The Diageo Marketing Effectiveness Tool: TM Lawyers take Notice

In our data driven world, it is not surprising to read that some brands are creating a culture of marketing effectiveness. The days of making an educated guess about what marketing efforts could be successful are slowly being replaced by data driven models that quickly show which marketing efforts are successful and those efforts that are failing.

One tool created by Diageo – the owner of such well-known brands as Guinness beer, Johnnie Walker whiskey, Smirnoff vodka, and Captain Morgan rum among others – developed a tool called Catalyst. Catalyst not only uses data to determine the right budget for each Diageo brand, but also allows the user to assess the likely impact of a planned activity.

The articles about Catalyst do not discuss what variables it considers as part of its planning capability, but if it does not include a legal variable then it should or a law firm should consider building a similar tool. Too often in trademark law the advice given is couched in “should” instead of “will.” The use of “should” is used more often to hedge against an opposite outcome, but it is also used because the attorney cannot honestly say what impact the decision to spend money on a particular trademark application or enforcement action will have on the profit of that business, product, or service.

Take the strength element of the likelihood of confusion analysis. Some TM lawyers will advise clients to sue anyone that adopts a similar name. The theory is that the more similar marks the trademark owner co-exists with, the more difficult it is for consumers to identify a single source, which results in a lower brand value. But does the co-existence result in any lost profit?

The question that should be discussed is whether a particular enforcement action is going to result in actual lost sales or a material loss in brand value. And if Diageo can create a forward-looking planning tool for marketing activities, a similar tool could be created for legal actions as well.

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