Member Article

You know what it’s like – you have a cushy job, you’re earning well, you’re travelling the world. Yet, you’re still not happy. The head honcho stubbornly refuses to retire, the designated successor clearly isn’t right for the job, and you have this somewhat awkward relationship with the next-in-line. Not to mention those irritating youngsters who keep on popping up from nowhere, inexplicably leapfrogging you! And then there’s your life partner, a real go-getter, egging you on – let’s do this, let’s go it alone, let’s create something that’s actually ours!

But how do you make sure that your brave new venture will actually work out? Simple, you do what Prince Harry and Meghan Markle have done: you turn to intellectual property (“IP”).

There’s been a great deal in the news about Harry and Meghan’s decision to scale down their royal life, to become part-time royals, to live abroad and, horror of horrors, to become financially independent. This financial independence thing seems to be very much based on IP, especially trade marks. According to news reports, the main vehicle for this financial success will be the trade mark Sussex Royal. The trade mark will seemingly be used for a whole range of goods and services. All the usual suspects are there – clothing, stationery, magazines and cards, as are some less usual ones, such as fundraising services, social care services and emotional support groups.

It has been reported that the couple have sought to protect the trade mark in various parts of the world. They have started with a trade mark application in the United Kingdom, which was initially filed in the name of agents (seemingly to avoid unwanted speculation). Since then, the couple have filed an International Registration covering Australia, Canada, the European Union (“EU”) and the United States. In the case of the EU, this would be done by way of a EU Trade Mark designation, in other words, one single application that covers all the member states. However, the couple are already running into the kinds of problems that the hoi polloi run into. A German applicant has filed an EU Trade Mark application for the trade mark Sussex Royal for beer and jewellery, and a US lawyer has filed an application to register the trade mark in the US.

In addition, it has been reported that multiple parties have filed notices threatening to oppose the registration of the Sussex Royal brand as a trade mark in the UK. It seems very likely that the couple will be getting involved in some trade mark oppositions.

However, branding experts are gushing. They expect great things of the Sussex Royal brand. One is quoted as saying that the couple “won’t need to negotiate distribution deals and start from scratch because they’ll have people queueing up.” According to another, the lucky couple “will be given a large pot of gold just for putting their name to something.” One analyst suggests that Sussex Royal will be the “most famous brand in the world”, leaving the brands of the Beckhams, the Obamas and Bill and Melinda Gates in the shade. Profits of around GBP500-million in the first year are being projected. Perhaps take all of this with a considerable pinch of salt, but it is worth discussing how this most simple of business models, trade mark licensing, actually works. It certainly is a business model that can bring great commercial success. In the language of lawyers and accountants you, as the owner of the trade mark, “leverage the brand”, thereby creating “revenue streams” through royalty payments. In the language of the layman, you basically let the brand do all the work.

You must, of course, legally protect the brand by way of trade mark registrations covering the territories and the relevant categories of goods and services. In order to register a trade mark, you must at least have an intention to use that trade mark. That intention does not have to be an intention to use the brand personally, and use by a licensee is acceptable.

What you then need to do is formally license companies to use your trade mark on particular goods or for particular services. An important component of that licence relationship is the ability to require the licensee to meet particular quality standards. The licensee will then pay you a royalty. Crucially, ownership of the trade mark will remain with you. A trade mark licence is therefore not dissimilar to a lease of immovable property, where the tenant is given the right to use the property, while being required to pay rent, take care of the property, and eventually return it.

Gaelyn ScottExecutive Head of IP [email protected] +27 83 632 1445