15 Oct’18

From Santa Claus to Kaepernick: The Role of Brand Association in Building Iconic Brands

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Iconic brands share many common attributes that a brand holder must build over time and actively manage in order to maximize the value of the brand, also known as “Brand Equity” (or Brand Value).  In a previous post, I explored the Brand Extendibility component of Brand Equity.  One other key component is Brand Association. Building a positive Brand Association is one of the critical components of building a relevant and valuable brand — Amazon is associated with efficiency; Apple is associated with innovation; the Gold Rush often triggers consumers to think of Levi’s; animated films are associated with Disney whether or not they are actually produced by the company.

Brand Association: Defined

“Brand Association” encompasses attributes such as emotions, products and images that trigger consumers to think of your brand, and that come to mind when they interact with your brand. The Coca Cola brand has done a great job evoking feelings of happiness and kinship from its consumers, and furthermore, the company has succeeded in associating itself with the Christmas holiday in the U.S. – so much so that it has actually had a tangible impact on the embodiment of Santa Claus as we know him today. Brand Association plays a key role in consumer purchase decisions, and can help bolster other components of Brand Equity, such as Brand Loyalty. Conversely, Brand Association can become negative very quickly, leading to consequences that are extremely difficult to undo; for example, the British Petroleum (BP) brand has developed a negative association as a result of the disastrous oil spill of 2010, which left many feeling angry and disappointed with the brand. Reversing this association and preventing consumers from immediately thinking of this event when interacting with the BP brand is the large and difficult task of the BP brand managers.

Creating an Emotional Brand

Brand Association is strengthened by the ability to conjure emotion from the brand’s consumers. The book Basics of Branding: A Practical Guide for Managers, by Jay Gronlund, discusses the key principles for developing and maintaining a strong brand. According to Gronlund, “you’re not there until you have an emotional brand;” echoing the notion that the most valuable and iconic brands have an emotional tie with consumers.

One way to evoke emotion is by taking a stance on a cultural issue. Whether or not specific consumers agree or disagree with the stance that a brand chooses to take, it is common wisdom that the action itself has the potential for great impact on Brand Association, and ultimately on Brand Equity. One could argue that Cheerios’ open embrace of “non-traditional” family constructs, and conversely, Chick-Fil-A’s embrace of traditional religious values, have each had a large impact on the respective companies’ Brand Equity.

One recent example of emotional branding by taking a stance is Nike’s “Dream Crazy” ad campaign featuring Colin Kaepernick. This campaign received enormous press coverage and viewership outside of just its paid placements (the YouTube video of the ad has over 26 million views on the company’s page as of this writing). Over the years, Nike has masterfully constructed an emotional brand that is often associated with overcoming adversity and celebrating one’s abilities. The company’s slogan of “Just do it” carries a certain emotional weight as a call to action for anyone doubting themselves. With the recent Kaepernick ad, the company is clearly trying to  appeal to the emotions of pride and passion by showcasing a variety of athletes overcoming hardship in the form of cultural, physical and societal barriers to achieve greatness in and out of their sports.

The Effectiveness of Cultural Branding

What made the “Dream Crazy” ad campaign highly efficient, is Nike’s utilization of Cultural Branding, a process that has taken shape in the digital era along with the rise of social media. Cultural Branding is a nice vehicle for emotional branding in that it makes the campaign highly targeted and focused, thus appealing to people’s emotions in the most effective way.  An HBR article titled “Branding in the Age of Social Media” breaks down the framework for Cultural Branding into 5 steps:

  1. Map the Cultural Orthodoxy – Identify the cultural conventions that the brand intends to challenge given its missions and role in society
  1. Locate the Cultural Opportunity – Identify the alternatives to the Cultural Orthodoxy that consumers are searching for
  1. Target the Crowdculture – Cater to the consumers that have pioneered the Cultural Opportunity. The rise of social media has allowed for increased access to subcultures that drive broader cultural change
  1. Diffuse the New Ideology – Communicate and make mainstream the new ideology that the brand is representing
  1. Innovate Continually, Using Cultural Flash Points – Continue this process as new Cultural Orthodoxies are identified and challenged in order to build and maintain the authenticity of the brand as a cultural icon

With the “Dream Crazy” campaign, Nike has embraced the elements of Cultural Branding. The Cultural Orthodoxy surrounding the acceptance of societal barriers and the current state of social justice is the challenge that Nike has chosen to pursue, recognizing the Cultural Opportunity to embrace the ideologies of freedom, equality, and unbounded opportunity. Naturally, the company has framed its efforts around the sports culture in general; but more specifically, we see the campaign targeting a number of different subcultures in the advertisement, collectively forming the Crowdculture, which Nike hopes would act as a conduit to Diffuse the New Ideology to a broader audience. In a pre-digital era, targeting these underrepresented cultures may not have allowed Nike to reach the critical mass it requires as a global, public company. However, in the age of social media, the targeting of subcultures has not only become easier, but has become an extremely effective tool for brand strategists to spread their message and impose their ideologies on the broader society.

