The Smiley Company offers a case study on how to raise IP awareness with a simple brand

12th Apr 2024

Kelly Saliger draws on the history of the Smiley Company to demonstrate how brand protection and licensing are integral to brand monetisation using a simple case study to raise awareness of intellectual property.

The Chartered Institute of Trade Mark Attorneys (CITMA) recently launched a fashion hub to help inform public understanding around the role of intellectual property.

The hub is intended to inspire fashion designers and business owners on the importance and value of registered intellectual property and the role that legal professionals play in protecting their ideas.

It is a destination for those with an interest in the sector to learn from and grow their understanding of intellectual property through the lens of famous brands and their stories.

The hub received significant contributions from attorneys who represent the world’s largest brands. One case study, on the Smiley Company, provides an informative account of the world of IP licensing and the value it provides brands that wish to collaborate through partnerships. It also provides lessons for consumers.

A history of Smiley

The Smiley Company is a good example of the work required by brand licensors to protect their heritage. Throughout its rise in the fashion industry and beyond, the Smiley Company has relied on its IP protection, which has allowed it to develop into a licensing juggernaut.

Four decades of history, and the continuing resonance of Smiley today, suggest that with careful stewardship and new creative and licensing partnerships, a brand’s underlying message will inspire generations to come.

For the Smiley Company, licensing has cemented its brand as a pioneer of cultural movements, from the early days of the United Kingdom’s fledgling rave scene in the 1980s to the digital revolution of emoticons in the 1990s.  

Smiley started in 1972 when French journalist Franklin Loufrani decided to design a logo as part of a “feel-good” news campaign, in response to negative headlines, on the front page of France Soir. Loufrani used the unnamed logo as a signal of positivity, which birthed Smiley’s core values of optimism, openness and joy.

Loufrani became the first person to register the Smiley logo as a trademark, doing so in and outside France at the time. This enabled him to license the Smiley logo to marketing and merchandising partners, and to grow its prominence.

In 1989, the trademark was used for the first time on a stuffed toy named Smiley. However, when Smiley first began to register its logo, it had to spend vast amounts of money to register it for multiple classes of goods. This included acquiring rights from a long list of companies that had used the name in totally different contexts.

For example, the K2 Corporation – a sports company founded in the early 1970s by a US ski champion with the last name ‘Smiley’ – had owned a similar US mark in Class 25.

Now, the Smiley name and logo are registered in more than 100 countries for a myriad of goods and services. In 2020, the company had 446 licensees across 68 million sold products, amounting to total retail sales of $573 million.

Much of its success comes down to the fact that Smiley’s brand strategy has not stopped evolving. The company is soon to launch a new wave of designs as part of its first cartoon, Mini Smiley. Comprised of designs that incorporate characters with arms and legs, this will constitute a new strategy targeting the baby and preschool markets.

Smiley’s attitude to licensing

Smiley continues to influence modern culture as one of the world’s top global collaboration licensing brands. World-renowned names and creative leaders market their goods in innovative collaborations with Smiley, including adidas, H&M, LVMH and Richard Mille.

Smiley views licensing as a ‘collaborative partnership’ between the IP owner and manufacturers or retailers. Smiley’s focus is on the softer aspects of the relationship – namely, brand identity, marketing and protection. Its partners, meanwhile, handle the practical aspects – development, manufacturing, logistics, sales and financing.

In the era of social media and constant storytelling, working with intellectual property allows for co-creation projects that engage new audiences, and has proved effective for the Smiley brand.

Overcoming the challenges of a simple logo

Many brand licensors with simple trademark motifs face challenges over the authenticity of their claims to their designs.

Smiley has faced such challenges with its logo. As an example, it is claimed that Harvey Ball, an advertising executive from Worcester, Massachusetts, created the yellow smile logo in 1963, after being hired by an insurer to create a badge to boost staff morale.

Ball did not apply for a trademark or trade dress, nor register a copyright – although he did make a valuable societal contribution through the creation of the World Smile Day in 1999. Ball, and his employer, gained all their goodwill on the badge through its small-scale use as a company badge, in a different industry, country and era to Loufrani.

Ultimately, it was Loufrani’s trademark registration, alongside the establishment of Smiley’s business model and creative marketing campaigns, which built the Smiley brand and lifestyle, resulting in the widespread commercial success and extensive use of the Smiley logo worldwide. 

Years after Ball, Walmart adopted a similar logo in the United States for department store services in Class 35, symbolising price reductions. The retailer believed that Smiley’s trademarks impeded the brand equity that it had built with its logo, backed by significant marketing investment.

Walmart eventually successfully demonstrated that US consumers associated the logo with their stores.

Despite litigation, Smiley continued to sell products in the United States without interruption. Ultimately, it settled with Walmart, and Smiley remains a thriving brand in the United States.

While many trademark logos are simple – think Apple, Lacoste and Fred Perry – what makes a logo unique is the story of the brand that underpins it. Brands must be developed into something distinctive, which separates them from a mere image or concept.

Sometimes the same logo and name can be used consecutively but for different purposes (eg, Penguin publishing and Penguin clothing).

Significant amounts of time and money are invested in the development of brands, and registered and unregistered IP rights ensure that the efforts of protection result in their owners being able to monetise them.

Raising awareness of the real-world value of protection

Case studies such as these are important for communicating the wider implications of failing to protect intellectual property, and what that means in reality – to both businesses and consumers.

Companies that rely on the integrity of a particular trademark must, of course, keep a keen eye on actors that move to sabotage this, and take appropriate action. This means proactively watching the trademark registers, as well as online platforms and marketplaces (using tech and AI) to ensure that there are no unlicensed products, counterfeits or fake goods on the market, which use the brand.

Examples such as that of the Smiley Company bring this to life. They also support better public understanding of different IP rights and the values to which they relate.

Consumers do now have better knowledge of what trademark infringement means following high-profile cases in the fast-moving consumer goods industry. However, in the fashion space, where influence is taken each season from the runway, it is always a fine line between influence and copying.

It is therefore important that we foster a culture within the public sphere that respects intellectual property as a cornerstone of a thriving, creative and innovative society.

The use of case studies can help bring that to light.

This article was re-published with the kind permission of World Trademark Review. Please click here to read the original version.

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