In mid-September, Spanish newspapers were filled with news about a legal battle that has been waged for 25 years between the La Española brand of olive oil – which belongs to Aceites del Sur – and Carbonell olive oil, owned by the SOS Cuétara group. The struggle concerns the Andalusian woman who appears on the labels of both brands of oil. A European Union court recently judged in favor of Carbonell, noting that the La Española brand is “similar” to that of Carbonell, which “means there is a risk of confusion among consumers.”
SOS Group estimates that 90% of all consumers confuse the two bottles at first sight, and they mistake the brands when it is time to buy. In its view, this generates “sales that are unmerited” for Acesur [Aceites del Sur]. Jesús Salazar is president of SOS, owner of Carbonell, the leading Spanish brand of olive oil, which had sales of about 170 million euros ($240.6 million) last year. Salazar charged that his competitor “vulgarly copied” his brand after knowing about the decision. Salazar provided a meticulous presentation of how the image of the two brands has evolved since the 1980s. Furthermore, he accused his competitor of having “shot” the Carbonell bottle, and of having signed up a former marketing manager at Koipe, another SOS brand, with the same objective in mind.
A 25-Year Lawsuit
This is not the first case involving imitation of a label, logo or corporate image, and experts say that it will not be the last. Xavier Oliver, professor of marketing at the IESE business school in Spain, recalls the case of Larios, a Spanish gin company and its imitators Farios y Parios. “The bottle was exactly the same and the name of its imitators was also practically the same,” says Oliver. What makes this case different is that “La Española has not behaved seriously, insisting for such a long time on continuing to imitate the brand.” Normally, “the first time that a competitor protests, that is enough, given the normal legal systems.” He explains that there are faster and more efficient ways to argue your cause than ordinary courts, including self-restraint and advertising courts. Oliver was part of the jury in a similar case in which the Pescanova brand of frozen fish took out an advertisement showing Captain Pescanova, only to watch as Frudesa, its competitor, took out another ad with its Captain Frudesa. Two weeks later, Frudesa “withdrew Captain Frudesa from television.”
This particular case goes back to 1982, after La Española brand was acquired by Acesur. Since then, the company has changed the design of its label, gradually making it closer to the Carbonell label, say Carbonell executives. For its part, Carbonell label, better known as the Gypsy, originated in 1866 and has stayed practically the same ever since. In 1982, the owners of Carbonell filed their first lawsuit against Aceites del Sur. The second suit came 10 years later. Both were won by Aceites del Sur. In 1996, La Española registered its brand in the office of domestic market harmonization, and Carbonell responded by denouncing that move. Now, for the first time, that European court has ruled in favor of Carbonell.
SOS’s Salazar said that “La Española will never again be able to register its brand with the current image.” And added that “when the ruling is firm, within two years, we are going to petition for the cancellation of all registrations of the La Española brand.” In addition, his company will demand that its competitor modify its label in such a way that it does not suggest the Carbonell labels — which show a Gypsy seated at a wall and an olive tree, with a red background and the name of the brand below. Beyond that, SOS Group will demand economic compensation of 198 million euros from Aceites del Sur for having copied its brand, which was established 140 years ago.
The Guillén family, which owns Aceites del Sur, has already announced that it will file an appeal. No doubt the Gypsy woman will take a stroll in front of the judges, especially now that the war of words between the two parties has warmed up following the European judgment. Gonzalo Guillén, managing director of Seville-based Aceites del Sur, spoke to the media about his company’s supposed plagiarism. He said that the European court made its decision solely on the basis of the registrations of many other companies. “It has no impact at all on anyone who sells in Spain,” he noted. In addition, he assured that 95% of the bottles that his company exports are made of glass, while the above-mentioned image is used only on plastic bottles. “In the specific case of Europe, where it has been prohibited, it has only a residual use,” he said.
Appropriating a Traditional Concept
With regard to the image of the Gypsy, Guillén assured that “the woman is different and, moreover, she carries a large vase; the brand is different and the background is similar only because there are olive trees. In addition, we should not underestimate the intelligence of consumers.” Nevertheless, Gerard Costa, professor of marketing at ESADE, feels that the explanations offered by the company about its brand “are almost ridiculous. What’s certain is that there is a company that keeps modifying its visual elements, bringing them closer and closer to a certain style.”
In Gildo Seisdedos’ opinion, the style is not original in both cases. Both companies, says the professor at the IE business school in Spain, “are battling for an identity and a related brand image that really corresponds to the traditional Andalusian image painted by Julio Romero de Torres. It is not the creation of the two brands themselves. One of the companies took that image first, and appropriated it before the other company did; that’s what is most striking. Both companies have their roots in the concept of a traditional rural society, using the sort of creativity that was not born in either of the two brands.”
From that point on, “It happened that one of those companies achieved fame and the other company later tried to come closer to it. I don’t know to what extent either of the two companies can consider that this image [of the Gypsy woman] is their patrimony,” he notes.
