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Online Guide: A Dictionary of Key Brand Protection Terms

by Andrew Schydlowsky (TrackStreet)        October 9, 2018


Amazon Brand Registry
Antitrust Law
Authorized Dealer Program
Brand
Brand Protection
Brand Value
Colgate Policy
eMAP
iMAP
Leegin
MAP Monitoring
MAP Policy
MRP Policy
MSRP
Per Se Violation
Resale Price Maintenance
Rule of Reason
UPP


Amazon Brand Registry

A program designed to help manufacturers and other brand owners more directly control the content of their products and brand on the Amazon marketplace.

When a brand is accepted by Amazon into the program (which requires a formal application), they are given direct influence over product page content for their brand, the ability to limit which sellers may publish their content on Amazon, and access to tools to help catch instances of rogue sellers violating the company’s trademarks, copyrights, or other intellectual property on the site. Having these tools to spot cases of IP theft on the marketplace makes it easier for brands owners to submit complaints to Amazon and for Amazon itself to pull down the offending sales listings.  

Learn more about the Amazon Brand Registry here.


Antitrust law

US antitrust law is still primarily reflected in the series of laws contained in the century-old Sherman Antitrust Act of 1890. The stated purpose of those laws was to prevent suppliers from colluding or conspiring together to maintain specific price levels for products and services (“price fixing”), or to prevent certain manufacturers and resellers from conspiring to keep other resellers from competing (“restraint of trade”).

In terms of minimum advertised price (MAP) policies and other reseller pricing policies, what will most often characterize an antitrust violation is if a manufacturer and reseller enter into an agreement either to set a product’s resale prices or to keep other would-be retailers from being able to compete fairly.

Generally speaking, the best way to avoid legal exposure is to structure your MAP or other reseller policy unilaterally—as opposed to using a two-way agreement format—meaning you state in the policy what you want from your resale partners and the consequences for failing to comply, and then the partners are free to adhere to the policy or not (and face the consequences.)

It is also important to ensure that your company does not do anything in enforcing the policy—such as making verbal agreements with specific retail partners, coercing a retailer to behave a certain way, or making exceptions for some but not others—that could later be construed as either price fixing or restraint of trade. In other words, don’t show favorable treatment in one set of circumstances that you wouldn’t also show to another in the same circumstances.

Learn about how your MAP or other policy could be affected by antitrust law here.


Authorized dealer program (ADP)

Unlike the other reseller policies defined here, an authorized dealer program is not primarily about controlling how resellers price your products but rather about which resellers you allow to represent your brand and carry your inventory in the first place.

When you create an ADP, you are telling your distributors and wholesalers which retail companies they may sell your products to (and perhaps which channels they can be sold in)—and that they may not sell to anyone not on that list. This gives you more control over (and more visibility into)  which companies are able to buy your products for resale and it can also help you limit rogue resellers and pricing policy violations.

An ADP is usually an element of a broader program the manufacturer has in place for controlling its pricing and safeguarding its brand. For most online listings, a reseller would need to submit a detailed application to the marketplace to be allowed to sell the brand’s products,  and that application process would require the seller to demonstrate they have manufacturer authorization to retail those products.

Learn more about authorized dealer programs here.


Brand

The memories, impressions, associations, and emotions your customers and the general public has about your company and your products. In other words, your brand is the sum total of how people feel about your company, and it includes:

  • The promise your product makes, and whether or not your customers believe it
  • The story your products enable customers to tell themselves
  • How trustworthy(or untrustworthy) the public believes your company to be
  • How a customer feels she’s treated by an employee
  • The way your company handles negative feedback or bad product reviews
  • Your prices (and how they relate to those of your competitors)
  • How you package or present your products or services
  • The way doing business with your resellers makes your customers feel


Brand protection

All of the systems, actions and policies a company creates to safeguard the value of its brand—which, as many businesses do not realize, is often one of a company’s most valuable assets.

Brand protection could include monitoring all public references to your company or products, from media mentions to customer reviews online,  and taking any appropriate and available actions to prevent or counteract negative public perceptions from taking hold. Brand protection can, and should, also include implementing a reseller pricing policy—such as a minimum advertised price (MAP) policy or minimum resale price (MRP)  policy—to protect against reseller price wars and the potential degradation of your brand’s perceived quality in the market.


Brand value

A tangible, quantifiable asset a company builds over time, based both on the sum total of consumers’ feelings about its products  and on the likelihood those feelings will lead them to buy from the company.

Examples of businesses with strong brand value include Coca Cola, Disneyland, and Apple. 

Protecting your brand value is one of many reasons it is important for your company to implement and enforce a reseller pricing policy (or several such policies). Without the ability to influence how, where, by whom, and for how much your products are advertised or sold, you risk allowing rogue resellers to create a poor buying experience for your customers—which can erode brand value over time.


