Last 0 Low 0 High 0 Change 0 Change % 0 Bid 114.4 Ask 115.2 Currency GBX No Shares 0

Brand Matters Issue 2 | August 2014

Brand Matters

Welcome to the latest edition of Brand Matters, our new e-bulletin focusing on issues that affect brand owners and advisors.

Jeremy Hertzog


Editor's Note

Welcome to the latest issue of Brand Matters, our new e-bulletin focusing on issues that affect brand owners and advisors.

Regardless of sector – from retail, fashion, sport and media, through to life sciences, finance and real estate – a brand is one of the most valuable assets that a business or an individual can own. But navigating the world of brands can be a minefield, particularly in light of technological advances and the international nature of modern business.

We welcome your feedback, so if there is anything in this newsletter that you wish to discuss further, or any ideas for future issues, please do not hesitate to contact me or any member of the team.

Zero tolerance for loopholes

Brands who use 'zero hours' contracts to engage employees on an ad hoc basis should keep a close eye on a consultation recently launched by the Government. This looks at potential loopholes that employers may use to avoid the proposed ban on exclusivity clauses - which stop a worker from seeking income elsewhere even when their employer has no work to offer - and also aims to develop sector-specific codes of practice on the fair use of zero hours contracts.

Zero hour contracts are often used in industries which fluctuate in demand, for example retail and hospitality. They are arrangements which set out the terms of the relationship between an 'employer' and a casual worker, and are intended for use when a business wants to engage a worker on an ad hoc basis, with no guarantee of work, but with an expectation that the worker will be available for work if and when offered. Only compensation for work performed (at the national minimum wage or above) is given. Criticism of the zero hour regime has primarily focussed on the fact that for the estimated 1.4m people in the UK working under such arrangements, the needs of business are often prioritised over the rights of the worker. Putting aside the fact that the worker does not accrue the right to redundancy payments or unfair dismissal rights, it is the use of exclusivity clauses that has caused the greatest outrage – the ability to restrain a worker from seeking employment and income elsewhere at times when their employer has not offered work or has no work to offer. And it is this principle that the government is looking to prohibit.

However, despite its good intentions, the Government has already acknowledged that employers may try and use potential loopholes to avoid the proposed exclusivity ban, such as offering contracts which guarantee very low hours of work or, as some have suggested, offering fewer opportunities or no work to those who choose to also work for another employer. The consultation will seek views on how best to address and close such loopholes. It will also look at penalties for employers who abuse the arrangements and remedies for workers who suffer as a result. Also of interest is the government's announcement that sector-specific codes of practice should be developed to help implement the fair use of zero hour contracts. This will be particularly interesting for many of our clients and those who wish to participate in the consultation can do so through the following link here.

If you use zero hour contracts in your business, you can assume that exclusivity clauses will be prohibited at some point in the near future. For those entering into arrangements with workers going forward, it would be sensible not to have such a prohibition in the worker's contract – allow the worker to seek and perform alternative employment at times when your business is not in a position to offer work. A well written contract will always allow the employer to terminate the arrangement if the worker is unable to accept a certain number of assignments over a defined period of time. The key to the future of the zero hour contract regime will be flexibility for industry with protection for workers. And the more businesses which are able to demonstrate support for their workers, the better served they will be when the minimal of anticipated changes are likely introduced.

For more information, please contact Helen Croft.

Protect your store layout

In recent years, colours, sounds, shapes and smells have all been registered as trade marks in Europe.
In July, the Court of Justice of the European Union confirmed, in an action brought by Apple Inc., that “the distinctive design layout of a retail store” could also be protectable under EU trade mark law.

The benefits of registering a store layout as a trade mark, (and these benefits also apply to proprietary store equipment, fixtures and fittings), include a right to stop competitors copying layouts or creating lookalike stores.

It also allows companies to licence layouts to third parties, including franchisees, and to prevent ex-franchisees or other people that take over a premises on lease expiry, franchise agreement termination or franchisee administration from using the layout and any proprietary equipment, fixtures and fittings that are protected by a trade mark registration.

To obtain a trade mark registration for a design layout, franchisors and retailers will need to meet the same registration criteria as for any other trade mark:

  • There needs to be a sign.
  • That sign has to be set down in a graphic representation. Apple’s application was a 3D representation of a flagship Apple store using a series of lines, curves and shapes.
  • The layout has to be different from other retailers’ and franchisors’ store layouts;  it needs to be able to distinguish the applicant’s goods or services from those of other people and have a “distinctive character”.

