Building Your Brand by Managing Your Intellectual Property
By Lema Khorshid Founding Partner, Fuksa Khorshid, LLC | November 29, 2015
With new players constantly opening their doors, the hotel industry has become an extremely competitive game. One day, a hotel is the only one of its kind in its ZIP code, and the next, one opens around the corner and another right across the street. Hotel companies and operations constantly innovate novel and differentiated concepts to draw new customers in, and as a result the hospitality industry bears a surplus of very comparable brands. Whatever the concept and whatever the location, hotel executives need to differentiate their properties from the mass of competition. Using both the law and business of brands is the best tool at the hotel executive's disposal.
Any given brand can drive consumer loyalty because it allows the guest to recognize the hotel and the service it provides. Think about the term "brand loyalty". What does it really mean? Typically, it refers to the condition where a consumer has become sufficiently acquainted with the qualities of a service that he or she has no interest in trying a competitor. For hotels and other hospitality operations, building "brand loyalty" is crucial because the marketplace is so saturated with competition. There must be something about staying at a particular hotel that attracts guests to come back time and again. That special something could be comfortable beds, accommodating staff and flexible checkout times, or a friendly bartender who knows how to pour an appropriately stiff drink at the end of a long day. Whatever the redeeming quality is, a successful brand will communicate attributes about a given property - perhaps its location, its amenities, its staff, or even its price point. While a brand may start with a name and a logo, eventually the brand should weave itself through every part of the guest experience, from booking to checkout and beyond.
A good brand will be unique to the hotel concept, communicating features and services that are fundamental to the hotel. The first step to devising a quality brand is to conceive something no one else is using. Taking the time to ensure the chosen brand is available will pay great dividends. This is not only because the brand will help the hotel stand out from the crowded field, but also because it is crucial to make sure that a new brand does not infringe upon any other company's intellectual property. When speaking about brands, the relevant field will generally be trademark law.
The Law of Brands
In the United States, a trademark is any word, symbol, logo or other device that identifies the source of a good or service. It exists to protect consumers from confusion in the marketplace, or, in other words, from accidentally purchasing the wrong service because they mistakenly believed it to be affiliated with another service provider. Accordingly, should a hotel adopt a brand that is too close to that of another hospitality operation – in trademark lingo, one that is "confusingly similar" – the prior user can demand that the second user cease and desist its use, or the prior user can even sue for trademark infringement. Accordingly, the prudent hotel executive will compose a list of potential names, slogans, logos, color schemes, and the like, and then work with experienced legal counsel to perform a "knockout" search, looking for any potential conflicts with marks that already exist. Keep in mind that every country has its own trademark system, so hotel companies with international plans may want to contact counsel in the relevant country to run a separate search.
Regardless, once the brand has been cleared from substantial legal risks, the hotel operator can feel confident in pouring more resources into development, marketing, sales, and other functions related to the new brand. Using trademark law as a proactive resource and a guiding hand is less expensive and far less frustrating than resorting to it as a defense mechanism later on. Most hotel operators would not cut corners in other preparations to open a new property; don't fall into that trap when conceiving a new brand.