In crafting a market positioning that dominates industries, branding have their work cut out. Building brand equity takes time. But over time, companies have found eponymous branding, also called “Namesake” branding—the practice of naming your brand after a person (usually a founder or a prominent individual associated with your brand)—to shorten this curve.
Names are more than personal identifiers—they carry the weight of accomplishments and reputation. For founder-designers, using a personal name as a brand creates a direct link between their work and their identity. Eponymous branding allows businesses to leverage the founder’s personal goodwill and credibility, strengthening customer trust and loyalty.
For founders who cash in on the value their name offers, the names quickly become social currency which they can leverage to lock in loyalty within a customer base or access new markets. These names also hint that the product carries the founder’s personality, further negotiating customer loyalty from the founder’s personal brand. There’s no shortage of famous brands named after their founders. Well-known examples include the Dangote Group by Nigerian industrialist Aliko Dangote, Kylie Cosmetics by Kylie Jenner, Balenciaga by couturier Cristóbal Balenciaga, Vera Wang, and Alexander McQueen.
As these founders exit their ventures, these eponymous labels, now valuable IP (trademark) assets of the corporate entity cease to be theirs and are now vested in the purchasing entity. When this happens, they become stripped of the rights to trade under their name, including its abbreviations or derivatives.
This article explores the legal challenges unique to eponymous brands and highlights critical considerations for founders aiming to create and sustain such brands. It also offers practical insights on managing these challenges effectively.
Registration Of Eponymous Brand Names As A Trademark
The rules regarding the registration of eponymous brand names differ across jurisdictions. In the U.S., the Lanham Act in Section 2(e)(4)1 provides for refusals in applications to register a mark that “is primarily merely a surname” from the principal register, unless such name or surname has acquired distinctiveness in the applicant’s goods in commerce as provided for in Section 2(f).
According to the Trademark Trial and Appeal Board in its decision in re Eximius Coffee, LLC, 120 USPQ2d 1276 (TTAB 2016)2, a “term is primarily merely a surname if, when viewed in relation to the goods or services for which registration is sought, its primary significance to the purchasing public is that of a surname.”
It was on this basis that the TTAB found that the French designer Daniel Hechter could not register his surname HETCHTER as a trademark for leather goods and clothing brands. It found that “there is no persuasive evidence in the record that HECHTER would be perceived as anything other than as a surname in the United States.” As opined in the HECHTER case, the fact that the name is rare will not avail the applicant, in so far as the name has no other described meaning other than as a surname.
In Nigeria, names are barred from registration under Part A of the register since they are non-distinctive. They can still be registered under Part B. But they must distinguish the goods connected to the proprietor of the name from unconnected goods as provided for in Section 10 of the Trademark Act 19673.
It would therefore be more opportune for a founder to carefully consider the issue of clearance of a name for trademark purposes. In particular, a founder must first ensure that their name has no prior registration for the goods or services for which they intend to trade using the name. Absenting this due diligence, such a founder courts litigation risks or being locked out of trade in their industry under that name.
That Chanel Jones, a hair salon owner in Indiana, had been using her name long before the French Fashion house, Chanel, filed a claim to protect its trademark, was not enough to preserve her rights to use her first name for commercial purposes4.
Trademark Tussles Between Founders and Buyers
Registering an eponymous brand grants exclusive rights to owners to use their name in trading in connection with the commercial purpose (goods/services) for which it was registered. It also prevents third parties from infringing on such rights by using the name or a confusingly similar one. These trademarks exist independently of the founder. Where the founder controls them whilst still in the company, it’s unlikely to cause any issues.
The problem arises when a proprietor transfers such rights to a third party or leaves the corporation having rights over the name. As is often the case, this transaction raises significant challenges for the initial owner. The corporate entity assumes full ownership of the trademark, and the original owner may become restricted from using their name in future business ventures. The corporate entity then enjoys all the exclusive rights associated with the eponymous name.
This scenario plays out quite often, with the globally renowned brand GUCCI providing an iconic example. Following Paolo Gucci’s exit from corporate entity, GUCCI, he sought to register his name in connection with his new business venture. However, his application was denied as it was found to infringe on the just-exited GUCCI brand and was likely to cause confusion in the minds of customers.
Similar clashes have trailed the creative space, with disputes involving Karen Millen, Bobbi Brown Cosmetics, and Joseph Abboud being some of the high-profile examples.
When Bobbi Brown sold her eponymous beauty brand to Estée Lauder in 1995 and left the company in 2016, she became ‘divorced’ of her right to use the name to trade, leading her to launch Jones Road in 2020. While founders like Bobbi Brown have navigated these markets with aplomb, new ventures from other founders hardly live to tell the tale. Brands like Joseph Abboud5 and Catherine Malendrino6 come to mind here.
On a brighter note, the recent JLM Couture vs. Hayley Paige Gutman7 case provides an interesting counter-narrative where a founder was able to wrest back control of the right to use their trade name.
JLM Couture initiated legal action against designer Hayley Paige Gutman over breach of contract and trademark dilution related to her use of her name after leaving the company. Following a temporary restraining order obtained against Gutman, precluding her from using her name for advertising purposes, JLM Couture filed for Chapter 11 Bankruptcy.
