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Brand Protection and the Globalization of British Business

  • Teresa da Silva Lopes and Mark Casson

Abstract

In expanding on earlier analyses of the evolution of multinational business that have drawn from concepts of competition and innovation, this study examines the strategies used by British multinationals, between 1870 and 1929, to protect the global reputation of their brands, which were crucial to their survival and success. Even after the passage of new trademark legislation in 1876, enforcement of trademarks remained expensive, and often firms preferred to negotiate, rather than to prosecute violations. Many trademark imitators were based in the newly industrializing countries of the time—the United States, Germany, and Japan—and were part of the British export supply chains as licensees, franchisees, or wholesalers. British firms responded to infringements by lobbying governments, appointing local agents to provide intelligence, and collaborating with other firms.

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This article was presented at the Annual Conference of the European Business History Association and at seminars held at Copenhagen Business School; at the Saïd Business School, University of Oxford; and at the University of Utrecht. The research was funded by the Economic and Social Research Council (Ref: RES–062–0193). Special thanks go to Paul Duguid, David Higgins, Paloma Fernández-Pérez, Patricio Sáiz, and several anonymous referees for their comments on earlier versions of this article.

1 Imitation and counterfeit goods from emerging markets are estimated to account for 5 percent to 7 percent of world trade. “Estimates of International Trade in Counterfeit and Pirated Goods,” Anti-Counterfeiting Coalition (IACC) (Washington, D.C., 2008).

2 The role of intellectual property rights protection in enhancing economic growth, and its ability to increase the returns to innovation, has been widely studied in economics and management. See, for example, North, Douglass C., Structure and Change in Economic History (New York, 1981); Demsetz, Harold, “Towards a Theory of Property Rights,” American Economic Review 57, no. 2 (1967): 347–59; Casson, Mark, Information and Organisation (Oxford, 1997); Landes, William M. and Posner, Richard A., The Economic Structure of Intellectual Property Law (Cambridge, Mass., 2003); Maskus, Keith E., Intellectual Property Rights in the Global Economy (Washington, D.C., 2000); Horii, Ryo and Iwaisako, Tatsuro, “Economic Growth and Imperfect Protection of Intellectual Property Rights,” Journal of Economics 90, no. 1 (2007): 4585.

3 Beaur, Gérard, Bonin, Hubert, and Lemercier, Claire, eds., Fraude, Contrefaçon et Contrebande, de l'Antiquité a nos Jours (Geneva, 2006); Mihm, Stephen, A Nation of Counterfeiters: Capitalists, Con Men and the Making of the United States (Cambridge, Mass., 2007); Berg, Maxine, “From Imitation to Invention: Creating Commodities in Eighteenth-Century Britain,” Economic History Review 55 (2002): 130.

4 Evidence presented to a Select Committee in 1862, before the British Trademark Act of 1875, confirms that there was intense competition in foreign markets by imitators of British successful trademarks. Report from the Select Committee on Trade Marks Bill and Merchandise Marks Bill (1862), Q.9, Q.929, Q.2461.

5 Casson, Mark and Wadeson, Nigel, “Export Performance and Reputation,” and Per H. Hansen, “Co-branding Product and Nation: Danish Modern Furniture and Denmark in the United States, 1940–1970,” both in Trademarks, Brands, and Competitiveness, ed. Lopes, Teresa da Silva and Duguid, Paul (New York, 2010).

6 Lopes, Teresa da Silva, Global Brands: The Evolution of Multinationals in Alcoholic Beverages (New York, 2007).

7 See, for example, Nicholas, Stephen J., “The Overseas Marketing Performance of British Industry, 1870–1914,” Economic History Review 37, no. 4 (1984): 489506; Channon, Derek F., Strategy and Structure of British Enterprise (London, 1973). For an exception, see Duguid, Paul, “Developing the Brand: The Case of Alcohol, 1800–1880,” Enterprise & Society 4, no. 3 (2003): 405–41.

8 Duguid, Paul, Lopes, Teresa da Silva, and Mercer, John, “Reading Registrations: An Overview of 100 years of Trademark Registrations in France, the United Kingdom and the United States,” in Trademarks, Brands, and Competitiveness, ed. Lopes, Teresa da Silva and Duguid, Paul (New York, 2010), 930.