The Aftermath of “Dream Crazy”

For Nike, much has been made about the decision to endorse Colin Kaepernick and launch the ad campaign. People have been seen across media platforms burning the company’s gear or otherwise publicly denouncing the brand. But did this decision actually hurt the brand? Or did the effort serve to bolster Brand Equity even further?

A recent study published by Quid, a big-data analysis and visualization company, provides some insight on the buzz generated by the campaign. According to the article, the “Dream Crazy” ad received 15% of all media coverage surrounding controversial ad campaigns over the past 16 months – more than any other campaign. Next, they analyzed 1,500 articles specifically covering the campaign and noted that 31% used language that was skewed negative, 13% positive, and the remaining 56% neutral – which is actually noted to be favorable compared to the “predominantly negative” reception of other campaigns such as the Kendal Jenner Pepsi advertisement and the H&M sweatshirt event. With these 2 analyses in mind, we see that the campaign generated significant press coverage for the brand, meaning its messages were conveyed (well-received or not) to a very large audience, thus fulfilling the 4th principle of effective Cultural Branding. The campaign seems to have strengthened Nike’s image as an emotional brand, unafraid to push boundaries and take a stance.

The Kaepernick campaign is just another example of how Brand Equity is built through positive Brand Association, achieved through emotional branding and carried through Cultural Branding. Somewhat counterintuitively, standing for something greater than the product itself, much like Cheerios, Chick-Fil-A and others, is a driving force behind the sale of Nike goods.

Full article here
03 May’18

IP Monetization: Realizing Hidden Value in Time of Decline

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Management teams of high-tech companies often overlook the additional shareholder value to be realized by developing strong IP portfolios, and are therefore ill-equipped to extract that value in times of decline in their companies’ life cycle.

The Business Life Cycle of high-tech companies has been a path well-traveled, and the management teams of most high-tech companies are guilty of missing an important fork in the road off that beaten path. Traditionally, the “Business Life Cycle” consists of 4 stages; Startup, Growth, Maturity, & Decline. Many companies fall under one of these broad categories, and furthermore, many management teams make key business decisions based on what the definition of their current stage tells them. The narrow focus of management seeking to move their company along the traditional Business Life Cycle results all-too-often in their untimely arrival to the Decline stage. We at Foresight believe that by implementing the right Intellectual Property (IP) strategies early in the Life Cycle, companies can extend their life cycle and generate additional shareholder value while managing to stave-off heading into a stage of Decline.

Management teams of a business in the Startup stage are focused on product development, developing sales strategies, and doing everything they can to stay afloat. Those fortunate enough to cross the chasm into the Growth phase begin solidifying their internal operations, investing heavily in client relations and new business development, and establishing their position in the market. After several years, the Maturity stage sets in, growth slows, and the business becomes far more predictable. It is at this point that many companies see themselves down one of two paths. The first is the path of reinvestment, under which the company essentially restarts its life cycle with a new product line or new target market or a new acquisition. The second path is one on which a company simply accepts its imminent decline and grinds to a halt. For companies on this path of Decline, management must recognize that there is another fork in the road.

Specifically, in the high-tech industries, it may be time to introduce a stage of the life cycle in between Maturity & Decline. That stage is IP Monetization. Too many high-tech firms live out their days in the Decline stage, winding down the business, losing key customers, and ultimately watching their remaining shareholder value dissipate. At the end, the company’s IP assets – which were once the foundation for years of cashflow –  are liquidated at an auction or through an asset “fire sale”, often at a steep discount. In these cases, the company’s shareholders are missing out on a potential return on investment on the assets that they financed, a return that could have been achieved through the execution of an IP monetization strategy.

Two notable examples of IP Monetization execution are companies such as BlackBerry and TiVo. These companies have successfully extended their life cycles, post-Maturity stage, and have found success in the IP Monetization stage of their corporate life cycle. Shareholder value has been retained as these companies pursue an IP licensing strategy for the technology that once made their operating business a success. For competitors that outlasted the company, or emerging players who are introducing next generation embodiments that leverage the technical innovations of Mature company offerings, the IP assets of post-Maturity stage companies are of extreme value. IP Monetization allows companies such as BlackBerry and TiVo to do 2 things: 1) extract value from their IP portfolio from competitors who may have been infringing during the peak of their competition, or 2) share in the profits of the next iteration of the company’s core technology as next generation companies seek to innovate on the platform of the existing technology. Look no further than TiVo’s recent financial performance for the huge potential to be realized in the IP Monetization stage of business. The company’s revenue grew 57% from 2015-2017, with over 95% of 2017 revenue attributed to “licensing, services and software.”

The key to introducing this new stage of the Business Life Cycle is educating entrepreneurs and managers on the importance of a solid IP strategy early on. Having an understanding of the value of intellectual property outside of a company’s current operating business will ensure that the shareholders who funded the creation of the IP portfolio are able to realize returns on its full value. However, to achieve the full value potential, management must develop a strategy early in the life of the company and endeavor to develop a forward-looking IP portfolio rather than taking the easy road of constructing a portfolio to narrowly protect its product (known as a “defensive” approach). Following a narrow defensive approach to IP management reinforces the traditional Business Life Cycle. It’s time for high-tech companies and their shareholders to take the fork towards IP Monetization and plan for it when they create their IP portfolio and strategy.

