The Atlantis of submarine brands
What do iPhone, iPad, Apple TV, Google Chrome, Nest, Kindle Fire, and Amazon Echo have in common? Apart from being successful products and services by tech giants, they are all protected by "submarine trademarks". Trademarks are intellectual property rights that companies use to protect their brand names, logos, slogans, designs, and other visual and sensory elements from copycatting and imitation by competitors.
Filing early, even before the new product or service is released, lowers the risk of conflict with competing trademarks, regardless of their motivations. Conflict with a prior filing may prohibit registration and force rebranding, which in turn might affect a firm's competitive stance in the product market. So firms would be well-advised to seek protection early on. However, because companies must describe in some detail the product or service the trademark seeks to protect in the application, this information becomes public knowledge. This has at least two important drawbacks.
First, early disclosure in a trademark application may prompt competitors to adjust or accelerate their own product development plans, expedite imitation, and ultimately undermine a company's market positioning and first mover advantage. Second, companies often announce new products and services at splashy events that occur every year around specific dates to create predictability and significant media buzz. For instance, every year in June, an army of consumers is expectantly waiting for Apple to announce batches of new products at the Worldwide Developers Conference. Most often, consumers do not know in advance which products will be released, their main features, and especially the names the company will use to market them.
The above arguments suggest that firms are faced with the choice between securing legal protection for new products and brands as soon as possible, and inadvertent information disclosure, which arises from trademark publication. Going "submarine" is a trademark protection strategy that firms can implement to evade such a trade-off. The strategy entails initially filing a trademark application in a remote country that lacks an easily searchable trademark database. This initial application establishes the priority date at which trademark protection begins and may be extended to other countries under international treaty agreements. For example, when Apple launched its Apple Watch on September 9, 2014, it first filed the corresponding trademark application in Trinidad and Tobago on March 11, 2014, establishing trademark rights 6 months before the US trademark application was filed on the same date as the product launch announcement. Because Trinidad and Tobago does not have an easily searchable trademark database, Apple's priority application only surfaced when the company filed to register the trademark at the USPTO and extended that registration globally.
In a recently published paper in the Journal of Economics and Management Strategy, in a joint paper together with Carlsten Fink (WIPO), Christian Helmers (Santa Clara University) and Amanda Myers (Booz Allen Hamilton), I have provided the first systematic empirical analysis of the submarine trademark phenomenon. We show that submarine trademarks, while small in number, are growing rapidly and relate to some of the most prominent products and services introduced in the tech industry in recent history. They are effective in blocking rivals thanks to the priority right acquired by filing in a submarine haven. Submarine filing strategies allow companies to establish an exclusive worldwide right to their new product brand names half a year before revealing them to the public and competitors. They are used for their most valuable goods and services and for trademarks that are at higher risk of conflict.