Why Register a Trademark & Protect My Intellectual Property?
American investor, Warren Buffett famously spoke of successful businesses as, “economic castles with unbreachable moats”. While the castle refers to the product or service being offered, the moat signifies a business’s ability to create a sustainable commercial advantage in a competitive market. Intellectual property protection is key to defending your product from rival businesses. In a rapidly expanding global market, propelled by the internet, awash with counterfeit products, a company’s trademark is its primary fortification.
A trademark is a logo, image or symbol (or more unusually, a shape, colour or sound) that distinguishes your goods or services from those of your competitors. It not only defines the origin of the goods, denoting quality and accountability, but it creates an image, attracting consumers through its presentation, marketing and advertising. A company is not required to register its trademark, however it is through registration that maximum protection can be effected.
(i) Extending your protection
It is a common misconception that registering your company or domain name prevents others from using that name as a trademark. The only way to guarantee legal exclusivity is to register your trademark. Although it is possible to take action at common-law to prevent a competitor from passing off your unregistered mark as their own, this can be a costly and difficult process. Not only must you prove that good will - in the shape of a strong reputation - is attached to your mark, but you must also show that the misrepresentation is likely to deceive the public.
By registering a trademark the presumption of valid ownership is raised, and all that must be proved is that an identical mark was used without consent for the same goods or services. The unlicensed use of similar marks for similar goods or services will also constitute infringement where it can be shown that there exists a likelihood of confusion on the part of the public. Further protection is afforded where a good reputation can be said to have attached to the RTM (registered trademark). In this case an infringement occurs when a trader takes unfair advantage of the mark, or uses it in a way that is detrimental to its distinctive character.
(ii) Securing your stronghold
Registering your trademark will also minimise the risk of being sued for trademark infringement by a competitor. Under trademark law, registration is a defence to an action for infringement. In the absence of any innocent use defence, using a trademark that has been registered by another business could lead to expensive litigation, forcing you to rebrand your goods or services, thereby losing any associated goodwill amassed to date. RTMs are identifiable by the ® symbol. Since it is an offence to use this symbol for unregistered marks, its presence is likely to act as a strong deterrent for would-be infringers. Moreover having registered your trademark, you will receive notification from the registering office, of applications for similar or identical marks targeting similar market areas. This allows you the opportunity to oppose those applications that, if successful, would threaten the exclusivity of your mark.
(iii) Financial incentives
There are also significant financial incentives to register your trademark. An RTM is a quantifiable asset with a monetary value. It is treated at law as a form of property, and can therefore be bought, sold or licensed for exploitation. By demanding royalties for usage of the RTM under a license, it can serve as a revenue base for the registered owner. RTMs can also be used as a security interest in financial agreements.
Looking at the bigger picture, a business with an RTM, shielded from the risks of lengthy infringement disputes, and confident of the ownership and parameters of its intellectual property, is a business fortified against competitors, and therefore attractive to potential investors and buyers. Registering your trademark is therefore not only a way to safeguard your immediate concerns, but is also a means of protecting your future interests, should you wish to exploit your success through licence agreements, or sell your assets for the value they are truly worth.