When to register a business trade mark
Trade mark registration is not always top of the to-do list for new businesses – or established ones, for that matter, says LCN Legal partner Paul Sutton.
Understandably, the initial focus is often on securing a revenue stream, and making sure that you can deliver on your promises to clients or customers.
But the more value you have created, the more you need to invest in protecting it. This is important not only for the continuity of the business, but also to give confidence to future partners, investors or buyers of your business. This applies as much to professional firms as it does to other businesses.
So at what point does it make sense to go ahead and spend the money on a trade mark application?
Key questions to ask yourself
From a commercial perspective, there are two key questions here that you should ask yourself:
1. How damaging would be it if someone else forced you to stop using your business name or product name?
2. How damaging would it be if someone else used your business name or product name, or something similar?
Being forced to use another name or brand
The scenario in question one could arise, for example, if another business has already registered a similar trade mark for the same or similar goods and services in a territory in which you operate. That other business may claim that the use of your business or product name infringes their trade mark, and insist that you stop. They may also claim damages or the profits you have made as a result of the infringement.
For a complete start-up, this may not be a disaster. It may be relatively easy for you to re-brand and start afresh, keeping the know-how, contacts and business model you have developed. The owner of the existing trade mark may not bother to actually sue you. But the more time and money you invest in promoting your brand – for example, through social media – the more you would have to lose if you were forced to go back to the drawing board.
Stopping other businesses trading on your reputation
Similarly, the scenario in question two may not be much of a concern for early-stage start-ups. Until you’ve proved that your business model works, you may not be worried about stopping other people using your name or something similar. But as your success builds, you will also want to defend what you have created.
It’s not impossible to protect your brand if you don’t have a registered trade mark. It’s just a lot, lot more expensive. In the UK, in order to succeed in a court case to stop someone else trading off your reputation in that situation, you would have to prove that:
- your brand has an established reputation or goodwill (this may involve actually carrying out surveys of members of the public)
- the third party’s actions amount to a misrepresentation which causes the public to confuse what the third party is supplying with your goods or services
- there has been a loss or diversion of trade, or a damage to your goodwill
This is all expensive and messy, with no guarantee of success. Far simpler to enforce a registered trade mark – very often one letter from a lawyer is enough, pointing out that you have a registered mark, and that the other person is using a similar or identical mark for similar or identical goods or services.
1. The first – and the easiest – thing to do is to check what registered and unregistered trade marks are in use, before you choose your own. Ideally, this means asking a lawyer or trade mark agent to carry out a search for you, based on what trade marks and logos you want to use, what goods and services your business will offer, and which countries you will operate in. At the very least, you should search online using the usual search engines, and also check the database of the Intellectual Property Office
2. If you decide to ask a lawyer or trade mark agent to check for other trade marks, you should also ask him or her to give a view as to whether your proposed name or logo is likely to be registrable in the future. For example, trade marks cannot generally be registered if they describe the goods or services in question, or if they describe characteristic of them
3. Even if you’ve been trading for some time, you should still do this. The earlier you deal with these two aspects, the better. It can save you wasting huge amounts of time and money later
4. Registering domain names is cheaper than registering trade marks. So it makes sense to register yours as soon as possible, and consider registering related domain names at the same time. By contrast, registering a lot of different companies with Companies House in an attempt to protect your names doesn’t significantly improve your legal position and is usually not worth the money.
5. When the business is more established and the cost/benefit analysis is right for you, you can invest the money in registering your own mark or logo. Once registered, it is far less likely that a third party could successfully stop you using your trade mark, and far easier for you to prevent infringements. The cost will depend on how many variations of your name or logo you want to protect, how many different types of goods and services you want to cover, and how many countries you want protection in
Paul Sutton is a partner at LCN Legal, a firm which specialises in group reorganisations, corporate simplification and intercompany agreements for transfer pricing, among other services.