest and most promising strategy to find an appropriate trademark for a new pharmaceutical product. The outcome of such a project normally is a name recommendation consisting of a number of solidly searched brand names with an above average probability to survive the assessments of the medical authorities combined with a low risk to trigger conflicts with third party rights during the trademark registration process. This form of trademark sourcing is particularly valid (and we would like to say only valid) if there is a time span of at least 18 to 24 months between the date of filing the trademark and the international market introduction of the new drug. However, based on our experience, it occurs rather frequently that there is simply no time left to initiate a brand name creation process and to wait until the registration of the mark has progressed sufficiently.
In such business situations, options to source appropriate trademarks have been rather limited –and still are. If at all, solutions are driven and dominated by an inside view, i.e. to see whether there is an own, unused and registered mark that can be used for the new product on short notice. For years, trademark departments have been trying to find solutions for such a situation by either filing additional marks after a naming project has been completed or by initiating ‘name bank’ projects with the objective to create a strategic trademark reserve. However, these sourcing approaches have some considerable short cuts: The cost of maintaining a trademark reserve, the rapid value depreciation, the vulnerability of a trademark being not any longer within the grace period and the potential lack of conceptual appropriateness of a brand name that has been created without the product concept in mind, are the major drawbacks of such an approach.
But are there any further options? The principal answer is yes. There is a market for registered trademarks. However the market has quite a few particularities that you should know of, both as a potential provider, i.e. seller of trademarks, and as the party interested in the acquisition of a registered trademark. Here are some of the insights that we would like to share.
1) Precious trademarks (from both the owners but also from the interested party’s perspective) are very seldom actively put up for sale by the owner. The owner keeps the mark even if the legal position of the mark gets weaker. The party interested in a trade mark, needs not only to identify the existence of the mark and to check its appropriateness but also to find out whether the owner is prepared to sell the mark. Precious marks are not disclosed, because if they are disclosed, there may be an increased risk that the vulnerability of the mark is increased since third parties may become aware of a decaying legal position.
2) The party interested in a mark is looking for the ‘perfect mark’, a mark with all registrations required, all checks made and, of course, with the necessary fit to concept. This ambition requires that everything is done to identify such marks. A trademark broker who happens to be entrusted with a number of marks probably is not able to serve you with the mark you need. And the wider the registration (number of countries covered) the smaller is the probability that he will be able to provide you with such ‘perfect’ marks. In most cases though, a trademark that is at least registered already in the prioritized registers should normally have less problems than a new name that is filed as a trademark on an international basis.
3) The trademark owner serves of course primarily his own internal trademark needs. An external inquiry normally triggers quite some work for the legal department with the risk that all the hassle is done for nothing for an outside party making an inquiry without any obligation. Among others the trademark department needs to find out whether the marketing department is prepared to allow the sale from the trademark reserve. Unless a concrete price-tagged offer is available, the inquiry has generally a low priority.
4) The quality and scope of a mark can only be assessed to its full extent, if the trademark owner is willing to co-operate. Publicly available data tell only half of the trademark status since there may be non-official but binding agreements with third parties and registrations that are not possible to reveal on the basis of an online trademark search in the usual trademark databases. Therefore, any serious offer can only be made, if the party interested in the mark had a fair chance to evaluate the state and appropriateness of the respective mark.
5) The perceived value of a suitable, registered and ready-to-use trademark often varies extremely between the owner and the party interested in the mark. The buyer employs often the ‘incurred cost’ perspective. The seller regards the registered trademark as the privilege and license to go to the market with a new product within a reasonable period of time (without being forced to delay the market introduction due to the lack of a trademark). The strategic value of being able to strike the market without any time delay with a new appropriately branded product with the right registered mark is by far higher than getting a small cost based reward for the sale of a trademark allowing the smart buyer to accrue the full benefit of getting a superior access to the market.
An example: If a trademark registered in the European Community is acquired for a total cost of EURO 500.000 and a license period of three years is assumed, the license fee to be paid on a monthly and country by country basis would be EURO 926 per month and country. If the product reaches 15 million Euro in sales per year, the trademark license fee would correspond to 1.1 percent of the sales generated by the new product. If a time span of five years is uses as a calculation base, the purchasing cost for the mark would correspond to a licensing fee as little as 0.6 percent of sales generated by the product.