The messy fallout from JLM’s prolonged litigation against Gutman had plunged the company into a reputational and financial crisis. Leveraging her position as a creditor, she filed to convert the company’s Chapter 11 bankruptcy proceedings to a Chapter 7 liquidation, where a Chapter 7 trustee would liquidate JLM’s assets to pay its creditors.
Gutman stated these in her motion, supported by sworn statements from certain companies electing to terminate their business relationship with JLM in solidarity, hinting at a growing “industry animus”. Shortly after, the parties would reach a settlement. JLM Couture would drop its demand for $8.95 million along with its exclusive rights to her name, with Gutman only parting with $263,000.
Remedy May Lie in Moral and Publicity Rights . . .
The tale of a creator who has lost the rights to their eponymous brand name might be all too familiar, but it’s not a hopeless one. A founder may be locked out of using their name to trade in a new business venture. Yet, they may find a fallback in the form of moral rights that stem from a creator’s right to publicity in their name and likeness as independent of their work.
Certain jurisdictions, like France and other European Countries, provide for a fashion designer’s moral rights at the time of a product’s creation under their copyright law. Unlike trademarks which are a general indicator of the source of goods,
For authors, moral rights encompass four key protections, namely:
The right of attribution, allowing creators to be recognized as the work’s originator;
The right of integrity, which prevents unauthorized modifications or destruction of the work;
The right of disclosure, giving authors control over when and how their work is publicized; and
The right of withdrawal, enabling creators to retract a work from public circulation after its initial release.
Moral rights, in particular, the unassignable right of attribution, help to ensure that a founder still reserves the right to take credit for their past, present, or future creations. These rights are in effect even in the absence of a right to use the name commercially, as moral rights are generally inalienable.
In JA Apparel Corp. v. Abboud8, Mr. Joseph Abboud lost the rights to his trademark to JA Apparel. Later, he launched his menswear line and planned to promote it as “Jaz, a new composition by designer Joseph Abboud.”
JA Apparel argued that while Abboud was free to compete in the menswear market, he had sold all rights to use his name in connection with goods and services. The court held that “Abboud did not sell, and JA Apparel did not purchase, the exclusive right to use the “Joseph Abboud” name commercially. Rather, Abboud sold, and JA Apparel purchased, the “Joseph Abboud” name as a trademark and related intellectual property (which can include brand names or commercial names).”
Where he intends to take credit for his work under the Jaz clothing line through advertisements, he must include a disclaimer of any affiliation with JA Apparel and the products sold under the Joseph Abboud trademarks.
Similarly, in Paul Frank Industries, Inc. v. Paul Sunich9, the court held that Paul Frank Sunich could use his full name, “Paul Frank Sunich,” to identify himself as the designer of the new brand and designs he created while at Paul Frank Industries, as long as he makes it clear that he is no longer affiliated with PFI.
In finding that a certain designer Paulo Gucci be restricted from using his name as a trademark in his new business, it was the court’s view in Gucci v. Gucci Shops, Inc., 688 F.Supp. 916 (1988)10 that GUCCI “…is entitled to use his name to identify himself as the designer of products sold under a separate trademark which does not include the name “GUCCI.”
Wrap Up
Dale Carnegie once remarked that “A person’s name is to him or her the sweetest and most important sound in any language,” a sentiment that underscores the appeal of eponymous branding. While this is true, the sweet sound of a founder’s name could quickly turn sour when a founder fails to take stock of the legal and commercial challenges as outlined.
Founders must consider the loss of rights to use their trade name in the event of an exit. They should carefully confirm that the expected financial or reputational gain would be a worthy trade-off for letting of such rights.
Should the results of such findings be in the positive, the founder is better off adopting strategic options to connect their new brands with their previous creations. If negative, such a founder may draw up a pre-exit IP strategy to protect the said rights, which may include IP licensing or Corporate structuring.
Pre-exit, the founder may elect to retain the rights to trademark name in the deal and license the same to the purchasing company. A dual-company structure can also offer an added layer of protection for intellectual property. Under this model, the founder retains full ownership of a holding corporation (HoldCo) that owns the trademark rights. HoldCo then licenses these rights to an operating corporation (OpCo) for business use. In the event of an acquisition, the trading name and related rights remain with HoldCo and are not included among the “acquired assets” transferred to the buyer.
Endnotes
1. https://www.bitlaw.com/source/15usc/1052.html
2. https://ttabvue.uspto.gov/ttabvue/ttabvue-86262060-EXA-13.pdf
3. https://nigeriatradeportal.fmiti.gov.ng/media/Trade%20Mark%20Act.pdf
4. https://www.scribd.com/document/255673553/Consent-Judgement
5. https://casetext.com/case/ja-apparel-corp-v-abboud
6. https://casetext.com/case/cm-collections-inc-v-asl-holdings-llc
7. JLM Couture, Inc. v. Gutman, No. 21-2535 (2d Cir. 2024) accessible at https://law.justia.com/cases/federal/appellate-courts/ca2/21-2535/21-2535-2024-01-17.html on 10/12/2024
8. JA Apparel Corp. v. Abboud, 682 F. Supp. 2d 294 (2010)
9. Paul Frank Industries, Inc. v. Paul Sunich, 502 F.Supp.2d 1094 (2007)
10. Gucci v. Gucci Shops, Inc., 688 F.Supp. 916 (1988)