The key take-away from this decision is that retailers and franchisors should be looking at their layouts (and equipment, fixtures and fittings) with fresh eyes and considering whether they are distinctive of their brand and valuable enough to warrant protection.

Clearly, some franchisors and retailers may need to work on making their layouts more distinctive, but doing so can also enhance customer experience, loyalty and goodwill, further distinguishing a franchisor or retailer from its competitors.
Once store layouts are registered as trade marks, it will be interesting to see how franchisors and retailers enforce them and use them to oppose applications made by competitors.

If you have any queries, please contact Lewis Cohen.

Lifting the shroud of anonymity

Social media and mobile technology provide a myriad of opportunities for positive engagement with numerous audiences. But when they are used maliciously and anonymously, by competitors or spiteful forces, the effect can be extremely damaging. Online attacks, to a global audience, are often more harmful and difficult to rebut when perpetrated by those who try to hide their identities, whether behind hoax Twitter accounts, fake email addresses, or unregistered mobile phones. Malicious and intrusive publications online can cause significant and lasting reputational damage, as images and information dissemination across various platforms can prove almost impossible to completely remove.

Threatened or actual malicious publications affect businesses and brands across all industries. The private and financial affairs of brand ambassadors and company officers, and the internal dealings of well-known companies are ripe for public discussion and criticism, particularly if touching on the controversy of the day. The presumption that what is published is true, no matter what the source, means that negative publications can be devastating; wreaking havoc on personal and business relationships, profitability and investment opportunities.

The modern challenge is how to keep confidential matters confidential, how to react when dissidents attack your brand or when adverse publications are threatened or a confidentiality breach occurs, and how to ensure those who cause the damage to your brand are held properly accountable. Time is often limited in our social media world, and strategic reactions must be considered and planned for, preferably in advance of any crisis happening.

Keep confidential cards close to your chest

Whether your business is well-known or more low-key, it is essential to heighten efforts to keep truly sensitive and confidential information safe. This may include encrypting email and securing remote access systems, strengthening privacy settings on social media accounts, ensuring confidentiality terms in employee and other contracts, and regularly 'stress testing' areas vulnerable to abuse.

Monitor and control your public brand

Many corporates shy away from publicity, and have preferred to keep a low profile. Careless public connections or rash communications with the media or antagonists may undermine such attempts, however, and can leave you exposed if negative publicity occurs. Having a considered and carefully controlled public presence, for example by way of an informative and moderated website, is a proactive step that can help manage public perception and dilute the impact of a reputational attack.

Prepare for a crisis

Being unprepared in the face of attack can result in panic, delays and mistakes which will invariably escalate and exacerbate the damage caused. Time spent honestly appraising potential vulnerabilities, and planning a crisis strategy and crisis team ahead of time, pays dividends. Working through a reputation crisis simulation exercise, such as Mishcon Spotlight, will allow mistakes to be made in private, and highlight where improvements may be made before a reputational attack strikes.

Trace and bring perpetrators to account

Anonymous publishers may believe that their activities can go undetected, but they invariably leave evidence as to their identity online. Through strategic and forensic investigations, engagement with social media hosts and targeted disclosure applications against third parties, it is possible to piece together relevant evidence and track down aggressors so that they may be held accountable for their actions.

Any brand who values their public reputation must prepare carefully and thoroughly to pre-empt and avoid damaging reputational attacks, and ensure that they have the right team in place to deal with anonymous threats or public exposure at times of crisis.

For more information, please contact Emma Woollcott or Alexandra Whiston-Dew.

Mishcon launches designer mentoring programme

Mishcon de Reya has launched a Designer Mentoring Programme with the British Fashion Council. Through the programme, the Firm will work with 10 carefully selected British fashion designers each year to assist in building their businesses. Each designer will receive a number of hours of pro bono legal advice and will participate in a series of bespoke workshops focusing on key legal issues from brand protection and raising finance, through to reputation management.

Click here for more information.

Get involved in London positive week

Positive Luxury's second annual Positive Week runs from 6 to 12 October, bringing together luxury brands to share their positive stories with the aim of inspiring like-minded brands and consumers. Throughout the week, Mishcon is sponsoring a series of panel discussions focusing on the leading luxury industries - from fashion and beauty, through to watches, jewellery, cars and hospitality, - at the Soho members club, House of St Barnabas.

If you would like to get involved, please contact Stephen Rowe.

How can we help you?

How can we help you?

Subscribe: I'd like to keep in touch

If your enquiry is urgent please call +44 20 3321 7000

I'm a client

I'm looking for advice

Something else