Trademarks and Viral Marketing

The Risks, the Rewards, The Rules

By Marcus Luepke and Julia Matheson
December 2010

It’s a no-brainer that viral marketing is here to stay. The advent of social media and prominence of the Internet in the lives of most of us in the first world have permanently changed the dynamics and rules for product marketing. For new and established players alike, viral marketing can be a powerful and far-reaching tool, offering exponential market visibility and brand engagement for little to no cost. But as we all know, nothing is ever truly free. Just as viral marketing can make a brand—it can just as easily damage or destroy one. Once a brand’s story is in the hands of the consumer—and beyond the exclusive control of the brand owner—the impact on a brand’s image and fundamental messaging efforts can be significant, and not always favorable.

The Silly Bandz phenomenon, in particular, illustrates one of the most fundamental lessons from trademark law. The more descriptive and/or weak the mark, the higher the risk that viral marketing will result in consumer misuse that can ultimately defeat, rather than strengthen, a mark’s value and recognition in the marketplace. The reason rests in a fundamental tenet of trademark law—and the tendency of modern consumers to reach for the quickest abbreviation, nickname, or acronym to communicate.

You’ve certainly heard the phrase that “all marks aren’t created equal.” The trademark law “ranks” marks in one of four categories for purposes of deciding whether, and the extent to which, a mark should be entitled to protection against competitors:

(1) fanciful, coined, or arbitrary;
(2) suggestive;
(3) descriptive;
and (4) generic (and unprotectible)

Marks that are fanciful or coined (i.e., marks that have no independent meaning or significance apart from their existence as a trademark such as EXXON for gas or MICROSOFT for software); or arbitrary (i.e., marks that are comprised of a recognized word used in an arbitrary way, such as CAMEL for cigarettes, or APPLE for computers) enjoy the broadest possible scope of protection. They also require the highest level of up-front investment to educate consumers about the products they identify. Suggestive marks (i.e., marks that evoke but don’t describe a product such as COPPERTONE for tanning lotion or WHIRLPOOL for washing machines) also require a significant up-front investment to help consumers make the connection between the mark and the client’s product, but score high on the “protectability” scale. Descriptive marks (i.e., marks that convey an immediate idea about the qualities or characteristics, purpose, or function of the goods), on the other hand, score low on the “protectibility” scale. And while they may make initial promotional efforts easier, their ultimate cost may be far higher as the client will have to spend a significant amount of money to continuously persuade consumers that the primary association of those descriptive terms should remain with the client, and not the thing itself (i.e., cereal with bran and raisins).

The SILLY BANDZ phenomenon—which, thanks to viral marketing, social media, and clever product placements recently exceeded $200,000,000 in sales—provides a useful illustration of the risks posed by a weak mark (and the current subject of a trademark-infringement litigation pending before the Northern District of Ohio). To win their case of trademark infringement, the owners of the SILLY BANDZ trademark will need to demonstrate to the court that consumers view SILLY BANDZ as the proprietary term for products originating with their company rather than as the name for this new product category itself. But they may face an uphill battle. A quick Google search reflects widespread generic use of SILLY BANDS (in its tradition spelling) by marketers and members of the public alike to identify the product category and the trend more generally. Faced with a new product category and no easy generic reference, the public seized the easiest descriptor available—namely, the SILLY BANDZ trademark—to identify this exploding product category. And the SILLY BANDZ mark, comprised of a misspelling of the generic term “bands” (from rubber bands) and weak and widely used term “silly” (in the product category of toys and games and products for children), was particularly vulnerable to this type of use. What’s clear is that a more unique and distinctive mark (one falling in the realm of the coined, arbitrary, fanciful, or suggestive) would not have been such an easy target for consumer misuse.

What’s the takeaway lesson for future viral marketers? If you plan to rely on the public to bolster your product recognition for a new product category, you need to give the public an easy way to identify that category other than by use of your mark. And, while viral marketing will always present a risk to brand value, the more distinctive your mark, the lower the risk that viral marketing (and widespread consumer use of your brand name) could defeat your trademark rights altogether.