In April this year we reported on the impending auctioning off of a number of pledged trade marks owned by the now-defunct Kingfisher Airlines (KAL) in a somewhat anxious attempt to recover the reported Rs 7,000 crore (if not more) owed to its 17-strong lender consortium.

The story highlighted how a business’s intellectual property portfolio can be incremental to its growth and success, but it also raised questions about the reliability of quantifying what is by nature an intangible entity for the purpose of security. This latter point is further expounded by the news that since KAL’s grounding, Grant Thornton, the esteemed financial firm who made the trade mark valuation when the assets were pledged, is now being investigated by India’s Serious Fraud Investigation Office over its assessment.

Since our last comment, the trade mark auction and another of the same in the August just gone have taken place, and if the number of attempts wasn’t enough of a clue, it can be confirmed that neither of them were successful, and this was even after the reserve price on the trade marks was lowered in order to make them more attractive to potential bidders.

According to the Indian Express, legal experts have blamed the washout on a complete deterioration of brand value. Indeed, one expert was quoted as saying, “[the] value of [the] trade mark of the entire group has gone down to almost nothing and nobody will like to buy it.”

The implication is that the brand has been faced with so much negative exposure that its image has been damaged in the mind of the public. In turn, the Kingfisher Airlines brand along with its portfolio of trade marks are no longer perceived as a worthwhile purchase, and its value has therefore diminished.

This most recent development in the Kingfisher Airlines narrative serves to highlight the sheer importance of a brand’s reputation and perception in making it the invaluable and lucrative asset it is within a company’s asset portfolio. This is because consumers come to know and trust certain brands and form associations with them which, if good, breeds customer loyalty and attracts talent to its ranks. Their products and services are perceived as better and they become the risk-free option to purchase or do business with. The benefit of goodwill means that brands can justify charging higher prices and this is more so if the brand is perceived as one that is premium. According to the Harvard Business Review, in today’s economy a staggering 70% to 80% of market value comes from intangible assets such as brand equity, intellectual capital and goodwill.

In consideration of this, it is of no surprise that KAL’s trade mark value has suffered so greatly in the wake of the media circus surrounding its descent and the activities of its ‘playboy’ founder Vijay Mallya (who has now had a notice of contempt served against him).

As an aside, that’s not to say that the old saying “there’s no such thing as bad publicity” doesn’t still ring true – we must all still remember the controversial My Protein “are you beach body ready?” advert which stirred up a magnitude of negative press and yet reportedly made around £1 million in the four days following the backlash. That said, situations such as the latter example are only lucrative in the right context. The effects wouldn’t quite be the same if the bad press centred round the fact that My Protein actually made you fat (NB: this is merely hypothetical).

In the words of Benjamin Franklin, “it takes many good deeds to build a good reputation and only one bad one to lose it.” If you have worked hard to build a brand that consumers know and trust then make sure it is protected so that nobody else can profit from your success or tarnish your good name. See below for some tips on how to do this:

Make your brand unique

The more unique your brand is, the more you will stand out from your competitors meaning your customers will be able to identify you in the marketplace and repeat their positive experiences with you.

Firstly, check online that there is no other brand that could be confused with your own. Further, performing a clearance search of the relevant trade marks databases will allow you to see if there are any prior rights holders operating in your market that could dilute your rights or object to the use and registration of your trade mark.

Register your trade mark

It is significantly harder to protect your rights against infringement in an unregistered trade mark. Registering your mark is an easy way to legally protect your brand and the end value of this intangible asset can far outweigh the costs.

Watch out!

In the UK, the onus is on the proprietor of a registered mark to monitor any potential infringement. By signing up to a watching service you will be able to keep an eye out on prospective applications that run the risk of diluting or infringing upon your prior rights.

Stand up for your rights

If it appears that somebody is infringing your brand, make sure you stand up to it. An attorney can represent you in such matters and can guide you from the first, amicable contact through to any formal proceedings that may commence.

For any further information on how to register your trade mark, sign up to a watching service or if you are concerned that somebody is infringing your brand and you would like legal advice, please get in touch with our team.