Putting Their House in Order
Seisdedos is carrying out research about the relationship between a national brand and a corporate brand, and about how corporate brands use nationality when they sell themselves. Until now, he notes, “The main brands that used the concept of ‘Spain’ or its territory to market themselves were brands in focused niches, above all in agriculture and food, as in the case of [olive] oil. They were brands that had relatively little scale. The companies lacked resources to carry out a global marketing plan, and they couldn’t defend themselves appropriately in international markets.”
According to Seisdedos, Spanish brands are now appearing that are beginning to have a major impact on the country’s economy and are utilizing the concept of the country’s image to do their selling. “They position themselves with excellence in specific products; they already have local or regional reach but not global reach. This means they can use brand management strategies like multinationals do, which involve putting their [domestic] houses in order before going abroad,” he notes. Adds Seisdedos: “First, I have to win the battle for taking ownership of something linked to a very cultural subject because of the characteristics of the product and even because of the design of the brand itself.”
Along the same lines, Costa notes that “The leading company in a country must warn newcomers [in that market] about how to use certain elements, whatever their source of manufacturing supply.” He also believes that the interpretation of a legal judgment is something entirely legal, not something subject to the marketplace. “If one label has a person sitting down, with the brand below and the name of the product above, and so on…There are many much more obvious cases in the Spanish market, above all with distributors’ brands, which would be much more blatant.”
Regarding the court decision, Costa says the most important thing is not to override or annul the registration of the La Española brand in every country. “What they are saying is that there shouldn’t be a [European] community-wide brand and that someone, the SOS Group, should begin — whether or not they appeal the judgment — the steps required in each of the individual countries where [La Española] is registered; [they can argue that] this brand is not an accepted, registered brand and they [SOS] could file to annul the previous registrations [in specific countries]. Aceites del Sur still has a brand that is registered in each specific country.” Waiting 11 years to effectively delimit the similarity of the labels creates confusion, he adds. There is nothing practical about this because the judgment [of the European court] cannot override all the registrations [made in various countries]. “It’s true that the labels are very similar,” he says with irony.
Costa also believes that the European court’s legal decision is unimportant. What the SOS Group really wants is for this [practice of copying] not to happen to anyone, not just in Spain but in any other country. This is true “even more in developing countries, where putting a Gypsy woman on your bottle is not the sort of thing that is going to end. The repercussions are zero. Sales will continue to be the same; the registries will continue to be unchanged. SOS’s obsession concerns the rest of the manufacturers.”
The Challenge for Distributors
The big battle of the producers is with the distributors, according to Costa. Seisdedos agrees, noting that “the challenge for brands now is to confront any distributors who are in some way destroying the value of their product category.”
According to Costa, distributors “always copy the market leader, featuring their own products and cutting prices by 50%. The manufacturer doesn’t dare to denounce that practice because tomorrow [the distributor] can ask [the manufacturer] to cut its supply [of the product with the distributor’s label]. That’s where there is a battle, especially in traditional food products and other commodities like this one. At the moment, the problem is that the distributors have 50% of the market.”
There are only a handful of multinationals who insist on continually innovating, such as Danone in dairy products, and Procter & Gamble in cosmetics and other consumer goods] Apart from those companies, it is very hard to talk about qualities that differentiate one product from another, says Costa. “The consumer has only a minimal perception of brand qualities. In food and household goods, there is nothing that cannot be copied in any country. In contrast, the consumer can immediately identify products that are going to compete online. The first thing that I have to do, because I am the newcomer, is something that is strictly legal within the code for identifying the leader.”
The first thing is to create a product that is equal with that of the leader, with a brand that resembles the leader’s as much as possible. Then, it’s necessary to try to make the contents also similar to that of the leader. When it comes to consumers, 70% of all decisions “are made at the point of sale,” notes Costa. “In those three nanoseconds that I am going to decide between two products, I guide myself by identifying the code of colors; I see the price differences, and I [decide to] try something. This is one of the reasons for the success of distributors’ brands.”
According to Costa, manufacturers are starting to forecast that they will one day have to confront their distributors. “They are waiting to see who will make the first step,” he says. When Carbonell sends a message, stating that “I am not going to permit anyone to copy me,” that will also be a warning to its distributors. “Distributors must know that if they put a little Gypsy on their bottle, at best I will also sue them.”
How can producers defend themselves from these attacks? First of all, Costa suggests that they take another look at their registrations before beginning a counter-attack campaign. Second, they need to identify all the visual components of their brand: the logo, the distribution strategy, the colors. Third, they cannot turn a blind eye to even a single relevant case of copycatting because “if I do that, I encourage others” to do likewise. Finally, they need to “find out whether they want to strengthen their brand or strengthen their relationships with distributors.”
Given the rise of protectionism and trading blocs around the world, the battle to protect corporate brands is not something that occurs on a country-by-country basis. “Registration processes that identify visual elements are increasingly relevant because with a single registry, I suddenly have 50% of the global market,” says Costa. On the other hand, companies must deal with “the growing capacity of developing countries to identify intrinsically similar qualities” in products. For example, Argentina has managed to produce wines and olive oils that are similar in quality to products made in Spain. “If I have a product that is copied in another part of the world, it is much more appealing for me to get involved in a lawsuit about copying that brand. That’s why it is more and more important for multinational companies to learn about registration lawsuits throughout the world,” he says.