For all growth businesses, including start-ups, protecting a business name or logo should not be overlooked. The owner of a registered trademark will have a monopoly right to use their trademark in their chosen class of goods or services. The owner will also have the tools to prevent competitors infringing their trademark and benefitting from their hard-earned reputation.
For most businesses, the trading name and brand logo are likely to be the focus of any registration applications. These are the words and images that are projected to the public to distinguish the goods and services provided (from those of its competitors) and to generate goodwill and brand recognition.
By registering a business name or logo the owner is able to put third parties on notice that they own a registered trademark. The owner of a UK trademark has the right to take action against third party competitors that attempt to register a confusingly similar trademark or are using a similar mark in connection with their business. This preventative tool minimises the risk of a third party diluting a brand.
A registered trademark is an intellectual property right that can be exploited by the owner. Where a business owner plans to franchise a business, they can licence the use of the trademark to franchisees/licensees in consideration for the licence fee.
A further example is on a business sale. In negotiations for a business sale, a potential buyer will require assurances from the seller that the goodwill of the business is protected and that the buyer will acquire the exclusive right to the business name and logo. If a seller cannot give such assurances this may influence the amount a buyer is prepared to pay for the business.
A further consideration is image. Owners of registered trademarks can apply the ® symbol to their registered trademark. The proof of registration may be a marketing tool to add professionalism for a target audience.
Avoiding Trademark Infringement
If a business commences marketing and promoting their brand in breach of a third party’s registered trademark it is likely to lead to costly and time-consuming problems. Such problems could derail the product or service development before it gets off the ground. In the worst-case scenario, the infringing business could be subject to injunction proceedings, made to completely rebrand their business name and/or logo, deliver up offending products and pay damages or account of profits.
The Registration Process
There are certain statutory grounds that could prevent a trademark application succeeding to registration. A business name should not simply describe the goods and services provided and should not be generic or commonplace.
Businesses considering trademark protection should conduct a search of the trademark registries to ensure that the mark applied for is not too similar to existing registered trademarks. An application that is too similar to an existing trademark may be contested by a registered trademark owner.
It is also important to ensure that the trademark applied for will cover the countries it operates in and to cover all of the classes of goods or services it provides (there are 45 classes of use).
If a trademark application is not sought, a business can still rely on its unregistered rights in goodwill. The process of enforcing unregistered rights through an action in ‘passing off’ requires a different test to trademark infringement proceedings. For example, in passing off a claimant will need to prove evidence of its goodwill in the mark and the damage suffered or the likelihood of such damage.
For advice on trademarks and other intellectual property rights Grant can be contacted by email at GrantMcCall@amdsolicitors.com or by calling 0117 973 989 to speak to Grant or one of AMD’s team of specialist commercial lawyers in Bristol.