Australia: Managing your products when a patent expires – how good brand management can maintain product and brand awareness, and build market share

Last Updated: 24 November 2017
Article by Georgina Hey

The Australian Government's recently expressed interest in cracking down on misuses of market power may have left some patent holders with concerns about the proposed amendments to the Competition and Consumer Act 2010 (the Act). All the fuss relates to section 46 of the Act: the provision which prohibits a company with a substantial degree of market power from taking advantage of that power to eliminate or damage a competitor, prevent market entry or prevent or deter competition. The change proposed is to implement an "effects test" which will question whether conduct complained of under this provision has the purpose or likely effect of substantially lessening competition.

"Why are these changes concerning for patent holders" you ask. Well, as you know, patent holders enjoy a temporary monopoly over an invention, which lasts for up to 20 years from the filing date of their application (or up to 25 years for pharmaceutical substances). When their patent right expires, patent holders often see a multitude of competitors entering the market and eating away at their market share. With the introduction of an effects test, patent holders trying to preserve their market share after the expiry of their patent right may inadvertently be using their diminishing market power to lessen the competition, therefore exposing themselves to an ACCC claim.

Patent holders can however rely on their reputation and brand to preserve their market share once their patent right expires. This emphasises the need for an effective branding strategy for all businesses, including patent holders well in advance of any patent expiry date.

By definition a branding strategy is a long term plan for the development of a successful brand through brand awareness. Below are some of the key components of a comprehensive brand strategy.

  1. Communicate a clear vision of a company's overall goals. At the heart of every branding strategy sits the company's overall goals and the communication of those goals to consumers. By way of an example, we considered Bayer's ASPIRIN brand which has far outlived its patent period.

As you may know, ASPIRIN medicine was created more than 115 years ago and is commonly understood to be the most utilized pain reliever in history. So much so that ASPIRIN arguably became a generic term for pain relievers. So why has Bayer been so successful in maintaining its market share after the expiry of the ASPIRIN patent? Part of the ongoing success of Bayer's ASPIRIN brand is linked to their 'Science for a better life' moto and their various initiatives which embody the company's long standing and 'personal' investment in the wellbeing and future of its customers. This clear commitment combined with the company's reputation, and continued strong support for the ASPIRIN brand continues to distinguish it from competing generics, and is part of the explanation for ASPIRIN's ongoing success.

  1. Be consistent in communicating the brand image. It is essential for consumers to be able to easily identify a brand and instantly associate it with the company's product. By way of an example, we looked to Velcro. Velcro's patent on its fastening technology expired in 1978, which allowed third parties to begin manufacturing goods with the "hook" and "loop" system conceived by Velcro.

Although the patent has expired, the VELCRO trade mark continues to be hugely valuable as it allows Velcro to distinguish its goods from those of its competitors in the marketplace. The increased value of the mark led Velcro to implement strategies to mitigate the risk of its trade mark becoming descriptive. These included the publication of strict guidelines on the proper use of the VELCRO trade mark, preventing competitors from using the mark to advertise products similar to theirs, preventing misuses of the mark by media, and educating the public. For example, on 25 September 2017 Velcro's legal team published a humorous YouTube video which sought to educate consumers about both the VELCRO brand and proper trade mark use. The opening verse of Velcro's video goes as follows:

We're a company that's so successful that everywhere you go You see a scratchy, hairy fastener and you say, "Hey, that's Velcro!" But even though we invented this stuff, our patent lapsed 40 years ago Now, no matter who else makes it – you still wanna call it "Velcro"

  1. Be flexible enough to keep up with the new trends and new competitors. Indeed, while consistency aims to set the standard for your brand, flexibility enables you to make adjustments that build interest and distinguish your approach from that of your competition. By way of an example, there are few toys as recognisable as the LEGO brick, and although LEGO products have undergone extensive development since the launch of the traditional LEGO brick in 1958, the foundation has remained the same. Unsurprisingly, Lego's US patents which were issued in the 1960s have now expired, thus opening the market to imitators and forcing Lego to adapt.

Before the 2000s, the organisation spent most of its time and effort marketing to children and parents, not focusing on their growing adult fan base; a fan base, which on average, spends significantly more on LEGO products per year than the average child. Upon becoming aware of this untapped fan base, the organisation began designing more complicated and expensive sets, such as the $500 Star Wars Millennium Falcon set that includes 5,000-pieces. In doing so, LEGO shifted the brand away from being 'merely' a toy business into an entertainment industry powerhouse, as evidenced by the successful string of Lego movies and character-related endorsement and licensing deals.

  1. Be aware of the competition, and use it as a challenge to improve your branding strategy. This may seem obvious but being in the same business and going after the same consumers requires some sort of awareness. By identifying your key competitors, you may be able to learn from them, and ultimately outperform them. In a crowded marketplace, differentiation is crucial.

If you are considering or are already involved in the development of a branding strategy, speak to a member of our IP team to discuss the products we could offer to support the protection of key aspects of your brand.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Georgina Hey
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions