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IKEA: Flat-Pack Fantastic

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IKEA: Flat-Pack Fantastic Feature By Sara-Jayne Clover IKEA: flat-pack fantastic Defending a multibillion-dollar global brand in the between them, they are responsible for handling registrations, online age is no easy task. IKEA trademark manager renewals, oppositions and trademark infringements, and managing a portfolio of some 1,700 trademarks and pending applications Cecilia Emanuelson reveals how consistency and covering 80 countries worldwide. tenacity are the keys to success, Swedish style The €9 billion question In a rare move, last year the Inter IKEA Group published its 2011 annual financial report, which contained details of the transfer of the IKEA intellectual property from Inter Ikea Group’s ultimate Home furnishings phenomenon IKEA has become a global icon for owner, the Interogo Foundation, to subsidiary Inter IKEA Systems its affordable flat-pack products, vast lifestyle emporiums and, of for €9 billion. Speaking to the press at the time, Inter Ikea Group’s course, the irresistible Swedish meatballs that typically end an IKEA head of communications Anders Bylund stated that the deal shopping experience. Whether they are visiting a store in Shanghai, was “an internal transaction, which has no external effects”, and Seville or Santo Domingo, customers the world over can look that the motivation behind the deal and the associated publicity forward to the same pared-down Scandinavian style. Established by was simplicity and transparency. “Our ownership structure of Ingvar Kamprad in 1943 as a mail-order business selling postcards the IP rights has been complicated and we saw an advantage in and pencils, the IKEA network today encompasses more than 330 simplifying all that and consolidating control under the franchisor stores worldwide, a workforce some 150,000 strong and a brand Inter IKEA Systems,” he explained. “Our goal with the annual report that has been valued by Interbrand at a cool $12.8 billion. was to provide greater transparency for our employees and our IKEA’s corporate structure has changed dramatically since business partners.” It seems, however, that this propensity towards the 1940s: while the empire remains in private ownership, today openness has its limits: when questioned on the transaction, it operates through a complex web of holding companies. At the Emanuelson was unable to comment further, other than to centre is Inter IKEA Holding SA, the parent of the Inter IKEA Group, reiterate that it was a voluntary move to enhance transparency. which includes the current owner of IKEA’s intellectual property, “There is nothing confidential in the ownership of the IKEA Inter IKEA Systems BV. It is this subsidiary which, as franchisor, trademarks, but as we are a private company, we do not have the licenses out the IKEA brand and concept. Meanwhile, Belgium- obligation to go out and inform the world of internal matters,” based Inter IKEA Holding Services SA is responsible for all legal she explains. matters concerning the IKEA trademark; it is within this arm of the As Emanuelson rightly says, there is no obligation for IKEA business that trademark manager Cecilia Emanuelson sits. to make public its records or deals, but its traditional reticence Emanuelson is unswerving in her commitment to Inter IKEA, has surely contributed to the intense press scrutiny it has faced having worked for the company for almost two decades. She reveals in recent years. Charges levelled at it range from minimising tax that such longevity is not unusual among employees, and is quick payments to using political prisoners of the former East Germany to explain what has kept her in the post. “There is so much variety to manufacture its products. The company and its founder have working for a company like Inter IKEA Systems BV; on a day-to- been quick to investigate and are working hard to promote IKEA as day basis, I could work with 10 different countries,” she enthuses. a brand with a strong social conscience. One result of these efforts “It’s great because you might start your day with a trademark is the IKEA Foundation, which reported donations of €65 million infringement in Mozambique and finish up with something in 2011 to fund children’s programmes in the developing world; exciting in the US.” and last year the company unveiled plans to become energy and However, the sheer diversity that characterises her role results resource independent by 2020. not only from IKEA’s international nature, but also from her While it is highly unlikely that IKEA’s owners will have position within the company itself. “Working in-house means that welcomed negative press attention, it has perhaps been the you don’t only do technical IP law – you get the whole business catalyst for publication of the company’s private records – a aspect as well, which gives the work extra value,” she says. move which may signal the start of a journey towards full Emanuelson has