Rebranding: what are the key considerations?

If you’re a brand nerd like me, it may have caught your attention recently that WHSmith is to rebrand its high street business to TGJones, following its agreed sale to Hobbycraft owner Modella Capital. Whether the rebrand will be a success or failure remains to be seen, and it will be interesting to see how it plays out.

The importance of your brand cannot be overstated. It is a big decision to rebrand, and there are a number of key legal (and commercial) points you need to consider before committing to disposing with your old name and starting anew.

Trade marks

Firstly, if you decide to completely change your brand name, this is likely to lead to the cessation of use of a number of your existing registered trade marks, which will result in their vulnerability to revocation actions on the basis of non-use (more on this below). In WHSmith’s case, the WHSmith name will still be used at airport, railway station and hospital outlets (which are not being sold to Modella Capital) so their trade marks will still be used in relation to the goods and services under which they are registered, and so they do not have to face this particular problem.

Coming back to revocation actions; in summary this can be brought against an existing UK registered trade mark if the mark has not been put to genuine use for a continuous period of five years, provided the initial five year period since the trade mark was registered has elapsed (during which time there is a grace period, and a revocation action on the basis of non-use cannot be brought).

Therefore, if you completely change your brand name, your old UK trade marks may become vulnerable to a revocation action and you would need to be able to demonstrate genuine use of the marks, or risk losing them.

You may wonder what the point of keeping these marks is, giving you are changing your brand name. Firstly, your IP assets add to your company’s overall value, and this is a key aspect that potential investors and buyers look at when assessing your company’s worth, so it’s worth taking this into account before risking the loss of a significant portion of your IP portfolio. Secondly, what if the rebrand goes wrong, and you want to reinstate the former name? (Read on, as there is a case study on a rebrand disaster that you may find interesting below.)

Of course, another thing to consider when changing your brand name is that you will need to file a new trade mark application for the chosen name (and carry out appropriate clearance searches, to ensure your new name is not already taken). It is worth taking this step at an early stage in the rebrand process, given the typical period from application to registration for a UK trade mark is 3-4 months.

Passing off

The other key point to consider from a legal perspective is passing off. A claim of passing off (i.e. essentially restricting someone from representing their goods and services as those belonging to you) requires you to have goodwill and reputation attached to the relevant goods and services.

Case law demonstrates that whether goodwill has been acquired depends on factors such as sales, customers and marketing spend. Therefore, the longer your mark has been in use, potentially the greater your goodwill and the stronger your rights in relation to a passing off claim. Turning back to WHSmith, whilst they would currently enjoy significant goodwill and reputation in relation to the WHSmith brand, they would have precisely zero goodwill and reputation in relation to TGJones.

So, this is something else to consider when deciding to rebrand – is it worth throwing away the goodwill and reputation you have acquired so far? Of course, if your brand’s reputation is in a bad place, a rebrand and a chance to build goodwill and rebuild your reputation from scratch may seem attractive.

Case studies

So, what has Modella Capital got to look forward to? A rebrand can be a roaring success or quite the opposite.

One example of a recent success story is the rebrand of Dunkin’ Donuts to Dunkin’. This was a clever way of not throwing all of your existing brand capital out in terms of the name itself, whilst repositioning your brand offering and conveying a different meaning (i.e. not just focusing on donuts, but also beverages and other on-the-go products).

One example of a not so successful rebrand is Post Office’s infamous name change to Consignia in 2001. Whilst the name was intended to convey trust and royalty (through ‘consign’ and ‘insignia’), it did quite the opposite and, amid increasing losses and public humiliation, Post Office rowed back to the original name 16 months later.

So, in summary, there are a number of factors to consider when rebranding. Provided you do your research and take appropriate legal steps, there is no reason why the rebrand cannot be a success. However, it is important to consider the brand recognition and goodwill you have built in your brand so far, and whether it is worth leaving this behind in favour of a fresh start.

Whether the TGJones name takes off remains to be seen, but it is certainly one I will watch with interest.