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Cosmetics : Using IP to build a strong cosmetics brand .. exclusive to TMB

by on May 4, 2019 in Business, Latest News, Lead Article, News you can use, Nuggets, Retail News

Cosmetics : Using IP to build a strong cosmetics brand .. exclusive to TMB

The cosmetics industry has seen a shift in recent years, with bloggers and new entrants actively encouraging consumers to buy cheap copies of high-end products.

This has made creating and maintaining a strong, cosmetics brand challenging. So, how can newcomers use intellectual property (IP) to build a successful brand?

Start-up cosmetics businesses should take steps to protect their brand from the start to improve their chances of success in a dynamic and highly-competitive market.

According to market research, the global cosmetics industry is forecast to be worth $675 billion by 2020. To build a strong brand, newcomers must focus on how they are going to differentiate, and protect, their brand identity and product offering.

The sheer size of the market makes it possible for cheap, lookalike goods, known as ‘dupes’, to gain ground and encroach on the market share of more established players. Dupes tend to have similar packaging to high-end brands, but the product itself is of lower quality and it is not unusual to find influencers and bloggers promoting them as affordable alternatives.

The cosmetics blogger 

The rise of the cosmetics blogger in recent years has allowed manufacturers of dupes to capitalise on consumer enthusiasm for innovative, low-cost alternatives to high-end products.

Whilst bloggers could be seen as a threat to cosmetics brands, they could also play a role in promoting a new brand and helping it to build a loyal fan base.

Before deciding how to promote a brand, start-ups and early-stage cosmetics businesses should consider IP protection. There are three parts to successful IP protection, these are: marketing strategy, trade marks, and design protection. Building a robust marketing strategy, which is distinctive and demonstrates use of a specific brand or product, can make achieving trade mark and design registrations a much simpler process.

Copy-cat packaging

A trade mark registration is intended to protect aspects of a brand or product that identify its source. This can include the brand name, marketing phrases and even hashtag words or phrases that are associated with its product offering.

However, it is important to bear in mind that enforcing these rights is not always a straightforward matter, as infringement can only be declared if a level of consumer confusion can be proved. Copy-cat packaging is the main cause of infringement actions.

L’Oreal vs. Bellure

Nevertheless, the outcome of L’Oreal vs. Bellure in 2010 showed that packaging confusion is not always necessary for an IP infringement case to be successful.

Bellure had created a range of perfumes that smelt similar to those of L’Oreal, and the judge ruled that this gave Bellure an unfair commercial advantage when selling their goods online. This case demonstrated how important it is to have trade mark protection, as without this L’Oreal would have been unable to block the sale of the copy-cat goods.

When seeking trade mark protection it is important to consider the growth plans of the business.

For example, as well as seeking protection in the country where the product is currently being marketed, consideration should be given to where the business might wish to sell its products in the future. If goods or packaging are being produced overseas, it may be worth seeking trade mark protection in these territories too.

Copying the look

Design registrations can prevent others from copying the look and functionality of a product’s packaging, for example. In order to protect a design, the packaging needs to be novel and this should be considered as part of the product development process.

If manufacturing eyeshadow palettes for example, it may be difficult to create a packaging solution that is distinctive enough to secure protection, which means rivals could copy it without risk of infringement action.

Once a business has secured IP protection for its brand and products, it must then decide where to set the line when it comes to enforcing these rights. For example, some high-end brands might allow dupes to co-exist in the market, as long as they are not of the same quality.

Enforce trade mark rights

Those that buy dupes do so because high-end brands are out of their price range, and so they would not be potential customers anyway.

It is important, however, to consider the risk of dilution when electing not to enforce trade mark rights and the damage this could cause to a brand. Lesser-known brands who are still finding a stable fan base, should consider enforcing their rights as soon as another brand or product looks too similar.

Cosmetics brands should put in place a robust IP strategy well before bringing product to market.

This should include making their products stand out and considering the territories it intends to target. Whilst established players may be willing to accept some dupes, small cosmetics brands may need to take a more vigilant approach and be prepared to use their IP rights to protect their market position as they grow.

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Marisa Broughton is a partner and trade mark attorney at European intellectual property firm, Withers & Rogers LLP

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