Brand names carry significant weight in retail—often driving purchasing decisions more than price or product features. That's why retailers go to great lengths to protect their intellectual property (IP), including names, logos, trademarks, and other brand assets. However, retailers can sometimes grant consent without realizing it—simply by accepting the terms of a vendor's order form or standard agreement without reviewing them beforehand.
In Part One of this 2-part series, I highlighted some of the risks in vendor contract clauses that may weaken a retailer's IP rights, and below in Part Two, I will share best practices for maintaining control over brand assets.
Best Practices for Protecting Retail Brand Assets
The following best practices can help retailers to mitigate risks to their IP, especially when taken before entering a new vendor contact:
- Legal review of any contract (no matter how small dollar amount it may be or how many online terms are referenced), can help to ensure there are no clauses granting the vendor permission to use of the retailer's intellectual property without prior written consent.
- Have a cross-functional team, including legal, marketing, and operations, also review all vendor agreements so that multiple perspectives regarding brand protection are considered.
- In the event the vendor does not allow contract revisions, (or if review by the retail team is impossible/impracticable), consider preparing a blanket statement that prohibits the vendor from using the retailer's trademarks and other IP without the retailer's prior written consent and send it to the vendor to include as part of the order form, purchase order, cover page, statement of work, additional terms, or other ordering document. It is particularly useful if this language expressly states that it governs in the event of any conflict with the vendor's terms and any amendments.
- Closely review any provisions relating to AI use by the vendor to determine whether the vendor has the right to use the retailer's IP for purposes of training of its AI model and consider the risks involved with such use.
- When the vendor's contract includes online terms, review those terms to determine whether the vendor is allowed to amend the agreement without your written approval, particularly with respect to any provisions relating to the use or marketing of the retailer's IP.
- Conduct regular audits of all vendor agreements.
- In the event the retailer is willing to permit the vendor to use its IP, consider a licensing arrangement that generates revenue – or somehow compensates the retailer (e.g. discounted or reduced rates, more favorable terms) – in exchange for such use by the vendor. Such a license can also include the right to revoke their use, e.g., in the case of disparagement or if association with the vendor can put you in bad repute.
- When granting permission to use retail IP, include brand guidelines regarding proper usage (e.g. on the retailer's website or in its marketing materials) which the vendor is required to follow.
- Maintain a list of vendors authorized to use retail IP, and regularly audit the sites or places where use is allowed.
- In the event the retailer learns that its IP is being used by a vendor without consent or inconsistently with brand guidelines, take steps to require that the vendor terminate such use.
- Adopt a corporate policy that prohibits employees from signing agreements that permit the unrestricted use of a retailer's IP rights.
- Post the retailer's trademark policy on its website for reference by internal and external users to help ensure compliance.
A retail company's intellectual property is incredibly valuable. The above steps can help to ensure that all stakeholders understand the importance of obtaining proper review of their vendor contracts and emphasize the C-Suite/legal department's role in implementing even basic procedures of review to protect against inadvertent misuse of a retailer's IP.
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.
