Trademark: The Other Side Of The Coin

If you run or work in a business, you have probably come across some IP legal terms like copyright, patent, or trademark (TM), which is the focus of this article. What you may not be familiar with, however, are the benefits of having the goods and services your business deals with, legally protected.

The purpose of this article is not only to explain, from a technical point of view, what TM’s are, but also to give you a practical suggestion of how you can create and protect your own TM by taking into consideration other, well-known TM’s.

Nevertheless, before getting to the “interesting part,” of the article — that is, how to protect your TM — it is crucial to first provide a definition of what a TM is. Although a definition can be found in S.1(1) of the Trade Marks Act 1994, a TM can be easily explained as any sign that is capable of being graphically represented and distinctive, and that may help your business to distinguish its goods and services from those of other companies or individuals.

The word “sign” is also defined in the 1994 Act, but it cannot be considered satisfactory as the list of what can be recognised as a sign is, indeed, non-exhaustive.

Most conventional signs include single words, such as Gucci ® or Microsoft ®, and slogans, like the famous ®McDonald’s catchphrase, “I’m lovin’ it.”There are other signs that can be classified as trademarked, usually in combination with the ones listed above. They are 2D or 3D shapes and colours, though an internationally recognised colour code must be used.

So, for example, if I say Pantone number 1837, you would probably not know what colour I am talking about unless you have a Pantone colour scheme next to you. On the other hand, if I say turquoise and jewellery brand, you would immediately think of Tiffany & Co ®. The same sort of association would likely be made if I mention the colour purple together with chocolate — Cadbury ®.

There are also other unconventional signs, like sounds and smells, though it is rare for them to be trademarked as such; most often, they are trademarked together with conventional signs. In general, the rule is; the more distinctive the sign, the more likely it is that it will increase the goodwill and reputation of a company.

On the other hand, there are the so-called TM’s with a reputation, commonly called “well-known TM’s.” Whether a TM can be considered as such, depends on a number of factors that must be taken into consideration:

  1. The degree of recognition, in the relevant sector, by the public;
  2. The duration, extent and geographic area of any use, promotion or registration of the mark;
  3. The value associated with it.

Therefore, to put it simply, it follows that well-known TM’s are no more than marks that, because of their particular distinctiveness, can be said to have acquired a high degree of recognition by the public in the relevant area of commerce. In the examples given above, the TM’s mentioned are well-known TM’s.

Well-known TM’s become famous, not only because of their capability of distinguishing themselves from other marks, but more especially as the result of vast advertising campaigns, and an excellent marketing strategy, combined with an effective legal protection of the mark. It can be easily understood, therefore, that everything is a potential TM, from the name of your business to a particular product you sell in a 3D coloured shape packaging.

Once you have identified your TM, it is essential for your business to proceed to legally protect it.

The first step in protecting a TM is registration. This is the most important part of the whole process as it will determine the sectors, known as, “classes,” into which your TM will fall. The classes you decide to register your TM into will link your business to the sectors specified in them; however, during this process, you not only have to focus on what your business is at the moment but, just as importantly, what your business will be; what the future achievements of your business will be in the market, or markets. Therefore, it is of great significance that you have a clear idea of the future goals of your business.

Once your TM is appropriately registered, you will become the official proprietor and, as a result, your business will benefit from the rights such title confers.

From a purely legal point of view, registration of the TM will prevent third parties from using similar, or even identical signs, to your TM in the course of trade. Although this may sound pretty straightforward, there are hidden benefits. Once you have registered your TM, you have the monopoly rights on it; meaning that competition will be reduced, and this will enable your business to potentially achieve an important position in the market. This position will also help you decide in which direction you want to expand your business, and where you want your future profits to come from. Furthermore, you will be able to earn additional income from licensing, or selling, the rights in your TM to other businesses, exclusively or otherwise.

All this being said, it should also be remembered that a registered TM must not be forgotten and left in the corner — it requires care and dedication. Therefore, it is essential you have a marketing plan in place, and that you keep updating your marketing strategy concomitant with your TM strategy. After all, your TM is the face of your business.

In order to understand this, the real, and main, the function of TM’s must be clearly understood: A TM acts as a badge of origin. It is your TM that differentiates the goods and services of your business from those of the competition. Not only, as aforementioned, will other companies not be able to use your registered TM in the course of their business in order to take unfair advantage, or to cause detriment to the distinctiveness of your brand, but if they want to benefit from your brand’s reputation, they will have to get your permission to use your TM by way of licensing or purchasing.

In other words, your TM will be a guarantee for both your customers and your business while increasing the company’s assets. It is your TM that differentiates the goods and services of your business from those of your competitors, helping the general public to recognise your brand. In fact, TM’s also act as an indicator in terms of quality, meaning that customers will buy your products, or use your services because they expect a certain standard from them.

If you are not convinced, think about this situation: When you go to a supermarket, you will find lots of “Cola” imitations, but you will probably, eventually, always go for the original Coca Cola® because of the quality you expect from the brand. Now, if you think you know the estimated value of the Coca Cola brand alone, that’s the brand and only the brand, you are probably wrong! The brand alone accounts for 75% of the whole of Coca Cola®’s value, which amounts to £60 billion.

Nonetheless, it must be remembered that Coca Cola® is considered to be a well known TM, and because of this, it is awarded special protection. In fact, notwithstanding whether the TM has been registered or not, or whether the owner of the TM carries the business or has any goodwill in the UK, a well-known TM proprietor can claim infringement against any business or company that uses the mark.

It is a common rule that all TM’s benefit from protection only in the country in which they are registered. So, for example, if you file an application in the UK, your TM will only afford protection in the UK. This is often referred to as the “territorial nature of TM.”Even so, because of their notoriety among the general public, well-known TM’s, transcend this law.

In conclusion, it is easy to understand that TM’s, and in general IP, are important for your business from both a legal and an economic point of view. Yet only a few companies protect themselves and are, more often than not, easy victims of bigger businesses. Most companies struggle to understand the importance of TM’s, or simply do not have the patience or time to develop an effective, long-term strategy for their TM and their IP rights.

At Fractional IP we understand that, and we help you to grow your start-up by developing a powerful and efficacious IP strategy — tailored for your business!

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