Marking your trade: Cultural factors in the prolongation of trademarks

a r t i c l e i n f o Trademarks protecting the brand name and associations are crucial in a brand's strategy, but little is known about the factors that determine a trademark's prolongation. To explain the prolongation of trademarks, the research estimated a multilevel hazard model accounting for trademark characteristics, firm's characteristics, and firm's country of origin national culture. The dataset comprises a census of 2911 trademarks in the US software security industry across an eight-year period, belonging to firms originating from 11 countries. The results indicate that a firm's culture of origin has a systematic effect on the types of trademark the firm is more likely to prolong and on the length of the prolongation. The age of the trademark, the number of categories where a particular trademark is present, and the age of the firm increase the likelihood of a trademark's prolongation. Larger and more innovative firms tend to terminate their trademarks earlier. Firms invest a lot of resources in the visual design of their brands, such as logos, slogans, and the appearance of the brand name. The Wall Street Journal reports that the investment a firm must make to develop a brand's visual design typically ranges from $100,000 to $1 million, plus millions more on promotion (Beatty, 1998). The investment in the visual design of brands helps to communicate the brand's identity, convey meaning, create positive emotions, and enhance brand recognition and recall (Henderson, Cote, Leong, & Schmitt, 2003). Importantly, visual design helps to differentiate a brand from competitors (Warlop & Alba, 2004). Copycat practices mimicking brands' visual designs represent serious challenges for many firms. For example, Sayman, Hoch, and Raju (2002) observe explicit imitation of the visual elements of national brands in more than 30% of 75 supermarket categories. To protect their visual designs from copycatting practices, firms register and enforce a range of trademarks. Trademark laws limit the ability of a brand to imitate a visual design of a competitor, ensuring that the uniqueness of a firm's visual assets is protected by law. A salient example is the Apple lawsuit's claims that the look and feel of Samsung's products infringe upon Apple's trademarks. Trademarks are important for global firms, because global firms face both local and global competitors' temptations to benefit from quality associations through copycatting (Planet Retail, 2007; Steenkamp, Batra, & Alden, 2003). A recent example is the launch of the …