An Introduction to Trademarks
Creating a recognizable and reputable brand is instrumental in growing your business. Your branding might include words, designs, shapes, slogans, or combinations of these things. Each of these elements can qualify as a trademark, so long as you use it to distinguish your goods and services from those of other businesses. Trademark law is the most effective legal tool for protecting these elements of your branding from misuse.
In most English-speaking countries, there are two primary ways to obtain trademark rights: through use and under trademarks legislation. Use of a trademark — even without applying to register it — provides its holder with some protection, known as common law trademark rights. As will be discussed below, however, registration offers significant benefits over common law trademark rights.
Developing a Strong Trademark
Developing a trademark for your business can be a difficult exercise, but one that can also propel your business to the next level. A unique trademark allows consumers to more easily find and distinguish your brand and associated products — leading to a better bottom line. Nonetheless, not all trademarks are equal. Some words, slogans, and designs will have a more lasting impact on prospective consumers and one of the greatest challenges in devising a good trademark is balancing its distinctive character with how easily it can be remembered. At a high level, the more generic or descriptive a trademark is, the less likely you will be able to secure legal protection for it. Generic trademarks include words, terms, and phrases that are commonly used to describe the good or service. For example, if you are a beer brewing company, adopting branding materials that label your products “Beer,” “The Beer,” or “Beeeer” are highly descriptive and unlikely to be afforded exclusive rights, especially given how likely it is that other brewing companies considered using the exact same words in conjunction with their products.
On the other end of the spectrum, the more arbitrary or fanciful the mark is, the more likely it is to successfully secure trademark protection. However, the limitation of arbitrary and entirely made-up marks (such as “Google” and “Lululemon”) is that it is more difficult and takes longer to implant the entirely made up word or phrase in the minds of consumers. For example, if you are a beer brewing company, adopting branding materials that label your products “Karklif” are much more distinctive than the aforementioned “Beer” branding materials because it is highly unlikely that anyone else is associating “Karklif” with beer products. However, it is also much more difficult to remember such a unique name. In the mind of a consumer, it is really easy to remember a beer brand that calls itself “The Beer,” but to remember the “Karklif” beer brand a consumer would need a fairly strong positive reaction to the product to think “this brand of beer is so good that I want to commit that unusual name to memory so I can purchase it again.”
In between these two extremes, are trademarks that are suggestive of the products or services offered. These middle-ground marks allow consumers to easily remember your brand without having to exert a lot of effort or write the brand name down, but are not as distinctive as arbitrary or entirely made-up marks. Thus, the ideal trademark is creative but nonetheless easy to remember and associate with a certain product or service.
The Value of Registering
In most English-speaking countries, trademarks can be protected through statutory registration under trademarks legislation. If a trademark is registered, it is afforded a broader scope of protection against imitators who wish to direct consumers away from your business and towards theirs. Imitators can directly, and illegally, affect your sales by marketing their products or services under a trademark that is the same as or confusingly similar to your registered mark and consumers may not scrutinize their purchases enough to identify the product as a knock-off, leading to a direct loss of sales for your business.
Trademark registration also protects against the devaluation of your brand. If imitators use a registered trademark or a confusingly similar trademark in association with their products or services that are of an inferior quality, clients will come to associate your registered brand with a lower standard of quality. Even if your genuine products maintain a high standard, allowing your trademark to be associated with lower quality imitators can dissuade consumers from making genuine purchases in the future by damaging your genuine brand’s market reputation. Thus, if you see a competitor using similar branding materials to your registered trademark, you ought to consider enforcing your trademark rights to prohibit the competitor from imitating your brand and capitalizing off of it.
Lastly, owning the exclusive right to use a trademark enables you to license away part of that exclusive territory to other businesses for money. Exclusive and non-exclusive licenses to use your trademark can generate additional revenue from licensees who wish to benefit from association with your business’s market reputation. As a licensee you can still protect your brand’s identity and standard of quality in the market by providing terms and conditions in the licensing agreement that permit you to terminate permission of the licensee’s use of the licensed trademark if any such use by the licensee could harm your business.
Devising a Trademark Strategy for Your Business
In devising a trademark strategy for your business, it is important to consider perception by prospective clientele. For example, consider whether the name or design you are contemplating will make a lasting impression on consumers and allow them to quickly and effortlessly identify your products from those of your competitors. The main thing is that it must be something that distinguishes you from others; you can use pretty bright colours or you can be the one who utilizes webinars for branding in a very unusual niche. In this case, you will create a brand image of a company that tries to educate first.
It is also important to contemplate whether the lost sales arising from competitors unlawfully using confusingly similar branding materials outweigh the cost of trademark registration. Consider how you will be marketing your brand, like whether most of your advertising will occur on social media, whether your brand will be physically affixed to your products, and whether you are targeting a broad demographic or a particular niche.
For most businesses, it makes sense to consult an intellectual property lawyer when developing a trademark strategy. As often the case with legal advice, the upfront costs help avoid major expenses down the road. Salvaging a weak trademark can be highly challenging — it is wise to instead start strong by developing a unique trademark.
By: Chris Heer and Dominic Cerilli