Register A Trademark

Register a Trademark/Trade mark/ Trade Name – Facts All Entrepreneurs and Business Owners Need To Know.

Few entrepreneurs and small business owners are aware of the importance of registering their trademark (business/trade or product name etc), which could eventually become one of their most valuable assets. One of the main reasons for this is ignorance on their part with many believing that a company or domain name registration gives them the right to use the name and/or prevent others from using it. This ignorance or lack of knowledge of small business owners was confirmed in a recent survey (August 2005) conducted by the UK Patent and Trade Mark Office which revealed that 80% of small and medium sized enterprises have not registered the name of their business as a trademark. Company/domain name registrations give the owner absolutely no rights to a name. The best way to secure exclusive rights to a trade name is by registering it as a trademark. The benefits associated with registered trade mark are substantial – the most obvious being the exclusivity aspect and the right to prevent a third party from using an identical or confusingly similar name. However, there are also numerous commercial advantages associated with securing a trademark registration. Firstly, registered trademarks can be used as negotiating tools in business deals as they can greatly facilitate the negotiation of licenses, franchises and the transfer of ownership. Secondly registered trademarks are ‘quantifiable’ assets in their own right thereby commanding a presence in a company’s balance sheet. This in turn enhances the value of a business for potential investors, lenders, purchasers and public offerings. Thirdly a registered trademark can serve as security for financial transactions thereby giving the trademark proprietor more options and greater financial flexibility.

However, and more importantly, the commercial and financial consequences in failing to register a trade name as a trademark can be extremely damaging to a company. Here are merely a few possibilities:

1. Failure to obtain a trademark registration could severely hamper an owner’s ability to grow the business and expand into other regions. This is particularly important from a franchising or licensing perspective but is equally important in circumstances where a business expands into other regions or territories due to organic growth or acquisition.
2. Use of a name may end up infringing a third parties right which could mean litigation, re-branding or even withdrawal from the market. This can be an expensive exercise as it could mean the re-packaging goods, changing stationary and redesigning letterheads, websites etc. In fact any goodwill that you may have accumulated in the name through use etc would have to be forfeited, which could be very damaging;
3. Very little protection (and absolutely none if there is no reputation) is given to an unregistered mark as one has to rely on common law rights (as opposed to statutory rights) to prevent another entity trading under or using an identical or similar name. Even if there is a reputation the legal requirements are notoriously difficult and very expensive to prove. As a result few passing off actions are successfully instituted. The reality is that for most small to medium sized businesses there will be no protection.
4. If someone registers your name as a trademark (before you do) the worst case scenario is that the third party could prevent you using your name altogether (depending on the circumstances). They could certainly prevent you using it outside the area in which you have a reputation (e.g. if you trade in London you will not be able to trade in Manchester, for instance, under the same name (unless you are able to prove that your reputation extends to Manchester).
5. A trademark registration is an intangible asset that adds value to a business. Failure to register a trademark could have negative implications on the value of a business in the event of a business sale (unregistered marks are often "deal killers" when negotiating with third parties).

The above examples illustrate the commercial importance of registering a trademark. Failure to register a trade mark exposes a company to unnecessary risk and for the sake of a few hundred pounds (i.e. the cost of registration) it really is not worth it.

Most small to medium sized companies tend to be reactive when seeking trademark protection only taking action after problems have arisen. This is a dangerous strategy which can result in their trademark rights being severely curtailed (not to mention the significant and unnecessary legal costs that will be incurred). Be proactive – protect your trademark today! For advice on how to best protect your trademark call us for a free informal discussion or email us with your query.