Consumer Packaged Goods and Trademark Law

Consumer Packaged Goods (“CPG”) are products that are sold quickly and at a relatively low cost, including food and beverages; beauty and personal care; and household products. Products within the CPG category are often defined by their marketing and “brand” presence, with the ultimate goal of creating strong brand equity. Brands necessarily start with a trademark, and CPG attorneys oftentimes stress the importance of ensuring a viable trademark (i.e. one that is distinctive and free from trademark infringement risk). This is especially true since the lifecycle of a brand must necessarily start with a trademark, and while common law trademark rights are ok, they pale in comparison to those of a registered trademark.

The standard business school model of a product brand lifecycle, including CPG brands, holds that once a brand reaches maturity, an inevitable (or near-inevitable) stagnation will occur. This model suggest that it is not a matter of whether a brand will decline, but when.

Stages of Brand Lifecycle:

1. Introduction: Product sales are low, and growth is slow.
2. Growth: As awareness grows, sales rise quickly, and the brand continues to build.
3. Maturity: The market is well-served by the brand and its competitors; these competing companies work hard to win the sale and maintain customer loyalty.
4. Decline: The company cuts costs at the retail level to maintain customers loyal to the brand, while focusing on the best-selling products.

So, if a CPG brand’s decline is inevitable, how do you explain the longevity of brands from companies like Nestle, Proctor + Gamble, and Coca-Cola? Those companies have brands that have been around for years! What do these companies do to maintain their brands?

1. Heavy advertising: Most companies hire advertising firms to create a series of advertising campaigns that run for months, and often years.
2. Brand extensions: For example, Coca-Cola created extensions to include: Diet Coke, Coke One, and Coke Life.
3. Legal formalities: Trademark attorneys would all agree that a system for trademark registration (US and worldwide, as applicable), trademark maintenance, trademark monitoring and, where necessary, trademark enforcement is critical.

In our next blog installment, we will discuss how some of the fastest-growing CPG companies drive their brand equity.

This blog post contributed by Traverse Legal Counsel and CPG attorney Lorrie Orton Heath, who focuses on providing business and legal strategy to Consumer Packaged Goods companies, including food and beverage products, and life sciences companies, including those geared toward pharmaceuticals, medical devices, and medical equipment.