Buying only the trademark of a bankrupt brand, Mentholatum (1975)

Buying a brand without buying the company

The heart of this decision was that, rather than rescue a bankrupt company whole, Rohto extracted only the intangible asset left inside it: the brand. To take on the rebuilding would have meant carrying about $6.7M (¥2bn) in liabilities and several hundred employees. Rohto shouldered none of that, inheriting only the established brand and its customers and handling production with its own strength in mass-producing a narrow range. Sparing itself the time and expense of building a brand from nothing through advertising while walling off the burdens of the failed firm — it can be read as a design fixed wholly on keeping the entry fee small in the mature market for mass-market drugs.

A borrowed brand, though, is not one’s own. Ōmi Kyōdaisha came back with Mentāmu, so there was no monopoly, and a structure that leaned on a licence kept a weakness that could waver with the terms of the contract. That is precisely why, thirteen years later, Rohto bought the source company itself and raised its right to use into a right to own. Carving out only the brand at the moment of bankruptcy was a deft, light-footed entry and at the same time carried within it the homework of eventually having to own the source. Enter light, decide heavy later — the character of this move as a doorway into diversification shows through it clearly.