Legal Issues to Consider When Collaborating With Other Brands

By Kelly Weiner

Who doesn’t think that Doritos Locos Tacos is the most amazing option on the Taco Bell menu?

Target’s Missoni line generated a shopping frenzy, and its collaborations with Lilly Pulitzer, Altuzarra, Phillip Lim, Prabal Gurung, Zac Posen, Jean Paul Gaultier, and Alexander McQueen make it a superstar partner for co-branding.

Febreze is another winner, partnering with such products as Mr. Clean, Tide, Bounce and Downy.

Starbucks recently announced its partnership with Spotify, linking Starbucks’ company-operated stores in the U.S. and My Starbucks Rewards loyalty members with Spotify’s global users. And Spotify has already found success in its partnership with Uber.

Collaboration can be a fun way to increase the value of your brand. You can expose your brand to an entirely new market or territory, strengthen your existing brand awareness, or create additional revenue streams.

Not all collaborations, however, are product driven. Other examples include event sponsorships, event hosting, fund-raising partnerships with charities, long-term relationships between charities and social enterprises, and co-branded contests or giveaways.

Nor are all collaborations successful: like Google Glass trying to get hip with Warby Parker.

From a marketing perspective, you’ll want to identify what you want to achieve out of a relationship, the possible monetary and non-monetary benefits to your brand, and whether you’re being true to your brand (i.e., the announcement that McDonald's would be an Olympic sponsor of the 2012 games faced heavy criticism from health campaigners.).

Once you’ve found your perfect strategic partner, it’s important that your brands are on the same page—literally. Here are a few legal considerations:

1. How will your brand will be featured in the co-branding venture?

Your co-branding campaign will fall likely fall into one of three categories: ingredient co-branding (Febreze/Tide), cooperative co-branding (Target/Missoni), or complementary co-branding (Seagram's/7Up). The category of the relationship and power behind the partner brand will likely dictate the size and placement of your brand in marketing materials.

For example, a tech startup’s launch party will take place at a local club; a liquor distributor will provide refreshments and give away commemorative gifts branded by one of its liquor brands. How many brands will the attendees see in marketing materials? Will one brand be featured more prominently than the others?

2. How will you maintain brand integrity?

It's important to maintain your brand integrity throughout a co-branding campaign. Co-branding partners will typically share style guides, each party licensing the right to use its brand to the other so long as the other party’s use conforms to the guidelines. Approval rights are worth negotiating for, and quality control provisions are a legal necessity when granting someone rights to use your branding.

Consider the reputation of your partner. I negotiated a deal involving a certain “bad boy rock star” where we had to give the celebrity some leeway to maintain his public persona. However, we wouldn’t tolerate conviction on a felony or misdemeanor charge.

Another point to consider: if the relationship will last beyond a single event, how can you terminate the campaign if things start to go sour?

3. Will exclusivity be part of the relationship?

Will you ask for exclusive rights to use your collaborator’s branding in a particular product or service category, or in a particular industry? Will the relationship be limited to a particular country or region?

4. Who will bear any legal, market research, or product development costs?

Don’t overlook the costs involved in creating a co-branded campaign. If one or more of the parties will be entering into a new territory, who will bear the cost and responsibility of the trademark clearance searches for the brand? If R&D is necessary, who pays and who owns any new “inventions” coming out of the R&D?

For example, it’s unlikely that Carvel’s Cinnabon ice cream flavor was made by blending Cinnabon cinnamon rolls into a vat of ice cream. A lucky chemist had to develop the new flavor ingredient. Who owns that formula?

Conclusion

Make sure you have your legal deal points in place before you try to maximize your brand through collaboration. Then celebrate catapulting your brand into new markets by heading to your local Taco Bell for some Doritos Locos Tacos and Cinnabon Delights.