Once your business gains traction, think about trademark registration. It can save you plenty of time and a bundle in legal fees over the lifetime of your brand.
Successful brands are worth millions of dollars and the value of even small brands would surprise you. These valuations are based on the value they create for the business. Great brands get constant word-of-mouth publicity, are able to command higher prices, enter new product segments with ease and even earn royalties on the brand by licensing it to another party. Now, what if some other business were to use this brand name, without permission, and your only recourse is a painful court proceeding that could take years to resolve? That shouldn’t happen, right?
This is where a trademark registration comes into play. It’s not necessary at all. But having one ensures that you have full control over the word, logo or slogan you’ve trademarked. Furthermore, if you’ve registered the trademark, it becomes easy to establish your rights in court, saving you both time and legal fees. Still not convinced? Let’s go through the three main ways your brand could be compromised if you don’t have a registered trademark for it.
Lose Rights to Name
If you don’t trademark your brand, it’s entirely possible for some other business to pick the same name and register it. If this does happen, this other business could then try to stop you from using the name, even though you were doing business under it first. Now, trademark laws do recognise the first user of the trademark, which means that you will still – after spending a lot of money in legal fees – retain your rights to the name. But since trademark rights are territorial, unless you’ve been doing business across India, the courts may divide the rights to the name by area of operation. Therefore, if the other business has been doing business under the name in a larger part of India, it would have a greater coverage under the name. On the other hand, if you’d registered the name early on, you would not face this problem at all.
Cause Confusion Among Consumers
Trademark owners have the ability to oppose new trademarks that sound too similar to their own. For example, Satyam Infoway Ltd managed to get the courts to disallow Siffynet Solutions Pvt Ltd on the grounds that it would confuse consumers. This right is not available to those who have not trademarked their brand name. Therefore, another brand with a similar name would then be perfectly within its rights to operate across India (and even trademark the name itself), potentially diluting your brand presence if the other brand is more successful than yours. In such a case, legal recourse may not even be possible.
Do you know how many variations of your domain name there could be? 100s, surely. And there’s a whole industry based merely on the buying and selling of successful domains. In fact, it’s so common that there is even a Uniform Domain Name Resolution Policy (UDRP). In the absence of a trademark, it’s a bit harder to prove to the UDRP or the courts that the various domain combinations (emample.co.uk or example.biz) should be disallowed on the grounds that they affect the rights of your business. With a trademark, though, it’s very easy to do. Marks & Spencer, for example, which runs under marks-and-spencer.co.uk, even managed to block the sale of marksandspencer.com by a domain registrar.
In all three of the above cases you can see that the lack of a trademark has consequences. If any of them occur, you would need to quickly apply for a trademark, hire a lawyer and spend time and effort in sorting out the matter. With a trademark, though, these problems will be much smaller and definitely cheaper. So while registering a trademark before you’ve gained any traction is unnecessary, you should register your brand name the moment your business is starting to show promise.
This is a guest post by Hrishikesh Datar, founder of Vakilsearch, India’s leading online legal services provider for businesses and individuals. Vakilsearch is a web portal that provides documentation services, business and intellectual property registrations, including copyright and trademark, tax filing and accounts-related services.