Feature By Véronique Musson Nestlé’s winning formula for brand management ‘Enormous’ hardly begins to describe the trademark that develop products worldwide and are managed from our portfolio of the world’s largest food and drink company headquarters in Vevey, Switzerland or St Louis in the United States,” he explains. So eight trademark advisers, also based in Vevey, advise one – and the workload involved in managing it. But when or more strategic business units on the protection of strategic it comes to finding the best solutions to protect these trademarks, designs and copyrights, while one adviser based in St very valuable assets, Nestlé has found that what works Louis advises the petcare strategic business unit on trademarks and best for it is looking for the answers in-house related issues, as the global petcare business has been managed from St Louis since the acquisition of Ralston Purina in 2001. In parallel, 16 regional IP advisers spread around the world advise the Nestlé Imagine that you start your day with a glass of VITTEL water operating companies (there were 487 production sites worldwide at followed by a cup of CARNATION Instant Breakfast drink. Mid- the end of 2005) on all aspects of intellectual property, including morning you have a cup of NESCAFÉ instant coffee and snack on a trademarks, with a particular focus on local marks. The trademark cheeky KIT KAT chocolate bar; lunch is a HERTA sausage with group also includes a dedicated lawyer in Vevey who manages the BUITONI pasta-and-sauce affair, finished off by a SKI yogurt. Later domain name portfolio and handles all issues of misuse of the group’s you suck on a POLO mint, while dinner is a light MAGGI soup. You brands online. These 26 advisers are supported in their task by a group have had a Nestlé food day, but still have sampled only a fraction of of trademark specialists and paralegals who handle the more the company’s products. This shows how much the Swiss company administrative aspects of mark protection, including searching and has grown and diversified since pharmacist Henri Nestlé invented opposition procedures. All of them report to Maeder, who himself formula milk in 1867 and founded his company with a single reports to Paula Nelson, General Counsel Intellectual Property. product. One hundred and forty years on, Nestlé has become the world’s largest food and beverage producer and branched out into Team effort petcare, with a little pharmaceutical thrown in. While the IP department is independent from the business units Managing this worldwide and varied brand portfolio is no mean (Nelson reports directly to Nestlé’s chief financial officer), the feat. But while many companies opt to outsource a fair amount of the trademark team’s daily work involves a close relationship with its activities relating to IP management and protection, at Nestlé the clients in the group, in particular with the marketing department and policy is to do most of the work internally. This choice may have been the managers of the strategic business units. (The word ‘clients’ may made primarily to stay close to the business, to cut down costs and to avoid low/non-added value intermediaries, but it also makes sense as part of the group’s approach to IP protection. The policy has evolved over the past few years: IP protection used to be split between the trademark and patent departments, which worked in parallel without much interaction, but now the approach is more holistic – the trademark team and the patent team work together within a single IP department and find the best protection for each brand. Practically, this means that while the trademark and patent teams still retain their separate areas of expertise, the trademark and patents advisers communicate on a daily basis to decide which IP rights are best suited to protect each particular aspect of a brand, product or packaging. Two-level structure The structure of Nestlé’s trademark division may seem complex at first glance, but Jean-Pierre Maeder, Group Head of Trademarks, Jean-Pierre Maeder explains that the organization of the department mirrors that of Group Head of Trademarks Nestlé’s business units. “The company has 11 strategic business units Nestlé 58 World Trademark Review September/October 2006 www.WorldTrademarkReview.com Nestlé’s six global corporate brands be used as a way to motivate personnel to treat internal departments as well as they do outside clients in most places, but is an accurate description of the relationship between the departments at Nestlé. The IP department is based within Nestec, the service providing company to the Nestlé group worldwide. These services are provided to the business units on a contractual basis.) This means that while strategic brands are defined by the executive management board, trademark advisers are involved from the very beginning by taking part in regular meetings relating to the brand’s development. They then manage the brand in collaboration with the relevant strategic