Colgate policy

In the Colgate case of 1919, the Supreme Court established the legal principle—still in effect today—that a manufacturer may legally set its own prices, as long as such action is unilateral. In other words, the supplier is free to establish its minimum allowed resale pricing, and its resellers—which have their own independent rights—may either adhere to those minimum prices or not. If a reseller violates the supplier’s minimum price guidelines, the supplier is free either to continue doing business with that reseller, or not.

This court decision has since been called the Colgate Doctrine and has led the unilateral pricing policy (UPP) to sometimes be referred to simply as a Colgate policy.

Legally speaking, this unilateral policy approach has proven perfectly legal and able to withstand challenge in both federal and state courts. In fact, a unilateral MRP policy has proven for many suppliers to be one of the most effective protections against resale price erosion.


Electronic minimum advertised price policy (eMAP)

An electronic minimum advertised price (eMAP) policy covers all electronic channels a reseller might use to advertise a manufacturer’s products—not only through online ads and sales listings but also using methods such as email and text messages to customers.

Typically, a manufacturer will opt for a MAP policy or an IMAP or EMAP variant—covering advertised prices only—when the company’s main concern is establishing a more-or-less uniform reference price for its products to avoid undermining its brand value and upsetting key reseller partners.

Note: You can have both an eMAP policy and a standard MAP. This might be a smart strategy if, for example, you have resellers that do not sell your products online or using any electronic means, and you don’t want to clutter your standard MAP policy for them with lots of guidelines about marketing channels they don’t use.


Internet minimum advertised price policy (iMAP)

An Internet minimum advertised price (iMAP) policy covers Internet-based offers only, meaning this policy sets the guidelines only for the prices your retailers may advertise your products (they are free to sell them for any amount they choose)—and only for online ads and sales pages. It does not include other electronic communications such as emails; that is a separate type of policy: an eMAP (which is defined above).

Note: A manufacturer can choose to have more than one of these policies, so publishing an iMAP policy does not preclude you from also dictating offline advertised pricing minimums for your retail partners.


Leegin

According to a nearly 100-year-old ruling by the US Supreme Court, resale price agreements were considered “per se” illegal, or illegal on their face. But in 2007, with the landmark Leegin case, the Court held that setting minimum resale prices (either by oral agreement or in writing) would be judged under the more relaxed standard called the “rule of reason.” In other words, each case would be examined individually and such agreements would be deemed legal unless a court determined that it created a clearly anticompetitive environment.

(See definitions for “per se violations” and “rule of reason” on this page.)

Given that courts are now applying the “rule of reason” standard to pricing agreements, the odds are low that a given manufacturer will face federal charges from antitrust regulators and lose in federal court. But it is worth noting that several US states—including New York, California, and several others—still treat resale price agreements as “per se” illegal, which could put a supplier at risk if even one of its customers, vendors, business partners or competitors is located in those states.

For this reason, and because it will greatly reduce your chances of landing on an antitrust auditor’s radar in the first place, it is safer to build your reseller pricing program around a unilateral policy—not a two-way agreement that you and your resellers will have to sign.

Learn more about what the Leegin case means for your brand here.


Minimum advertised price (MAP) policy monitoring

The comprehensive set of processes and practices (and, ideally, automated software tools) a manufacturer or brand uses to track its products’ presence across the Internet at all times, to look for violations of its pricing policy.

Learn more about MAP policy monitoring here.


Minimum advertised price (MAP) policy

The most commonly used term to describe reseller pricing policies—often used incorrectly as a catchall to mean all types of reseller pricing programs.

In reality, a minimum advertised price, or “MAP,” policy is one in which the manufacturer or supplier sets a minimum price only for its resellers’ “offers”—meaning advertisements and promotions. MAP policies never cover the actual selling price - just the advertised price; resellers are free to actually sell the supplier’s products for whatever price they choose.

Typically, a manufacturer will opt for a MAP policy—covering advertised prices only—when the company’s main concern is preventing public pricing of its products that it worries will undermine its brand and upset key retail partners.


Minimum resale price (MRP) policy

A minimum resale (or retail) price policy is far broader than MAP, allowing the manufacturer to set minimum prices for its products applicable to all offers, as well as the actual selling price. This means each online step through and including checkout is subject to the policy, while, at the brick-and-mortar level, everything both outside and inside the store is covered.

Because it is more comprehensive, an MRP can be a more effective brand protection policy for luxury brands or companies that do not want the public to find that customers can buy their products for less than they see advertised.

Note: MRP is often used interchangeably with the term unilateral price policy (UPP), which is defined below.

Learn more about the differences between MAP and MRP policies here.


Manufacturer’s suggested retail price (MSRP)

As its name implies, a manufacturer’s suggested retail price (MSRP), is simply the price a manufacturer suggests its retailers list its product for. When it comes to cars, for example, MSRP is known as the sticker price—which is rarely what the product actually sells for. Manufacturers expect that retailers will allow for some negotiation with customers and will sell their products a little below the MSRP.

