9
Aug/02

Joint Venture Forth Warily


The Wall St. Journal, the NY Times and MSNBC are reporting tensions between Rosie O’Donnell and Gruner + Jahr, her co-venturer in publishing ROSIE Magazine (the re-named re-positioned McCALLS (see background)).

If the parties’ can’t resolve their differences, bu someone wants to continue the magazine, what should it be named?  This illustrates an unplesant scenario for the lawyer drafting the trademark section of a joint venture agreement (or more accurately, for the marketing people who name the joint venture). 

If a joint venture is named after a compound of two parents (which was the first choice here – ROSIE McCALLS), you could have a situation where no one will benefit from the goodwill created by the joint venture, unless both parties are prepared to permanently contribute their brands to the venture.  OWENS CORNING and DOW CORNING are examples of the form working successfully.  However, if the parties quarrel, a buy-out of one partner will ordinarily necessitate a name change (with possible loss of goodwill).

In the ROSIE situation, where one partner contributes its name to the venture, a buy-out is also problematic.  If there is a split here, G+J isn’t likely to keep the name ROSIE without her; it also might not be prepared to sell her what is in effect the McCall’s subscriber base (but you never know – also, we don ‘t know to what extent O’Donnell is bound by non-compete agreements should the joint venture be terminated).

Speaking from a trademark law  (and not marketing) point of view, it may be better to pick an original name for a joint venture (with the parent’s names used as secondary identifiers, if desired).  At least that way, if there is a divorce, there won’t (involuntary) loss of good will.

Disclaimer – We have no idea how much in the articles are true and how much is mere corporate gossip.  I just used the ROSIE situation to illustrate one potential pitfall in naming joint ventures.

 

 

Comments are closed.