9 Jones, Geoffrey, Multinationals and Global Capitalism (Oxford, 2005), and British Multinational Banking (Oxford, 1993); Benson, John, The Rise of Consumer Society in Britain, 1880–1980 (London, 1994); Fraser, W. H., The Coming of the Mass Market, 1850–1914 (London, 1981); Chapman, Stanley D., “British-based Investment Groups before 1914,” Economic History Review 28, no. 2 (1985): 230–47; Dicken, Peter, Global Shift: Mapping the Changing Contours of the World Economy (London, 2010).

10 Chandler, Alfred D. Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990). About British economic decline, see, for example, Elbaum, Bernard and Lazonick, William, The Decline of the British Economy (Oxford, 1986); and also Broadberry, Stephen N., The Productivity Race: British Manufacturing in International Perspective, 1850–1990 (Cambridge, 1997).

11 Lopes, Global Brands.

12 Aaker, Jennifer L., “Dimensions of Brand Personality,” Journal of Marketing Research 34, no. 3 (1997): 347–56; Lury, Celia, Brands: The Logos of the Global Economy (London, 2004); Milgrom, Paul and Roberts, John, “Price and Advertising Signals of Product Quality,” Journal of Political Economy 94, no. 4 (1986): 311–29; Schechter, Frank I., “The Rational Basis for Trade-Mark Protection,” Harvard Law Review 40 (1927): 813–33; Casson, Mark, “Brands: Economic Ideology and Consumer Society,” in Adding Value: Brands and Marketing in Food and Drink, ed. Jones, Geoffrey and Morgan, Nicholas J. (London, 1994).

13 Helmers, Christian and Rogers, Mark, “Trademarks and Performance in U.K. Firms,” in Trademarks, Brands, and Competitiveness, ed. Lopes, Teresa da Silva and Duguid, Paul (New York, 2010), 56; Mendonça, Sandro et al. , “Trademarks as an Indicator of Innovation and Industrial Change,” Research Policy 33 (2004): 1385–404.

14 The Trade Mark Act of 1875 allowed registration of the following: a name of an individual firm printed in a particular and distinctive manner; a signature by an individual firm; a distinctive device, mark, branding, label or ticket; any special and distinctive word or words or combination thereof used before the act came into force. Devices and labels, packaging and advertising or marketing were for a long time protected by copyright law, as they related to the tangible aspects of the brand's appearance.

15 Cases such as Re James Trademark Application in 1886 show that traders used shapes as marks, although they were not protected by law. As a result, companies such as Coca Cola were only able to register the shape of their bottles in 1994. Only in the 1993 Trademark Act were three-dimensional shapes allowed to be registered as trademarks. Re James' Trade Mark v. Soulby (1886) 33 Ch. D. 392.

16 Greeley, Arthur, Foreign Patent and Trademark Laws: A Comparative Study with Tabular Statements of Essential Features of such Laws (Washington, D.C., 1899). For an overview of national systems of trademarks registration in the United Kingdom and France, see Bently, Lionel, “The Making of Modern Trademark Law,” in Trade Marks and Brands: An Interdisciplinary Critique, ed. Bently, Lionel et al. (Cambridge, 2008); and Duguid, Paul, “French Connections: The International Propagation of Trademarks in the Nineteenth Century,” Enterprise & Society 10, no. 1 (2009): 337. Latin American countries and Japan had quite different systems of registration in relation to European countries.

17 International Convention for the Protection of Intellectual Property (1883); British Accession: Industrial Property Convention of March 20, 1883 (17 Mar. 1884), FO 93/33/124, National Archives, Washington, D.C.

18 The Madrid Agreement Concerning the International Registration of Marks from 1891 to 1991 (Geneva, 1991).

19 Higgins, David and Tweedale, Geoffrey, “Asset or Liability? Trade Marks and the Sheffield Cutlery and Tool Trades,” Business History 37, no. 3 (1995): 127.

20 Ridount, Herbert C., “National TM is Unsound Advertising,” Advertiser Weekly, 14 Feb. 1919, 5; “Proprietary Articles,” Advertising World, May 1905, 576; Schechter, Frank I., The Historical Foundations of the Law Relating to Trade-Marks (New York, 1925); Wilkins, Mira, “When and Why Brand Names in Food and Drink?” in Adding Value: Brands and Marketing in Food and Drink, ed. Jones, Geoffrey and Morgan, Nicholas J. (London, 1994).

