Trademark and co-branding as a badge of … did you say "location"(?)

This Kat has begun some research on co-branding, usually understood as the use of two marks on single product, each of which mark belongs to a different owner and

identifies a separate and distinct aspect of the good or service. Growing up in the trademark world, this Kat was familiar with the presence of both a trademark and a service mark to identify both the source of the goods as well as its local distributor. While the presence of two different marks in such a situation seems at first glance a bit puzzling (two different “sources” of the same product?), he understands it in terms of the difficulty in showing evidence of use of a service mark. Against this backdrop, this Kat recently encountered a real-life example of co-branding within his own neighborhood. It shows the surprising role that a co-brand can serve in identifying a mark as a badge of valuable commercial location.

At issue is a senior citizen retirement facility. One can discern two different scenarios with respect to the use of a mark and brand in connection with carrying on such a business. The first is use on a single, stand-alone facility, with a mark and brand unique to that facility. In this situation, the strength of the brand is tied to the success (or failure) of that facility at its specific location. (See a previous post by this Kat, which speculated about the branding issues of a single-site business in the context of the use of a highly descriptive mark.) The second is a chain, in which the properties are either all owned and operated by a single entity, is run as a franchise operation, or is organized in some combination of the two. Here, the mark and brand must deal with the challenge of maintaining quality control across multiple facilities. Succeed, and the business can enjoy the fruits of scale plus the prospect of continuing expansion.

All of this is straight-forward enough in principle. But here, the retirement facility in question has been operated at the same location for decades under a mark that has become well-recognized as identifying the facility located at that site. Indeed, a broad swathe of the broader population connects the name with that specific facility. This facility was recently acquired by a real estate developer that, inter alia, owns a chain of retirement facilities throughout the country. The question then becomes—how does the acquirer brand the facility?

If we seek to analogize to the hotel business, hotels are sold from one owner/chain to another. Usually, the new owner quickly replaces the mark and brand with its own mark and brand; why remind patrons about your competitor? That may be well and good when the acquirer and acquired are both hotel chains. But what about the situation where, as here, a real estate developer acquires a single site facility? The solution adopted by the real estate developer was to keep the signage with the previous name of the facility prominently displayed at the top of the building. Not only that, but both in print, as well in radio ads broadcast over the entire country, the real estate developer continues to mention the previous name of the facility along with the new name.

At first glance, this seems a bit odd; why refer to two different names for the same business? The answer seems to be—used in tandem, these two marks enable the new owner to build its goodwill and reputation in the new mark by emphasizing, at least for a period of time, the goodwill and reputation enjoyed by the business at its long-term location under its previous name. The triad of commercial identity is: mark-business-location.

Recall that before there were trademark laws, villagers had need only to identify the source of the business by its physical location. Trademarks and trademark laws came into commercial importance only after business expanded beyond the confines of the village. In modern times, when reliance on one’s location as a badge of commercial identity is no longer practical, traders seek various ways to still exploit this valuable commercial information. The co-branding employed by this senior citizen facility is an excellent example.

As a closing curiosity, another store near-by to this Kat (this Kat’s neighborhood is a virtual cornucopia of instructive trademark curiosities), this time a boutique for home furnishings, changed its name but continued to prominently display for nearly 10 years the following notice-- “Previously known as ‘Home Store’”. Here, as well, there is branding value in continuing to inform those who pass by that “what was, will continue to be”, at this location.