just one colleague in the trademark department; corporate transparency. www.WorldTrademarkReview.com April/May 2013 World Trademark Review 19 IP visibility IKEA online But whatever the ultimate motivations behind the IP deal and its Protecting a trademark as ubiquitous as IKEA’s is a monumental disclosure, the fact is that the IKEA trademark now has a robust undertaking in the internet age; Emanuelson confirms that book value of €9 billion. In going public with this valuation, IKEA approximately one-third of all incidents of infringement she has confirmed its position as the second most valuable Swedish encounters occur in the virtual world. “Online infringement is a brand, behind high-street titan H&M – garnering plenty of free big issue for Inter IKEA Systems, and is probably even a lot bigger coverage along the way. Getting the IKEA brand name in the than we know of,” she says. “It is an issue of resources to take care mainstream media, together with a tangible demonstration of its of it in an efficient way: the number of infringements we have to worth, was a great way to reach out to customers, particularly as try to contend with is overwhelming.” Perhaps inevitably, Asia is an they become more IP savvy. Emanuelson observes that since she epicentre, but unusually, Emanuelson remains baffled as to the exact began her career almost 20 years ago, recognition of the value root of the problem: “There are certain markets where we see real of intellectual property has skyrocketed – not only among brand spikes of online infringement and I don’t know why: namely South owners themselves, but also among consumers. Korea and Japan.” And just when she starts to think that a pattern is And as IKEA customers become both more brand aware and emerging, her logic is thrown into doubt. “We tend to see the most more brand loyal, they are playing an increasingly important role cases where the brand is highly regarded, but unobtainable,” she in helping to stamp out infringements. “We get a good number of elaborates. “For example, at the moment we have no stores operating infringements reported to us by Swedish people travelling abroad,” in South Korea, so we would hope that by opening up there we states Emanuelson. “People are more aware of IP rights than ever would see a decrease in infringement. However, this may not in fact and seem to feel offended if they see the brand being infringed.” be the case: we have had stores in Japan for seven years and yet still This public protectiveness of the treasured IKEA marque has the amount of online infringements is huge.” made intellectual property a hot topic at board level; but it is the The introduction of generic top-level domains (gTLDS) is individuals responsible for managing that intellectual property who one initiative which many companies hope will afford stronger must fan these flames and kindle an enduring IP culture among protection against online infringements. However, this is not a the C-suite. “I’d say that how aware the board members are of IP is route that Emanuelson and her colleagues have opted to take for largely dependent on how visible the department is made in the the time being. The decision against applying for the ‘.IKEA’ domain eyes of the business,” she coninues. “Our board is deeply aware of name was made after careful consideration by relevant factions of matters relating to the IKEA trademark – certainly also because the the Inter IKEA team. “We asked the marketing people if they saw IKEA trademark is a famous mark.” any added value in having the gTLD. Together, the legal department Between Emanuelson and the board sits IKEA’s general counsel and marketing decided that at present, the price of applying for the (GC) Gabrielle Olsson Skalin, with whom she has worked since gTLD compared to the returns they expected it to yield was not a joining the organisation. While this structure of reporting to good balance, and the price was too high to make a mere defensive the head of legal can cause frustration for some IP practitioners registration. We could see no real customer benefit either.” But if their messages are not passed effectively up the chain of Emanuelson is still following developments closely and is interested command, this is not the case for Emanuelson. Trademarks are to see how the situation plays out over the coming years. “Obviously, high on Olsson Skalin’s agenda and approximately half of her if the gTLD becomes a big hit and is really successful, then I don’t time is spent attending to them. While Olsson Skalin is the board’s doubt for a second that we will reconsider our decision. But we are main point of contact for trademark matters, where she believes not prepared to spend half a million dollars just to find out whether that Emanuelson’s team is well placed to report on an issue, it is going to be successful or not.” she is happy to stand aside and let them liaise directly with the Perhaps somewhat surprisingly, rather than counterfeit senior executives.
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