Potential (in fact possible) risks for a
business who disregards trademarks
Times are... the way they are.
Looking around, one may easily notice a lot of effort, of concern, and diligence,
but not too much wealth – excluding well known & very publicly debated
exceptions – not enough welfare which logically should follow what was said
earlier, i.e. effort, concern, diligence.
During such times, any
businessman watchfully checks spending and, even more watchfully, checks investments.
Consequently, filing & registering a trademark is, unfortunately, still
considered one of these risky „initiatives”. Some say it is just another
spending, but still do it, just because someone is “pushing” them. Others
consider this hardly as an investment, but they are not entirely convinced. And
finally we have those who know the power provided by a registered trademark on
any market and thus, follow in full confidence and responsibility this path.
Unfortunately, in too many
occasions, more often lately, owning a trademark was proved to be useful only as
a consequence of all kind of business conflicts. Conflicts generated as a
result of bad faith actions (mildly said) of individuals or even companies.
This topic is not a new one, and it was dissected long enough to not talk or
develop it further.
Let us go back to the source. I
mean that moment in time, when after countless doubts, unrest, and discussions
(sometimes with professionals, which is more un-restful and expensive), an idea
of business is born. This occurs only for the reason and in the name of profit,
which is good. And let’s not forget that any profit is foreseen to become the
result of the interaction between the new entrepreneur and one or more targeted
group of customers in a specific segment of the market.
These groups of customers have
also needs. They need to easily and constantly identify their new products/services
provider – we should call them goods/services – and in order to ensure this,
the entrepreneurs need at least a minimal tool, which is registering “The Company”
as a fulfillment of this first primary need.
And when this action is
completed by registering the company logo at the entitled authority in each
country, it gets even better.
From now on, we start spending bigger
money! A sum was already invested in starting-up the company, but the story
does not end here. Everything done to build-up a business translates into
money. Money is also needed to make potential clients aware of the new business.
To ensure quality and performance also needs spending/investing money.
It is just natural for anybody
to ask: can all this investments be somehow protected? And yes there is an
affirmative answer to this question: the trademark!
In fact, what is it all about?
Simplifying things (not too much
though) we could say that all starts by naming. As a child is given a name at his
birth, thus a business gets a name to be known by the customers, even if it is
just the name of registration as a company at a public authority. From the
moment of the official “baptism” all is done under this name, promotion is done
for this name to be known, and luckily, customers start looking for this same
name because they are happy with the quality/price ratio.
Under this name profit starts
growing and this is the exact moment when the name enters under the scrutiny of
other “entrepreneurs” – better said competitors, to stay ”politically correct”.
Why that? Obviously because the
hard job was already done! The customer/consumer knows the name already. They
got used with a high quality of the goods/services offered under this name. All
these “competitors” have to do is to place on the markets any quantity of goods/services
having this same name and the sales & profit will come automatically.
Now is the moment when trouble
starts for our “originating” company. Bluntly said, now start the loss. On the
market we see now not only our company’s goods/services, but also the ones of
the “competitors”, but all under the same name.
And things are just getting
worse!
The “competitor”, looking for quick
and fat profit at no expenses, launches on the market goods/services of a lower
quality, under the same name (of course). What is the result? The trust of the
customers is shaken and the overall sales rate for our legitimate company
decreases.
A minimal analysis of the roots
of this disaster leads to the obvious conclusion: all of it is due to the
abusive, fraudulent, bad faith usage of the initial name, launched officially
by our “original” company, but not properly protected. How can this
company stop this? They have to be able to legally forbid the “competitors” to
use their rightful name.
Can our company do that? All the
potential ownership rights related to owning the name are the key to these
problems.
We are still speaking of
problems because in this scenario, they are here, and they are many and serious!
Below are listed only a few, the most important:
· The name of the company is registered at the entitled
authority in each country. For the sake of clarity, here is an example: Our
company registered at that authority the commercial name: “The Example Company” together with a rather complex logo containing
the noun “Example” accompanied by
other graphical elements. Depending of national laws, in some countries there
can be constraints. In Romania for instance, according to the Law no. 26/1990 regarding
the Register of Commerce, art. 43, the use of the word “Example” in the name of our company was done similar to the wording
of the logo, but not identical. In the same time, the usage of the word
“Example” was done by the “competitors’ in a similar but not identical way. Under
these circumstances, which vary from country to country, but still have to be
analyzed, the so called exclusivity foreseen by the laws regarding commercial
name and logo might not be of much use.
·
Not much
help provides the hypothesis that our company - “The Example Company” – owns an internet domain, as “www.example.com”. This is not an
exclusive right which could allow forbidding the usage of the name “Example”.
·
And it
does not help at all, unfortunately, that the name “The Example Company” legitimately used by our company has a high
level of awareness for the customers/consumers situated, usually, in a limited
geographical/administrative territory. Because this awareness does not expand
at least at a national level in a given country.
The
only guaranteed result in this scenario are loses.
The scenario
above can be avoided only if the
name of our company - “Example” - is registered as a trademark! But timing
is again important.
The best time
to protect a trademark is “yesterday”, because today when I need to use it, it has
to be ready for that. A good time to do this would be before an intensive
promotion campaign of the goods/services provided by our company. This moment
is the most suitable because in many countries, at least in the EU, the
protection offered by Laws provides to the owners of registered trademarks the
exclusive right to use the trademark whilst the unauthorized use of the same
trademarks is considered fraud of counterfeiting. In Romania, this type of
fraud, according to the Law no. 84/1998, can be punished by penal fine or
prison from 3 month to 2 years.
Thus, by Law, a
trademark represents an industrial property
right which is in fact a tool, even a very effective weapon both for attack and
for defense.
It can be used
as an attack weapon because it represents an excellent marketing and
promotion tool for increasing the market where the company (or individual)
owning the trademark operates and as a defensive one because the
acquired rights allow the owner to legally forbid/block the usage of an
identical or similar trademark for identical goods and services or similar ones
on the same market we were discussing about.
Time for the
final and important conclusions:
· First of all, it has to be understood very
clearly that a registered trademark is for the owner, a solid guarantee of the
investments made for promoting goods and/or services and for continuously
increasing their quality.
· Secondly, one or more registered trademarks represent
also a guarantee of a certain degree of control of the said market, which is
not something to be treated lightly.
· Thirdly, but by no means lastly because the
advantages of owning one or more registered trademark are far more numerous,
this may led not only to a direct higher profit for a company or individual but
also to a better visibility and image in the markets, and to increase the
overall value of that business.
It is
important to learn that in these times, a business has to be sustained by a
solid portfolio of industrial property rights, and that the rights offered by
registered trademarks are probably the most important and fit for business of
them all. And mind yourself, I mean any kind of business.
I really wonder
if this situation is different somewhere?
I would like very much to know... from you!
