A trademark is the means by which a business makes itself visible in the marketplace. A trademark can be any distinctive (not solely descriptive) name or logo. The best trademarks are instantly recognizable and conjure up in the minds of existing or potential customers things like quality, dependability, or at the very least the source of the goods or services being bought.
A trademark is often defined as: “a word, name, symbol or device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others”. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms “trademark” and “mark” are commonly used to refer to both trademarks and service marks.
Trademarks provide their owners with the legal right to prevent others from using a confusingly similar mark. They cannot be used stop competitors from making the same goods or from selling the same goods or services under a clearly different mark.
Examples of well-known Trademarks are: Coca-Cola, Rolls-Royce, The Apple logo and the Nike “swoosh”.
Why register a Trademark?
Prudent business people register their trademarks with patent offices to gain an official record of their rights to a particular mark. A trademark registration also grants a statutory right, subject to certain conditions, to prevent others from using the trademark without the registered owner’s permission – i.e. to prevent infringement.
One of the principal aims of a business is to build up the reputation of its goods or services and by applying for and gaining a Registered Trademark accelerates the process as it serves notice on would-be copiers of the serious intent of a business to defend its position in the marketplace.
If a trademark is properly promoted and protected it can be a very valuable asset for any business and can in some circumstances be worth more than the bricks and mortar of a business.
Generally, registered trademarks are protected for specific classes of products and services for periods of 10 years, which are renewal indefinitely.
How valuable is a Trademark?
There is much talk today about “the shop front” and “the High Street”. These terms are used colloquially to refer to business visibility and to company profile. To provide some indication of the value of a trademark one needs to look no further than Coca-Cola. Coca-cola is immediately recognizable. It is an icon for capitalism and private enterprise – and it is the most valuable piece of intellectual property in the world today.
The president of Coca-Cola has even publicly remarked that if all of the company’s buildings, vehicles factories and equipment were destroyed Coca-Cola Inc would immerse from the ruins and rebuild itself provided that the trademark survived. The loss of the Coca-Cola mark however, would damage the company beyond repair.
It is estimated that Coca-Cola Inc has a stock value of about 160 billion dollars, with the value of the physical assets being put at around 20 billion dollars. The value remaining is therefore about 140 billion dollars. This is made up of its goodwill or the intangibles of the business. So, for a company like Coca Cola, the most valuable intangible that they have is the Coca Cola trademark, the Coca Cola brand. Even if the brand makes up only half of the intangibles of the business then the Brand alone is conservatively worth 70 billion dollars.
What is the Difference between a Business, Trade or Company name and a Trademark?
Business, Trade or Company names are names under which a trading entity conducts its business. They are usually used for governmental, company registration, taxation and financial reporting purposes. Invariably a company or business name will not contain a logo or other identifier.
Probably only about half of all company names are eligible for trademark Registration. In fact, many company names are confusingly similar or so descriptive that they cannot be trademarked. In other words they do not have the necessary “distinctiveness” to be used in the marketplace to distinguish one proprietors good or services from another.
A Company Name can be registered as a Trademark, but only if it is used as such, that is, used to identify wares or services To be registrable a trade mark must be:
- distinctive for the goods/services for which registration is sought, and
- not deceptive, or contrary to law or morality, and
- not identical or similar to any earlier marks for the same or similar goods/services.
It is important when starting a business to consider not only what the business is to be called and what name is to be used to attract customers but also whether or not the name will infringe another businesses Trademark.
Please also be aware that simply because you have a company name or a domain name does not automatically mean that the name will be accepted as a Trademark.
Can I get a world-wide Trademark registration?
The simple answer to this question is no. In general, you need to apply for a Trademark in distinct regions. However, with the advent of the Madrid Protocol on Trademarks it is now possible to apply for a large selection of countries with a single application.