Full article here
19 Dec’17

Year in IP: 3 Outstanding IP Deals of 2017

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The past year has seen some exciting developments in the IP marketplace, as well as in the technology markets where the underlying innovation is created. As a way to recap the 2017 “Year in IP,” we wanted to highlight three deals that uniquely reflect this year’s trends and the factors impacting the market (listed below in no particular order). These IP deals were not necessarily selected for their size, but for their indicative nature of a set of circumstances that exist in the current markets that made these deals possible, and even necessary, for the parties involved.

  1. Transfer of Allergan’s Patents to the St. Regis Mohawk Tribe

    In September 2017, pharmaceutical giant Allergan executed a deal with the Saint Regis Mohawk Indian Tribe to transfer ownership of all Allergan patents related to the eye drug Restasis to the Tribe. The St. Regis Tribe received $13.75 million upfront for the deal, and is eligible to receive up to $15 million in annual royalties. The deal takes advantage of the Tribe’s sovereign immunity status which essentially shields the patents from challenges with the USPTO’s Patent Trial and Appeal Board (PTAB) known as Inter Partes Reviews (or IPRs).  This deal comes at a critical time, just as Restasis starts to face generic competitors.  For more coverage of this deal, please read here.

    We selected this deal because it represents the forces of change in the IP marketplace, and how IP holders find ways to circumvent changes in patent law in ways that the legislator never imagined possible.  Love it or hate it, this deal is interesting and thought provoking, and has been one of the most polarizing events in terms of reactions from various stakeholders in the IP marketplace.  Several lawmakers frowned upon the move, and have since introduced bills to make similar IP transfers illegal.  It should be noted that public universities also enjoy sovereign immunity status.  Earlier this year, the PTAB dismissed IPR challenges against the University of Florida based upon its claim of sovereign immunity.

  2. AT&T’s Patent Sale to Uber

    This ground-breaking deal represents a major acquisition of 87 issued patents and 5 patent applications by Uber from AT&T in 2017 (for an undisclosed amount). The AT&T patent acquisition gives Uber a portfolio of patents having priority dates pre-dating Uber’s formation in 2009, as well as most of the ridesharing industry in general. The IP covers various technologies related to messaging, call handling, routing network traffic, VoIP, and billing. Five of the AT&T patents are specifically related to ridesharing.  This deal has recently been named the LES USA-Canada’s High-Tech Sector’s Deal of Distinction for 2017, and received an award at the LES Annual Meeting in Chicago.  For more coverage of this deal, please read here.

    We selected this deal because it represents a trend of multi-billion dollar startups (also known as “Unicorns”) buying patents to “backfill” their portfolios and enhance their IP position (the term “Backfill” is reserved for buying patents with priority dates pre-dating the inception of the company).  We predicted this trend in late 2015, when we published a study on the IP holdings of Unicorns, titled: “The Naked Truth: Why 30% of Unicorns Have No patents”.  One of the most important findings in our study was the documentation of an “IP Gap”: the IP holding distribution within the group of Unicorns was not correlated with the value distribution. We further observed that this “IP Gap” varies greatly by industry, with some industries, like Consumer Internet (the industry where Uber has been classified) completely out of balance.  We predicted that: “this gap could serve as an opportunity for increasing the liquidity of some IP assets in the marketplace, as some of these companies will no doubt show up as buyers as their exit event approaches, as they try to enter new markets, as they encounter incumbent patent lawsuits, or any such event that forces them to strengthen their IP position.

  3. OnStream’s Patent Sale in Japan

    In February 2017, our client, OnStream Media Corporation (OTCMKTS: ONSM), entered into a Patent Purchase Agreement with a group of buyers in Japan, for the sale of 2 U.S. Patents and related U.S. Patent Applications, including all rights, title and interest in those patent assets. In accordance with the Agreement, the total purchase price is a minimum of $40 million and a maximum of $80 million. The patents address live streaming of audio and/or video from multiple devices to a storage location, such as the Internet or cloud, and the ability to access and retrieve the audio and/or video from multiple devices, whereby the content is not stored on the device.  The patents had been acquired by OnStream through the acquisition of Auction Video in 2007, and the company kept prosecuting and maintaining the assets over the years.

    We selected this deal because it was entered into by one of our IP strategy clients, following a monetization plan that we devised for them.  It shows that if you understand the IP marketplace and where buyers are, patents can still be sold and monetized with sizable returns.  The deal represents a trend that we are seeing in the patent marketplace over the last few of years of foreign buyers interested in US patents as a way to obtain freedom to operate in the US, or just to get a foot in the door in the lucrative US enforcement market.  Japan is one of the latest countries to come onboard the patent monetization scene, following in the footsteps of other Asian countries, like China and Korea.  This is a very complex deal that is still unfolding, and we hope our client is successful in realizing the full potential of these assets.

Have you come across an exceptional IP deal in 2017? Let us know! We are happy to include your IP deal in our future newsletters.

Full article here