What every business should know about trademarks

By: Shireen Smith | Posted: 28th September 2010

The consistent use of a name is very important in establishing a reputation. Once a reputation is established, brand value is generated in the business name. If you have filed a patent or established a business, or developed names for product lines, the next step is to consider trade marks. Trade marks are the intellectual property rights (IPR) that protect names, so every business potentially has this IPR as well as copyright in its written and other materials. Unique words and designs that represent the “brand name” or “brand identity” of your products and / or services are commonly known as a trade marks, while the brand identity for a service (as opposed to goods) is known as a service mark. However, in practice, people use the term trade mark to cover both.

Developing a brand

Developing a brand may significantly increase the impact of your marketing. If your audience already recognises your brand (that is, your trade mark) then you have already communicated some of your message, and your identity when embarking on a campaign for a new or updated product or service. Strong brand names help to promote loyalty among your target market. If you maintain high standards of quality, offer value for money or carve out a niche for your business, then your brand name may be one of the first to spring to the minds of potential consumers.

A “trade name,” the name of a company, does not necessarily function as a trade mark. Your business name is probably the name you regard as your mark. It is the focal point of your business, and is generally what you use to answer your phone, what you use in any advertising or other promotional material and what people will use to recommend your business. You build goodwill in it through use.

Brand Goodwill

Goodwill is difficult to value as it reflects the reputation, and other positive characteristics, of your business. It is created through the trust others have that your business will live up to its claims. The more customers you have, the more trust, and thus more goodwill, will attach to your business name.

Move Fast

If having a brand is important then, if you can afford it, register a trade mark straight away, so your competitors know you have a better right to use the name when they come to choose their own name. Until you secure your trade mark add the letters ™ next to your name, so others know you are using the name in a trade mark sense. Once your trade mark is registered you can change the symbol to an ®.

Avoid getting a ‘cease and desist’ letter

In any event, even if you don’t have the funds to register a trade mark, have a trade mark search to clear the name, ideally, before you start up, or as soon as possible. If there is a problem, better that you know about it sooner, rather than wait till you receive a ‘cease and desist’ letter. The consequences of using a name that is too similar to someone else's trade mark could be disastrous for a business - you could be stopped from using the name, and become liable to pay damages. This could happen at any time - early in the life of your business, or later once you have already built up substantial goodwill in the name. Just imagine how difficult and costly it could be to have to change names under time pressures.

Does the mark qualify as a Trade Mark?

Another important point is to choose a name that is capable of trade mark protection. Whether a mark meets the various requirements of trade mark laws to qualify as a trade mark is a subject in itself, but briefly the rules are as follows:
The Trade Marks Act 1994 prohibits a trade mark being registered if it is:
-Against public policy or morality
-Made in bad faith
-Consists or contains a representation of the Royal Crown or Her Majesty or a national flag
-Consists exclusively of signs or indications which may serve to designate the kind, value, quantity or purpose of goods or services

Your chosen name should avoid falling into one of these categories and, be distinctive. In other words, your mark must be different and not descriptive. One benefit of a clearance search is that it gives you a report saying whether your chosen name is capable of trade mark protection. Should the search show a problem, you may be able to overcome it by making slight adjustments to the mark. The sooner you search the name the better, because it is far easier to make name adjustments when you are less established.

Shireen Smith is an intellectual property solicitor and technology lawyer at Azrights Intellectual Property Solicitors, London providing advice on how to register trademarks, and International trademark registration, patents and domains and domain disputes.
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Tags: money, marketing, audience, brand name, promotional material, target market, niche, goodwill, business name, consumers, reputation, loyalty, brand identity, patent, focal point, brand names, intellectual property rights