A significant number of entrepreneurs and business owners are ignorant when it comes to trademark registration and brand protection. One of the most common mistakes is the belief that a company registration is all that is required and that it (i.e. the company registration) protects their business name and/or product name. Unfortunately, this is incorrect. A company registration purely sets up a separate legal entity and does not give the business owner any right to use or prevent others from using the business name, trading name or trademark. Many entrepreneurs only find this out the hard way. Ignorance is not bliss when it comes to brand protection and trademark registration.
Another common mistake is to delay registering a trademark until you have commenced trading and established the brand and business. This is extremely risky and could well come back to haunt you at some point in the future.
The following are actual examples which demonstrate the risks you are taking and the consequences you face by not applying for and securing a registered trademark for your business:
- Claire (not her real name of course) started a business in October 2012. She made and supplied fruit and vegetable juice for health and detox purposes. She did not apply for a trademark but decided to wait and see how the business fared. Fast forward 7 months – her product was extremely successful and was being used and endorsed by various celebrities. It now dawned on her that she needed to register the brand name as a trademark. Preliminary searches established that a third party registered a highly similar trademark in November 2012, which was only one month after she first commenced trading. She could not rely on common law rights as she was not able to prove a reputation as of November 2012 (which is when the third party applied for the trademark). Furthermore, there was no evidence that the third party was aware of her product in any way or had filed his application in bad faith. The consequences for Claire are potentially disastrous. Her continued use of the trademark could be regarded as trademark infringement and she is now faced with the possibility of having to rebrand at significant expense. This could so easily have been avoided if she had invested a few hundred £ at the outset and registered the trademark.
- Paul founded an energy drink company. He registered the business name at Companies House but did not register a trademark. A few months down the line he had a major disagreement with a third party who had been contracted to manufacture the drinks. The third party manufacturer ended up applying for the trademark and securing trademark registrations in dozens of countries around the world. The third party manufacturer essentially stole Paul’s trademark. Paul did have a remedy as it was clear that the third party manufacturer had acted in bad faith in registering the trademark. However, Paul was not in a financial position to litigate and file trademark revocation actions in numerous different countries. He therefore forfeited his trademark.
The above are just two examples of problems that could so easily have been avoided had trademark registration been secured at the outset. My advice to anybody starting out in business is to register a trademark before you do anything else. Decide on a name, make sure it is available for registration and then register it. Failure to do so will expose you to unnecessary risk and for the sake of a few hundred Pounds (which is the cost of registering a trademark) the risk is not worth taking.