What’s In A Name? Ask Founders Who Sell Namesake Brands

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John McAfee

Even if you’ve sold out for millions, it’s not easy being the name behind a namesake brand. Ask John McAfee, whose personal website is called Who Is McAfee — a question on a few lawyers’ minds these days. The tech pioneer developed the first commercial computer anti-virus software, which bore the brand name McAfee until he sold it to Intel. But that’s not the end of the story—and we’re not talking about his own colorful story.

Intel now wants to spin off the Intel Security Group, founded in 1987 with McAfee’s IT security business, under the McAfee name. But that plan could be scuttled by the man himself, who says he had never gave Intel the rights to his personal name.

This week Intel reached an agreement with the investment firm TPG Capital to spin off its Intel Security unit as a separate cybersecurity company, giving Intel 49 percent and TPG 51 percent of the new firm, which they intend to call McAfee. In return, Intel would receive $3.1 billion in cash.

Intel’s lawyers duly informed McAfee’s MGT Capital Investments, where he is executive chairman and CEO, that the company intended to rebrand as John McAfee Global Technologies. TPG Capital had paid Intel $1.1 billion for a majority stake in McAfee in what is known as a corporate carve-out deal.

Now TPG is forming a joint venture with Intel, with Intel arguing that it has the right to use the McAfee name as a result of its $7.7 billion purchase of McAfee Associates, which it turned into Intel Security. While McAfee and Intel’s lawyers duke it out, Intel wants to sell its cybersecurity business for the cash to help it grow beyond computer chip manufacturing and reposition for the explosive mobile device and wireless network usage.

John McAfee and MGT have their own new business ventures and products to market, and so are filing suit to block Intel and defend their own “use of or reference to the personal name of John McAfee and/or McAfee in their business,” particularly in the renaming of MGT. McAfee argues that MGT would not infringe on Intel’s trademark rights or breach any agreement between the parties by using his surname. Intel argues it’s their brand name to use as they like.

McAfee isn’t the only founder who finds himself at odds with the right to use his name after a namesake company was sold. Kate Spade, who sold her eponymous line of handbags and accessories to Liz Claiborne for $124 million in 2007, recently launched Frances Valentine as a new brand. She changed her nom de design to Valentine to skirt any legal action as she makes the rounds to do PR and launch the brand. (“We’re not trying to be cheeky or coy,” she told Business of Fashion. “It really was to distinguish the name, and separate the two worlds. Obviously we’re super proud of Kate Spade and we want to be respective of both.”)

In another recent example, shoe designer Donald J. Pliner can no longer ply his trade under his name after selling his brand, and is tip-toeing around what he’s calling his new men’s and women’s lines, with a press release noting: “This marks the first time in over 27 years that the legend finds himself as an independent designer, away from the eponymous label Donald J Pliner™ he founded in 1989.” Pliner was sued in August by The Donald J Pliner Company—formed by Castanea Partners, which bought his namesake business and brand in 2011—after he launched a collection following a one-year non-compete period.

Much has changed since McAfee made his name synonymous with computer security. While McAfee’s antivirus software is still widely deployed in enterprise settings, hundreds of start-ups have entered the security space as well as more established competitors FireEye, Palo Alto Networks and Proofpoint all gaining traction.

Hindsight being 20/20, McAfee feels Intel mishandled his business, which has lost nearly half its value in six years. “I never understood why a chip manufacturer would have purchased a suite of software security products in the first place,” McAfee told Business Insider. “The product development and maintenance processes are radically different, as are the marketing and sales processes. And there is virtually no customer overlap.”

The security business was virtually started by McAfee in 1987 and he wants his name back to use for his own ventures such as MGT Capital Investments Inc., which he wants to rename John McAfee Global Technologies Inc. “Intel should wait to see whether they have any right to use my name,” McAfee texted a Bloomberg reporter this week.

TPG has tapped Intel Security SVP/GM Chris Young as CEO of the new McAfee, with Young commenting: “As a standalone company supported by these two partners, we will be in an even greater position of strength, committed to being the best provider the cybersecurity industry has ever seen.”

As the global PC market continues to contract, Intel is shifting focus to the Internet of Things and data-crunching, or as the analysts at Stifel put it, “trimming back on its non-core products and PC market exposure.”

“As we collaborate with TPG to establish McAfee as an independent company, we will also share in the future success of the business and in the market demand for top-flight security solutions, creating long-term value for McAfee’s customers, partners, employees and Intel’s shareholders,” Intel CEO Brian commented this week.

The colorful McAfee, meanwhile, is marketing his cybersecurity services (see the video promo below) and hopes he can use his surname (and not just ominous videos) to do so.

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