Who Owns a Brand? And What Does This Mean for Your Company?

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Elena

04/06/2023
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Developing your own brand takes a lot of time, hard work, and money, which is why most companies will wonder at some point who actually owns that brand.

It might sound obvious, but the truth is that determining who owns a particular brand can be a little complicated in the long run. To make things worse, there are often no hard-and-fast rules or laws that clearly spell out who the owner of the brand is, but this article is here to help you with this problem.

Who Owns a Brand?

Before determining who owns a particular brand, let’s talk about what a brand is. Simply put, a brand is just a marketing concept that is intangible but which helps people instantly identify a product, company, or even an individual.

When it comes to your brand, think of it as the main means for how a business or product is perceived by anyone who experiences it.

This includes not only customers who buy the product, but also employees, investors, and even the media. Once you establish your brand, then just the mention of that brand will conjure up certain images and perceptions in people’s minds, be they positive or negative perceptions. A brand is not a logo, product, or the company name — it is the image that those items portray.

That being said, it is not always cut and dry to determine who the actual owner of a brand is, for obvious reasons. Because of this, determining brand ownership can sometimes be difficult for both laypeople and even corporate lawyers.

Nevertheless, there are some opinions from highly qualified individuals and business owners that can help, and below are five of them.

1.  There Is a Big Difference Between a Brand and a Physical Product

Corporations realize that there is a huge difference between their brand and their physical product, even if many customers do not. If a customer buys a particular brand of shoes or an appliance, for example, and then alters the product, they are certainly allowed to do so.

Neither the law nor the manufacturer of the product can stop them, but they need to realize that this can affect the warranty.

This being said, the manufacturer still has to be concerned about this type of activity because in the end, these alterations can negatively affect their image in the public. This is especially true if the alterations are extensive. All companies want their products to be reliable and work the way they intended them to, so any type of alterations might possibly affect the companies’ overall image and brand.

2.  Does Brand Ownership End Once the Product Is Sold?

Many experts in this field feel that once a product is sold, the companies’ ownership of the brand ends. This is partly because it is impossible to continue to “own” it since the product might be altered after it gets into the hands of the consumer. This is also why many companies will set limits on what the customer can and cannot do if they expect to enjoy repairs and warranties in the future.

For example, if you buy a cell phone and alter it in some way, it may negate any warranty that is offered by the company. Simply put, the company has a right to expect the consumer to treat the phone the way that it should be treated.

Otherwise, the company may feel that they do not have a responsibility to make any repairs or replace the phone, which is only right.

3.  It Is Important for Brands to Establish Real Relationships

Simply put, since a brand involves images and perceptions, companies need to be diligent when establishing relationships with their customers. These relationships need to start before a product is sold and continue even after the sale.

If a company ends that relationship as soon as the product is sold, they are certain not to last very long.

Some companies assume that since their brand is not the actual product, and since most experts agree that they no longer own the brand once it’s in the hands of the consumer, that the relationship between company and customer ends there. For many important reasons, this is never the case.

4.  Companies Can Distance Themselves from the Product If it’s Modified

It’s all right for companies to acknowledge and accept that they no longer officially own the product once it gets into the consumers’ hands, but this also means that the company is no longer responsible for the integrity of the product. This is because once the product is modified, the company shouldn’t feel responsible for the modification, especially if it is modified in a negative way.

This responsibility should be recognized by both parties. Companies spend tons of money on research and development; therefore, they have a right to expect their products to be utilized in the proper way.

Customers have to realize that in addition to other reasons, their modifications can release a company from fulfilling its warranty obligations with good reason.

5.  Sometimes Lawyers Have Reasons to Worry

Sometimes the idea of brand ownership ending once a product is sold is not so cut and dry or obvious. For instance, let’s say that the customer buys the product, alters it some, and then attempts to resell it.

Surprisingly, this is not usually an illegal thing to do. It is, however, a potential concern for the company’s lawyers, and rightfully so.

Sometimes, the line between a legal act and an illegal act gets blurry, and when this happens it is sometimes necessary for the company to consult with their team of lawyers.

Just because a company relinquishes ownership of their brand after their product is sold doesn’t mean that they can forget about that product and what the customer may or may not do with it after the sale.

To Sum Things up…

Many experts agree that once a product is sold to the customer, the company ceases to own the brand. Of course, even today there is no clear answer when trying to determine a brand’s true ownership after the sale is complete.

Some CEOs, legal analysts, and marketing VPs agree with this outlook while others do not, especially since it is difficult to control what customers do with the product afterwards.

In essence, the brand is not a physical entity, so true ownership is always going to be difficult to determine.

If a third-party company buys a certain product and then tries to resell it after altering it somewhat, the manufacturer of the product may not even be aware of it. This, as well as other scenarios, makes it even more difficult to determine who the true owner is.

Conclusion

When it comes to ownership of a brand, many experts agree that it is impossible to determine true ownership. This is because a brand is intangible, while the product itself is not. There are also many ethical and legal considerations involved, such as when a customer or another company alters the product and tries to resell it.

Simply put, keeping in mind the tips mentioned above is good because being aware of potential problems is a smart thing to do. Regardless of what you consider the answer to be, it’s important to continue your relationship with the customer even after the sale.

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