Serial stealing of Brand Power

December 8, 2011

Is borrowing the familiarity and favorability from a trusted company, in an entirely different industry, a good corporate branding strategy?

Question: What do the corporate brands in the left column have in common with the corporate brands in the right column?

Paramount Resources
Pixar Petroleum
Fox Drilling
Summit Resources
MGM Energy

Paramount Pictures
Pixar Animation Studios
Fox Television
Summit Entertainment
MGM Studios

Answer: Nothing, except for a word in the name.

According to a December 2, 2011 article in The Wall Street Journal written by Erica Orden, an oil and gas company in Calgary, Canada has decided to borrow its corporate and divisional names from the entertainment industry.

Paramount Resources is the parent company for its subsidiary, Pixar Petroleum. Paramount’s other holdings include Fox Drilling, Inc. and Summit Resources, Inc. Paramount also has significant investments in an energy company called MGM Energy.

Is it even legal? Maybe, because a trademark only protects you in the category in which the name was registered. In other words you cannot protect every possible application of your brand name. Is it clever? Yes. Is it ethical? No.

If it comes to a court challenge it is quite possible that Paramount Resources could prevail because the companies are so different that it is unlikely that the public will be confused, which is the acid test for this type of case. Well the public may not be confused between an oil company and an animation studio, but the serial borrowing of these brands is unsavory at best and could potentially be very damaging at worst. Even if the management of Paramount Resources doesn’t see the implied immorality of taking these brands for their own, its shareholders should carefully consider whether these actions are an indication of how the company will react to future issues. It is certainly a strange dilemma.

Consider the flip side of this issue. What if the unthinkable happens to the oil company? What happens if there is an oil spill and Pixar Petroleum makes front-page news? How do you think such an event will impact the other Pixar? We know that companies with similar names are “brand brackish” in other words both familiarity and favorability can blend somewhat. In my opinion the intellectual property attorneys should not take this usurping of brand equity lightly.

Even if it is found to be legal the question remains. Is borrowing the familiarity and favorability from a trusted company, in an entirely different industry, a good corporate branding strategy? In my opinion, it is not.

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