21 Warren, Algernon, Commercial Travelling: Its Features, Past and Present (London, 1904); Friedman, Walter, Birth of a Salesman: The Transformation of Selling in America (Cambridge, Mass., 2004); special issue of Business History Review on salesmanship, vol. 82 (Winter 2008).

22 Colman's, 3 Apr. 1914, Directors' and Managers Meetings Minute Books, vol. 1 (box label 191) CON/1996/127, Unilever Archives, Port Sunlight, U.K.

23 Mr. Henry Browning, Merchants and Agents, of Messrs. James Hennessy & Company of Cognac to the Select Committee on Trade Marks Bill (1862), Q. 2462–2479. The primary concern was preventing use of trademarks abroad, especially in Germany. Hoffman, R. J. S., Great Britain and the German Trade Rivalry, 1875–1914 (New York, 1964); Buchheim, Christoph, “Aspects of Nineteenth-Century Anglo-German Trade Rivalry Reconsidered,” Journal of European Economic History 10 (1981): 273–89.

24 “The Advertising Art of J. & J. Colman Ltd.,” Oct. 1977, BRA 120, Unilever Archives, Port Sunlight, U.K.

25 “Colman's vs. Samuel Crump,” Nov. 1870, Superior Court of the City of New York, Book of U.S. Cases, 1996/27 (box label 167), Unilever Archives.

26 “Mustard Pots,” New York Times, 1 Feb. 1872, 2.

27 Dennison, S. R. and MacDonagh, Oliver, Guinness, 1886–1939: From Incorporation to the Second World War (Cork, 1998), ch. 5.

29 Minute Books, 1, 5 Dec. 1899, 24 Jan. 1900, and 19 Feb. 1900, Huntley & Palmers Archives, Reading, U.K.

30 Minute Books, 1, 5 Dec. 1899, 20 Jan. 1900, 13 Feb. 1900, and 26 Nov. 1901, Huntley & Palmers Archives.

31 These markets were Holland, the Dutch East Indies, Hong Kong, Cape of Good Hope and Natal, France, Australia, and China. Minute Books, 19 Feb. 1900 and 24 Jan. 1900, Huntley & Palmers Archives.

32 Papers of T. H. Appleton, Factory Manager, R/DP/F (19–33), Rowntree Archives, York, U.K.

33 Correspondence to and from T. B. Browne, 19 Aug. 1912, R/DP/F/2; 30 Jan. 1915, R/DP/F/26/2, Rowntree Archives.

34 Browne considered that money spent on worldwide registration was not like money spent in advertising, which must be kept up to be of value, but the name was one of the foundation stones of business. Report on interview with Mr. Griffin of T. B. Browne & Co., R/DP/F/21, Rowntree Archives.

35 Correspondence with T. B. Browne & Co. regarding the Table Jelly Powder Infringements in New Zealand, from 19 Oct. 1909 to 15 Sept. 1910, R/DP/F/26/2, Rowntree Archives.

36 Lopes, Teresa da Silva and Casson, Mark, “Entrepreneurship and the Development of Global Brands,” Business History Review 81 (Winter 2007): 651–80.

37 In 1899 Thomas Barratt, the chairman of Pears, was honored by newspapers around the world for his work in advertising. Unilever, “A Brief History,” Pears Collection, Unilever Archives; Wilson, Charles H., The History of Unilever: A Study in Economic Growth and Social Change (London, 1954), 72. For example, in 1887, Pears created the famous Bubbles ad, based on the painting of a young boy blowing bubbles by Sir John Everett Millais. Barratt also created glamour advertisements, using famous people such as the actress Lillie Langtry. Pears Collection, AFP 12/5/1, Unilever Archives.

38 It spent almost £300 registering its mark in twenty-two countries or territories in 1887—six years before international registration was simplified under the Treaty of Madrid. General Purposes Sub-Committee Minutes, 12 July 1887, Guinness Archives, Dublin. However, it was not until 1889 that the company trademarked the word “Guinness” in the U.K. Board minutes, London, 1 June 1889, Guinness Archives. “Guinness,” trademark number 87294, Trademark Journal 1889, U.K.

39 Secretary's Report, 1912, 206, Guinness Archives. A steady flow of registrations continued in the intervening years; for example, in 1904, the company registered its marks in a further seven countries. Secretary's Report, 1904, Guinness Archives.

