Two recent forced re-branding campaigns by Caltex Australia and Australian Geographic highlight the risks in using house brands under licence.
In the final instalment of Solubility’s 2019 Licensing Year in Review series, Louise Brunero and Jeff Bergmann discuss two recent lessons from well-known businesses trading under in-licensed names.
The iconic Australian brand AMPOL is set to grace the Australian fuel market again shortly with Caltex service stations to be re-branded after licensing negotiations with Chevron over continued use of the Caltex trade mark in Australia broke down.
A loss of rights to the name Australian Geographic has caused headaches for owners of former Australian Geographic stores, forcing two name changes in a month, and possibly contributing to the demise of the entire business.
That Caltex Australia plans to spend estimated rebranding costs of $165m rather than seek an ongoing licence, and Australia Geographic has been forced to undergo two rebranding exercises highlights the extent of the inconvenience that can arise when an in-licensed house brand ceases to be available.
Where possible, licensees should seek to lock down use of key brand trading names early. If permission to use a preferred name isn’t granted, the parties should consider frank discussions regarding possible brand name alternatives to reduce the potential for protracted disputes and costly rebranding exercises.
1995 saw its share of newsworthy events.
- Former NFL running back, broadcaster and actor O.J. Simpson was found not guilty of the murder of Nicole Simpson and Ron Goldman in Los Angeles, California
- “Toy Story”, the first feature-length film created completely using computer-generated imagery starring Tom Hanks and Tim Allen, was released
- Oasis “Wonderwall” topped the Triple J Hottest 100
- Iconic Australian fuel brand Ampol was phased out after it merged with Caltex
However, following a breakdown in 18 months of licensing negotiations with US oil giant Chevron, late last year Caltex Australia announced its intention to return to the Australian AMPOL brand.
In May this year Caltex Australia shareholders will be asked to approve the name change at the company’s AGM. The rollout of AMPOL service stations is set to start in June and a complete rebrand of the service station network is expected to occur within the next three years. Caltex hopes the return of an Australian brand to the country’s fuel market may provide a much-needed boost to fuel volumes for the retailer as customers choose to shop local. However, it appears we won’t be seeing an exact rewind to 1995 (nor the 70 cent per litre prices) as AMPOL is set to launch with a yet to be seen revamped look and logo. New filings in 17 classes for the word AMPOL and the logo below have been lodged with IP Australia over recent months.
While the rebranding will cost Caltex a reported $165 million, the company has flagged between $18 to $20 million in annual cost savings due to the removal of annual trademark license fees it paid to Chevron. While it is not possible to know the exact reasoning behind the negotiation breakdown, the failed license deal and shift to previous branding is a reminder to licensors and licensees that even for seemingly established brands and relationships (Caltex had been operating for 25 years in Australia), costs can be a bottom line and parties can and will vote with their feet.
Australian Geographic …. Curious Planet
October 2019 was a troublesome month for the Co-op bookshop, owners of former Australian Geographic stores. After losing the rights to use the name “Australian Geographic” in relation to its stores, Co-op bookshop’s brief rebranding to “My Geographic” fell foul of Blue Ant Media, owner of the Australian Geographic magazine and holder of the rights to its name. Despite the parties settling their dispute earlier in October, it appears Blue Ant Media were unaware what name the Co-op would choose to use in its place. Blue Ant Media expressed concerns that the new name “My Geographic” would confuse customers and demanded the Co-op choose something more distinct. Co-op has now rebranded for a second time from “My Geographic” to “Curious Planet”, and filed a trade mark application in multiple classes on 29 October.
However, Co-op bookshop entered administration in the same month and its administrators at PwC have since advised that it has been unable to obtain a viable offer to sell the 63 Curious Planet stores. It is unclear how much the forced name change contributed to this outcome, but it can’t have helped!