When a manufacturer establishes an MSRP for its product, the company is typically attempting to accomplish a few key goals. First, the manufacturer is attempting to standardize a product’s retail price across the company’s resale channel. This way, the manufacturer can protect the interests of all of its retailers—particularly the brick-and-mortar store chains carrying its product line—from being unfairly undersold by competitors.

A second goal of an MSRP is to establish a price that takes into account all costs required to sell the product—from costs incurred in the manufacturing and distribution processes, to typical markups for wholesalers and retailers. This way, the manufacturer helps ensure that all businesses involved in the sale can earn a profit from it.

Finally, just as manufacturers establish MAP pricing in part to protect their brand’s perceived value—because a product constantly advertised at bargain prices can eventually harm the brand’s reputation—an MSRP also helps manufacturers protect their brand over time, keeping its retail prices at levels that suggest a quality brand.

You can find more detail about MSRP and how it differs from MAP pricing here.


Per se violation (in antitrust law)

Under the FTC’s Sherman Antitrust Act (the set of federal laws governing price fixing, monopolies and other anti-competitive business behavior), violations fall into two primary categories: a “per se” violation or a violation of the “rule of reason.”

A per se violation is illegal on its face, requiring no further investigation. An example would be a group of manufacturers or retailers working together on a price-fixing scheme to prevent competitors from entering the market.

MAP policies have long been subject to the manufacturer-friendly legal “rule of reason” standard and not treated as per se violations. This means that a manufacturer’s practices are generally deemed lawful unless it can be shown they are unreasonably anticompetitive. (See “rule of reason” definition on this page.)

Learn more about the reseller pricing practices that might constitute “per se” violations here.


Resale price maintenance (RPM)

Resale price maintenance (RPM) is the strategy a manufacturer or brand owner uses to ensure its products are not sold on either the wholesale or retail market for less than the amounts it wishes.

It’s important to point out that resale price maintenance can, if deployed improperly and without expert guidance, land a brand owner on the wrong side of U.S. Federal antitrust law. The key distinction here is between a resale price maintenance agreement (which, if executed incorrectly, could be deemed illegal price fixing) and a resale price maintenance plan (which does not involve setting agreed-upon prices with distributors or retailers and therefore wouldn’t be illegal).

Also worth pointing out: RPM is another term used as a catchall referring to any policy controlling reseller pricing.

In our view at TrackStreet, resale price maintenance should actually refer to a broader, comprehensive program to combat price erosion and damage to your brand.

For example, you should think of your resale price maintenance strategy as involving several tactics, such as:

  • Continuously monitoring your resale channel and aggressively pursuing gray-market sellers.
  • Drafting, publishing and enforcing your reseller pricing policy MAP, MRP, iMAP, eMAP, etc.).
  • Establishing an authorized dealer program, also defined on this page.

Learn more about resale price maintenance here.


Rule of reason

Under the FTC’s Sherman Antitrust Act (the set of federal laws governing price fixing, monopolies and other anti-competitive business behavior), violations fall into two primary categories: a “per se” violation or a violation of the “rule of reason.”

Whereas a per se violation is illegal on its face (such as a group of manufacturers or retailers fixing prices to prevent competitors from entering the market), the rule of reason standard is much more manufacturer friendly. Under this legal standard, regulators and courts assume a practice is lawful unless it can be shown that it is unreasonably anticompetitive, after weighing the pro-competitive and anti-competitive effects.

In striking this balance, the Supreme Court has stated the primary concern of US antitrust law is interbrand competition (i.e.,one manufacturer’s brand against that of another). If the conduct under question promotes interbrand competition, a manufacturer may restrict intrabrand competition (i.e., competition between two resellers of the same brand).

While a price policy clearly restricts intrabrand competition, application of the rule of reason means that there is usually relatively little antitrust risk, given that rule of reason cases are typically difficult to win for the government and private plaintiffs.

(See “per se violation” definition on this page.)

Learn more about the reseller pricing practices that are reviewing according to the rule of reason here.


Unilateral price policy (UPP)

A unilateral price policy (UPP), sometimes also referred to as a unilateral policy (UP), is similar to an MRP in that a manufacturer uses it to dictate its minimum acceptable prices for their resale partners both to advertise and actually sell their products.

But the term UPP is used specifically to describe policies that are unilateral—meaning one-way statements from the manufacturer to its resale partners, as opposed to agreements that those resellers must sign.

In reality, most MRP policies are also structured as unilateral statements and not agreements. This is true both for legal reasons (such an agreement could be challenged as an antitrust violation) and for business reasons (it’s a time-draining headache to get every one of your resellers to sign an agreement and then sign it again every time you make an update.)

So the term UPP is really an outdated term—when you hear it, you should think instead of a minimum resale policy (MRP).

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