40 For example, it was the first company to register its trademark in the United Kingdom when the Trademark registry opened on January 1, 1876. See Duguid, Lopes, and Mercer, “Reading Registrations.”

41 Owen, Colin C., The Greatest Brewery in the World: A History of Bass, Ratcliff & Gretton (Derbyshire, 1992).

42 Henry T. Nichols to Bass, 16 Feb. 1894; Jim Stewart to Bass, 18 Sept. 1894, both in Label Book, Bass Archives, Burton Upon Trent, U.K.

43 Price & Stewart to Henry T. Nicholas, 31 July 1894; Price & Stewart to Bass, 6 Dec. 1894, both in Label Book, Bass Archives.

44 Agreement between Bass and Wielmans-Ceuppens, June 1921, Label Book, Bass Archives.

46 Guinness preferred to prosecute individual firms rather than prosecute a number of imitators together. Trade (Dublin & Vicinity), Annual Report 1898, Guinness Archives.

47 “Guinness Extra Stout Apology from Hugh McMullar,” Belfast Telegraph, 25 Mar. 1939; “Apology to White Horse Distillers Limited,” Daily Record, 1 June 1932; “Apology to John Walker & Sons,” Kilmarnock Herald, 16 Mar. 1933. Apollinaris used the letter of apology from one of its imitators (Fisher) more repeatedly. This led Fisher to begin legal procedures against Apollinaris to stop them from publishing the apology repeatedly. “Police Court: Apollinaris Water,” Times, 19 Oct. 1874, 14 and 28 Nov. 1874, 11; “Fisher & Co. (Ltd.) vs. Apollinaris Company Ltd., Times, 24 Mar. 1875, 12.

48 Letter from Payne in India to Pears, 19 Aug. 1916; Letter to Rishton Lever Brothers from the Secretary of Pears, 12 Oct. 1916, AFT/04/3, “Imitations and Infringements,” Pears Collection, Unilever Archives; Times of India, 4 Mar. 1929 and 20 Feb. 1933.

49 Letter from Pears to Gollin & Co.,” 2 Apr. 1917, “Imitations and Infringements,” Pears Collection, Unilever Archives.

50 Correspondence between Gollin & Co. (Proprietary Limited), A. & F. Pears Ltd., Ed. Waters (Patent Attorneys) and D. Tilley about the infringement by the latter of Pears trademarks, for their unscented soap label in Melbourne, 7 Feb. 1917, 12 Feb. 1917, 2 Apr. 1917, AFP/04/8 and AFP/04/9, “Imitations and Infringements,” Pears Collection, Unilever Archives.

51 Letter from Armour & Company (Chicago, Illinois), 8 Aug. 1916, “Imitations and Infringements,” Pears Collection, Unilever Archives.

52 The law was changed in 1907, but even then, cases where the trademark had been infringed before the change of the law were dismissed. “Imitations of Trademarks in Japan,” Economist, 14 Dec. 1907, 12.

53 Ibid.; Power of Attorney for the Purpose of Registration of the Words Black and White in Japan, James Buchanan, 4 Apr. 1905 and 5 Nov. 2007, Minute Books, Diageo Archives, Menstrie, Scotland, U.K.

54 “Trademark Piracy in Mexico,” New York Times, 10 Aug. 1919; Phelps, Dudley Maynard, Migration of Industry to South America (New York, 1936).

55 “Urge Trademark Reform—Latin American Laws Held to Open Avenue for Extortion,” New York Times, 15 Apr. 1915, 14.

56 Grocers Journal, 11 Feb. 1905.

57 In this period, China did not have trademark law in place, but the Chinese were not yet considered to be a threat in the production of imitations. “British Trade Hurt by Japan in China,” New York Times, 19 May 1907, C1.

58 These were adopted for home and foreign markets. Minute Books, 10 Oct. 1912, 26 Feb. 1920, 14 May 1935, and 9 Dec. 1935, John Walker & Sons, Diageo Archives.

59 A. T. Shand, the representative appointed, had been a former traveler for Allsopps in the American market. Dennison and McDonagh, Guinness, ch. 5.

60 Secretary's Report, 1907, Guinness Archives.

61 Payne, P. L., British Entrepreneurship in the Nineteenth Century (London, 1974).

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Brand Protection and the Globalization of British Business

  • Teresa da Silva Lopes and Mark Casson

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