As we have written before, any brand extension requires the necessary due diligence to mitigate the risk of a serious trademark conflict. And, from a trademark perspective, both strength and scope of rights necessarily expand as the number of different goods and services sold under the brand grows.

If recent marketing research on brand extensions is followed by brand owners, the necessary due diligence is going to become that much more important — both risk and reward will become significantly elevated with the advent of more dramatic and surprising brand extensions.

Karl Greenberg, reporting for Marketing Daily of MediaPostNEWS, writes about a new study from Northwestern University’s Kellogg School of Management, indicating that the perceived quality of a brand is far more important than the fit between the heritage product it is known for and the new extension. He quotes Kelly Goldsmith, Assistant Professor at Northwestern’s Kellogg School, as saying: “Historically, there has been an overestimation on the importance of fit,” with the research apparently concluding that Nike deodorant (high perceived quality, low fit brand extension) would fare much better than CVS deodorant (high fit, low perceived quality brand extension).

So, on the risk side of the trademark equation, the larger the gap between the core goods and the newly expanded goods, the greater the chance for a serious conflict with intervening third party rights that must be taken into account when determining availability of the brand-name and mark for use on the new goods.

And, on the reward side of the equation, to the extent this research begins to justify brand extensions here-to-fore thought too far afield to be viable, they have the potential for greatly expanding the strength and corresponding scope of trademark rights since they will not only be unrelated to the brand’s core goods, but they are also likely to be unexpected or otherwise surprising to consumers.

Of course, the more unrelated the expanded goods are to the core goods and the more unlikely consumers would expect them to come from the same source, the stronger and broader the resulting rights will become. 

What do you think, are we going to start seeing more “less-fitting” brand extensions?

  • Yes, if only to support the classification of a mark as famous. The exception is probably for suggestive marks. The suggestiveness will be difficult to transfer, and more so the farther you get from the core goods.

  • Sean Grace

    I think we may see some “odd” extensions from brave brands looking to shake things up a bit and take market share where they can get it. Those on top may not think it worth the risk. Other big brands (Kraft, for example) are splitting up their business in order to get into new categories. I guess this minimizes risk, though it may also minimize reward if the strong brand name is not behind it to drive that perceived quality, as in the Nike deodorant example from the article.

  • Alvaro Gallart

    I think we will see lots of brand extensions in the near future, “more or less fitting” but proliferation is to come. Brand extension is an option but still is a source of business growth, if the boss is ever asking for growth, overextension is an implicit risk. Some brands will master their meanings to incorporate variety of products/services to gain, some others of course will fail, blurring its core mental associations to get where no brand wants to stay: at the “ACME brand syndrom” type of perception.