Brand Vitality: Unilever’s approach to IP protection

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As brand-heavy Unilever attempts to slim down its portfolio there is even greater emphasis on protecting those brands that remain. Richard Heath, Head of Trade Marks and General Trade Mark Counsel, discusses Unilever’s brand strategy with Edward Fennell.

If you are looking for a definition of the world ‘household name’ then it is probably Unilever. And with 150 million people buying Unilever products every day it is likely that virtually every household in the industrialised world has a Unilever product somewhere in its bathroom, kitchen or utility room.

And not only is Unilever itself a household name but many of its product names – Dove, Axe (also known as Lynx), Cif, Flora (also known as Becel), Surf, Knorr, Lipton, Hellmanns, Birds Eye (the list could reach the bottom of the page) – are equally well-known to consumers across five continents.

Just for the record the figures are, as you might expect, massive. For example, in the fourth quarter alone of 2004 Unilever’s turnover was 10,759 million euros with an operating profit of 1,470 million euros.

During 2004 Unilever’s leading brands grew by 3.7% and nobody within the company underestimates the importance of those brands as the basis of the company’s success. As the opening to the company’s recent – and highly significant – ‘Vitality Mission’ put it, ‘In the past five years we have built our business by focusing on our brands…’

What this means in practice is that there has been a determined move by the company to slim down the number of brands through which it presents its products to the world. From 1,600 in the late 1990s the company has moved towards a more manageable total of around 400. The implications of this have been considerable. Single brands must now cover either a wider geographical area – maybe covering a whole continent or the entire world rather than just a few countries – or a much wider range of products (embracing more than one class). As a result the value of each brand has become even more vital.

Brand new challenge
To understand the significance of this it is important to grasp the market conditions under which Unilever is working. The company may be vast and powerful but it cannot afford to be complacent. Indeed, the tone of the most recent statement from its joint chairmen, Antony Burgmans and Patrick Cescau, was markedly sober. During the past year, the two chairs reported, the leading brands had grown by less than 1% and sales had declined in Western Europe. ‘We took our eye off competitiveness and our execution should have been sharper,’ they admitted.

So at a time when competitors are nibbling away at Unilever’s market share there is no way that the company can be anything but super-vigilant in protecting the value of the brands which constitute its ‘crown jewels’.

Overseeing this important function is IP lawyer Richard Heath who, following a highly successful career at a other major corporations including Smith & Nephew and Amersham, has been with the company for the past 13 years. Now, as head of trade marks and general trade mark counsel, from his London base he leads a formidable team of around 55 people in both Head Office locations – London & Rotterdam – and a professional and operational support centre located near Bedford some 50 miles north of London. The team comprises a number of trademark counsel, assistant trademark counsel, trademark officers, domain name officers, M&A, licensing, renewals, formalities, accounts, data management and data processing staff. In addition he has functional responsibility for a network of in-house IP specialists, in around 25 countries and an external network of law firms every country of the world.

Single brands must now cover either a wider geographical area – maybe covering a whole continent or the entire world rather than just a few countries – or a much wider range of products (embracing more than one class).

IP ever-present
The importance of Unilever’s brands means that members of the trademarks team work closely with the company’s marketeers at all stages of the brand life cycle. This starts right at the very beginning to ensure that when a new brand is being developed – or modified or extended to cover new territories – then the IP issues are ever-present and taken fully into account.

‘The word “brand” means different things depending on whether you are talking in a marketing or a legal context,’ says Richard Heath. ‘I am not a marketing person but my team and I need to know exactly what’s behind the idea of a brand from the earliest stage in its development in order to advise effectively on what is being proposed. It would be no good the marketeers coming to us a week before the launch with their proposals. We have to be deeply involved from the start.’

But engagement in development activity – highly important though it may be – is only a small part of the story. In order to protect his company’s brands in the 160 markets in which Unilever is active Richard Heath deploys not only his in-house lawyers but the strengths of 225 law firms stretching right across the world.

Some of these firms are well-known international outfits but in many cases Richard Heath has opted for niche practices which are the key IP specialists in their territories. Indeed, this approach echoes one of Unilever’s preferred mantras – ‘we’re multi-local
as well as multinational’.

Once more unto the breach
The ramifications of this ‘multinational-multilateral’ philosophy are reflected in a world-wide total of 160,000 individual trade mark registrations. So what is the strategy that Richard Heath adopts towards this massive task?

Initially he is coy in replying. To put it bluntly, this strategy is so central to the vital interests of the business that it is simply not something that Unilever will talk about to a general audience. It is confidential and there would be commercial risks in revealing too much about how the company undertakes this vast and hugely important function.

All Richard Heath will say, then, is that he and the company, ‘are committed to making every effort to protect our brands everywhere throughout the world using as many types of IP rights as possible and defending those rights accordingly.’ In other words, when it comes to responding to infringement, wherever that may take place in the world (including the Internet), Unilever will draw on its vast network of contacts in order that appropriate action can be taken locally at the slightest sign of any breach.

It’s a hard-line, comprehensive policy to protecting everything, everywhere by whatever means necessary. But this is understandable given the fact is that the threats are real and very wide-reaching. For example, like any other major brand Unilever is now under permanent siege from counterfeiters – organisations, often with strong criminal connections, which are abusing Unilever’s brands to raise money for suspect operations and to piggy-back into highly competitive markets which, by themselves, they could never penetrate.

Richard Heath worries about this because of loss of revenue to business, the possibility of poor quality imitations undermining trust amongst consumers and, of course, the real risk of health and safety problems arising from shoddy goods bought in good faith by loyal Unilever customers.

Attempting to police these abuses involves the Trade Mark Team in complex intelligence operations with a wide range of local contacts and lawyers as well as official agencies such as customs and police. As Richard Heath points out, many of the counterfeiting organisations now manage highly sophisticated operations, whose manufacturing base is frequently in China but whose distribution capacity extends around the world.

So the battle for Unilever’s brands has to be fought on many fronts. It demands constant vigilance and a willingness to respond to any threat virtually anywhere in the world. And as the Vitality Mission makes clear, it is a battle that the company simply cannot afford to lose – because, of course, the competition never sleeps.

For more information about Unilever visit www.unilever.com

This article first appeared in IP Review, issue 11

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