Intellectual Property and the New Zealand Financial Services Industry: One of the Most Important Types of Intellectual Property from a Financial Institution's Perspective Is Its Trade Marks, Otherwise Known as Its Brand. It Is Important to Establish a Distinctive Brand from the Outset
Catley, Penny, Whitaker, Brooke, Journal of Banking and Financial Services
Although it is intangible, intellectual property is an important asset of all organisations. In the financial services industry, creating and then protecting unique intellectual property can provide competitive advantages and increase business value.
This article outlines some of the forms of intellectual property that are of interest to financial institutions.
The importance of branding in the industry
Intellectual property encompasses intangible assets such as patents, registered designs, copyright and confidential information. Perhaps the most relevant form of intellectual property for financial services businesses is branding, or trade marks. Strong branding is particularly important where you are offering a service rather than selling a physical product. Differentiating your brand will help mark and characterise the uniqueness of the service.
A trade mark, or brand, is a sign, which distinguishes the goods or services of your business from those of other traders. It can symbolise the specific service (or good) in question, in addition to the qualities related to that service and/or the organisation that provides it. Branding is a way of associating a service with the values surrounding the purchase of that service.
Over time, consumers' experiences (direct and indirect) create expectations of the service, whether positive or negative. And when positive, the brand acquires what is known as the 'goodwill' quality, or reputation, which can be the driving force behind a successful business. Once you have created this goodwill, you may wish to protect it to your exclusive benefit and prevent others from using it.
Branding rights can include trade marks (both registered and unregistered), packaging and 'get-up' (other types of physical traits related to the brand, for example, the interior decor for a chain of fast-food restaurants). A trade mark can be a word, logo, slogan, numeral, or any other sign. It can also comprise images, shapes, colours, sounds, and even smells associated with the brand.
There are certain things that help to make successful brands, across all industries. They include:
* Distinctiveness: A brand name should not describe the goods or services being offered. If your competitor (Company A) uses a name which essentially describes its service, for example, HOME LOAN, and you (Company B) offer the same service (albeit on mildly different conditions), under the name HOME LOAN, it will be very difficult for Company A to prevent you from doing this. This is because you are using non-distinctive words to describe your service. You may also find it difficult to differentiate your services from those of Company A, notwithstanding the fact that you provide a better and cheaper service.
The ideal is therefore to create and use a brand which does not directly describing the goods or services, but indirectly alludes to certain characters or qualities. It is also useful to note that it will be difficult to protect the brand HOME LOAN within the framework of intellectual property law. Inventing a new word is therefore a good way to achieve a distinctive trade mark.
* Pronunciation and recall: Brand names and other trade marks should be easy to pronounce and remember.
* Consistency: Once you have established your brand, invest time and money to promote and protect it. What good is a brand if you do not take action to prevent your competitor from using it? If you have a range of different financial products in the same family, consider adopting a 'house' or 'parent' brand that can serve as an umbrella under which other products in the range can sit.
* Image: Create an appealing image. Today, image is almost as important as the product or service itself. How the product looks will influence purchasing power.
Brand protection and Fair Trading Act issues
Trade mark legislation protects registered trade mark owners by prohibiting the use of the same or similar marks for the same or similar goods or services where the use of the trade mark is likely to deceive or confuse. …