6) The trademark intermediary is in a far less attractive position than the branding agency that gets paid for the creative, search and research work which is conducted on an exclusive basis. The intermediary carries the full risk to identify appropriate and available trademarks and to succeed in closing the deal. The inquiring party is in a financial non-commitment position which makes it very difficult for the intermediary to assess whether the inquiring party has a serious interest. (In several instances the market has been screened by intermediaries and then the inquiring party has put the deal on hold until the own marks had cleared the trademark registration process or any other party was able to come up with a trademark solution.)
7) The non-commitment position of the party interested in a trademark and the risk for both the intermediary and the trademark owner lead to a situation where the intermediary is not able and not prepared to commit all meaningful resources for a full scale trademark hunting activity. There is also only a very remote incentive for the trademark owner to make an internal assessment whether the company wants to sell the respective mark or not. An intermediary asking a trademark department a dozen of times if a trademark is for sale without succeeding in any actual transaction is burning his good will.
8) The intense trademark creation activities conducted by the pharmaceutical industry in recent years and the arrival of professional brand naming have created a genuine pool of widely registered trademarks that can be untapped if the parties involved change their attitudes and practices. Millions of dollars are wasted every year since trademark owners fail to use their marks in time and parties interested in marks fail to realize the true value of a mark allowing their product the timely entry into the market. An introduction of a drug deferred by three months may cause a decrease in the company’s share price!
9) The general attitude towards the externally based procurement of registered trademarks needs to be changed. From an opportunistic-mindset to a solution and commitment driven approach allowing trademark owners to get an attractive reward for their capability to offer the value of a timely and appropriate access of a new product to the market. In order to utilize the full potential of an intermediary it will be necessary to agree a project fee, a defined step by step procedure and a time plan, generally in the same way as branding agencies creating and searching new trademarks are conducting their business.
10) If word marks for a moment are regarded as elements of concentrated verbal artistry and craftsmanship, we probably realize that the only way to access and control attractive and already existing name creations by acquiring them. Reinvention is not permitted. And new creations – are in this business often nothing else than creative efforts to avoid the copying of patterns that already have been found attractive and worthwhile to register.
BRANDWAY has sourced registered trademarks for companies such as GlaxoSmithkline, Pharmacia, Yamanouchi, Schering Plough and many more.
BRANDWAY appreciates the distribution of this paper to parties interested in this topic in your organization. If you would like to comment our views, please feel free to contact us by e-mail.
Back To Top
Download Article 1
Download Article 2
Article 2:
Trademark Sourcing – an intelligent IP service for the pharmaceutical industry.
The availability of appropriate trademarks that correspond to the needs of regulatory bodies, doctors, pharmacists and last but not least patients is an issue causing many pharmaceutical marketers quite some headache. Especially when realizing that time has become scarce to initiate a full-fledged brand name creation process, solutions to find a mark are quite limited. A first natural step is to ask the head of trademarks whether there is a mark available in the non-active trademark portfolio possibly matching his needs. If there is no adequate internal back up mark available, the marketer may have a serious issue to get a suitable mark for his new product. When facing this type of trademark problem, it may be time to turn to BRANDWAY, a highly specialized trademark services company, whose business idea is to assist pharmaceutical companies in exactly these situations.
BRANDWAY, the Hamburg based trademark merchant and provider, offers solutions based on registered non-active trademarks. The company continuously monitors trademark registers and identifies trademarks that may be available for sale. BRANDWAY works also as trademark brokerage and actively offers a limited portfolio of registered trademarks belonging to pharmaceutical companies who wish to divest trademarks that they are not intending to use.
The company is offering these services since the mid-nineties, particularly to pharmaceutical companies and has experienced that trademark owners are rather reluctant to put trademarks on sale that they are probably not going to use. Until now most companies prefer to keep their trademarks until they are worthless, instead of having a strategy that helps them to decide in which situations a trademark is to be put on sale in order to get a decent return for their investments in creating, searching, testing, filing and defending trademarks.
In situations where a mark has unsurmountable legal problems, a mark is needed on short notice due to an in-licensing or out-licensing opportunity or when the company is lacking a tradename that is registered throughout all the countries belonging to the European Community being necessary for an EMEA application, buying a trademark just might be the one and only solution.
Major pharmaceutical companies such as GlaxoSmithkline, Pharmacia, Yamanouchi, ScheringPlough and quite some other significant players in the pharmaceutical industry have already benefited from using the services of BRANDWAY.
BRANDWAY appreciates the distribution of this article to parties interested in this topic in your organization. If you would like to comment our views, please feel free to contact us by e-mail.