Understanding TRADEMARK

M S Bharath, Founder, KRiA Law, discusses how trademarks are essential for salons to establish a strong brand identity, protect their reputation and gain a competitive edge in the industry.

A‘Brand’ in general plays a pivotal role for not only the owner but also for the potential clients and customers. The uniqueness of one’s brand is imbibed into their identity and Salons are the best example for it. Brands, such as John Barrett, Lakme, Shahnaz Husain, Paris Parker and Salón De Belleza, have now become exclusively associated with the salon chain industry. Perhaps the value attributed to a brand by its customers can now be considered the greatest asset of the brand owner.

The rampant growth and advancement in Salon industry can be witnessed by the aspiration driven consumers which in turn has created a battleground for not only the existing players in the market but also the new entrants. The convoluted issue for the new entrants is choosing the right brand which is not only fancy and unique but also makes the player stay relevant amidst the ocean of competitors / counterfeiters / infringers. In order to put an embargo on the misuse of Trademarks and protect their well-renowned brands, salons are now taking a highway of initiating vigilant actions against such infringers / counterfeiters. ‘Doni&Guy’, a Copycat of the iconic brand ‘Tony&Guy’. In the Courr proceedings filed by the brand owners, the Indian Court stopped the infringer from further using the phonetically identical mark, as it created confusion in the market.

Adopting descriptive marks has its own perils. The Indian Courts held that L’Oréal’s mark HAIR SPA is descriptive and common to the trade and that it cannot claim monopoly over the word. Courts frown upon such descriptive words used as brands and do not protect them considering the majority of the salon brands have some descriptive element in their trademark.

There is a plethora of cases filed recently by the major Salons and personal care products such as Brasil Cacau, Ikonic, Toni&Guy, Bounce and Naturals against infringers / counterfeiters wherein the Courts have also granted orders restraining such parties from misusing their brand and counterfeiting of products.

The reputation of the salons that have paved their way to the top by investing in their brand through the years is also being pulled down by infringers, counterfeiters and in some cases even their own employees. Well-renowned brands are all now facing difficulty in identifying and eradicating infringers who are piggybacking on the goodwill and reputation garnered by the brand owners. While it is extremely relevant to protect and prevent misuse of trademarks, the Salons ought to be cautious about maintaining the ‘Value’ of the brand. The value attributed to intangible assets such as ‘brands’ would mean its reputation and recognition in the relevant section of the public. While it is an extremely arduous task to protect such intangible assets, it would take only a mere negative review on an Instagram page to affect its value.

Are employees a menace?

Misfeasance / negligence of an employee not only affects brand owner’s business but also tarnishes the image of the brand. It would take only a simple incident where employees are not adequately trained or where stylists trained in-house negligently give a wrong hair cut or use a wrong product despite specific instructions, which would lead to customers filing consumer cases. Due to the negligence of an employee, it is the reputation of the brand that would eventually go down the drain.

The training of employees is therefore of paramount importance to maintain standards of the brand. There are several instances where an employee who is well-trained at the expenses of their owners, after having studied the knacks of the trade, commences to jeopardise the business by soliciting the customers, by misusing and exploiting the customer data, by poaching the employees etc for their personal benefits. The prime reason behind the same is lack of agreements in place.

The brand owners are now being cautious and insist on valid agreements with relevant / necessary clauses such as confidentiality clauses and anti-poaching of employees, with all touch points, in writing, duly executed by employees.

Sourcing the original

The goodwill and reputation of the Brands apart from the advertisements and promotions is also reflected in the quality of the products used by them. Well-renowned Salons have commenced sourcing quality products. It is critical to always verify from where the products source and originality of the products. One such instance is that the product had been counterfeited and sold for a lower price to the consumers which led to the Indian Courts awarding damages to the brand owner. A glimpse of the original and fake products tabulated below would give even a trained set of eyes difficulty in telling them apart.

Commencing a salon, in the current era, dominated by competition in every industry, has been a challenging task. While brand in general plays a significant role, the infrastructure, facilities, products and services offered, elegant décor are also extremely relevant to maintain its brand value.

Franchisee models

Several salons have now adopted the franchise model to expand their geographies and top line for a variety of reasons. It is, therefore, incumbent upon the brand owner to ensure that each of its franchisees are quality controlled and terminated for gross repeated violations. Franchising is as important as stock investments; just as every stock investment is evaluated before becoming a shareholder, every franchise should be evaluated because of its potential benefits and with objective consideration.

Salon franchising models provide a golden opportunity to the franchisee to get access to a Brand that is trusted by many customers. Brands that are high-end and are popular among customers do look at the idea of franchising at some point in time and franchisees see this as a good opportunity that benefits both the parties. As much as franchisees play a vital role in building the brand, it can also be a detriment to the brand. Having a well-formulated agreement in place and focusing on upliftment of the brand systematically has always aided Brands in any industry to reach heights. There are numerous episodes of events where the agreements which are unadorned have always led to breach of franchise agreement, misuse of brand, counterfeiting of products, etc.

Applicability of territoriality principle

It is a well-established principle that trademarks are territorial in nature - the goodwill and reputation garnered in one territory, is not applicable in another territory. A classic example in the salon Industry would be in relation to the trademark. Despite the brand being well-established globally, they were not able to collate and file documents to prove their trans-border reputation in India. As a result, they were unable to stop an identical registration for the trademark Jolen.

While it is important to build one’s brand considering the fast-paced movement in the salon industries, it is imperative that the brand owners are aware of brand protection as well. Other IP Assets, which are critical, include designs for shape or pattern, patents for a new innovative product or process.

The awareness and importance of protecting Intellectual Property Assets such as Trademarks are gradually increasing amongst masses who recognise that such intangible assets have an equal contribution to the growth of their business, if not more than their tangible assets. PBHJ