business unit, keeping in close contact with the unit with regards to any legal actions to be taken. This also applies at local level, where local brands are created by the operating companies in collaboration with the regional IP advisers, who then manage and enforce the trademark rights associated with the brands. As mentioned above, most of the trademark work is done in- house. “We tend to do most trademark work internally,” explains Maeder. “Effectively, our regional IP advisers work as internal agents and lawyers.” This is possible because most of Nestlé’s regional IP advisers are qualified to act before the local trademark offices as well as in the local courts. The regional IP advisers are based in the markets in which Nestlé has a lot at stake in terms of brand development and strategy, but these regional IP advisers are also in charge of several countries. For instance, the regional IP adviser based in the United Kingdom is also responsible for Ireland, the Nordic region and Iceland. The regional IP adviser in Mexico is also responsible for Central America and the Caribbean region. “We have a network of outside counsel and filing agents in the countries where we don’t have a presence, or where our advisers are not qualified to act in front of the local trademark office or courts,” confirms Maeder, who is himself admitted to the Bar in Switzerland. Cost control Handling most things in-house has many advantages, such as being close to the business and minimizing response time when a particular problem arises – in part thanks to the good communication and strong relationships that exist within the trademark team and with its clients. Also, using the regional IP advisers as internal agents and lawyers is more cost efficient than using external service providers. Another factor to the department’s budget control may be the group’s filing strategy. Maeder favours the international route of filing under the Madrid system and designating the Community trademark (CTM), which makes a lot of sense for the worldwide brands for which a coherent strategy must be in place. The combined international/CTM solution means that filing fees are minimized while the scope of registration is maximized. National filings are used only for local/regional marks and where the Madrid system is not applicable. A leaner but still chunky portfolio The portfolio consists of a medley of types of mark – words, devices, colours, shapes and slogans – because the kinds of registration Maeder’s team seeks vary significantly from one brand to another; also in addition, protecting all aspects of brands for fast-moving consumer goods requires exploring all possible avenues of traditional and non-conventional trademark registration as well as design registrations as part of the fight against copycat products – that is, imitators of the look and feel of Nestlé’s products. The group also has a worldwide policy for the registration of domain names for global strategic brands that forms part of the overall strategy for the brand: “For instance, the six worldwide corporate strategic brands [NESTLÉ, NESCAFÉ, NESTEA, MAGGI, PURINA and BUITONI] are registered on a global basis as trademarks and as domain names under many of the www.WorldTrademarkReview.com September/October 2006 World Trademark Review 59 Feature: Nestlé’s winning formula for brand management Nestlé’s IP department Four regional Machinery & Cereals IP researchers IP advisers packaging IP advisers Americas IP adviser Trademarks/ Patents Patents Waters IP support IP support Coffee & IP advisers beverages Trademarks/ IP advisers Patents Trademarks/ Patents IP support IP support Petcare Chocolate & (St Louis) confectionery IP advisers IP advisers Trademarks/ Trademarks/ Patents Patents General counsel Six regional IP support intellectual IP support IP counsel IP advisers property Europe Group head of trademarks Nutrition Group head of Dairy IP advisers patents IP advisers Trademarks/ Trademarks/ Patents Patents IP support IP support Nespresso Food IP advisers IP advisers Trademarks/ Trademarks/ Patents Patents Six regional IP support Ice cream Food services IP support IP adviser IP advisers IP advisers IP advisers Domain names/ Asia Oceania/ Trademarks/ Trademarks/ Internet Africa Patents Patents IP support IP support generic top-level domains and country-code top-level domains,” notes branding consultancy, ranked the NESCAFÉ brand alone at number Maeder. However, other domain name registration rules apply to local 24 in its 2005 league table of global brands, with an estimated value brands: these are usually registered as domain names only under the of $12.42 billion; the ranking for 2006, with a value of $12.50 billion, relevant country-code top-level domain. is 23. The exact value of the entire portfolio may be difficult to pin In the six years since Maeder joined Nestlé, the portfolio has been down, but the value of Nestlé’s intangible assets gives a good streamlined to bring costs down and ease management.