WHY DO YOU NEED TO REGISTER A TRADE MARK?

Recognition of a Trade Mark or a Brand is created through consistent quality products/services, advertising/marketing campaigns, brand recall, geographic presence, sales team, positioning, among many other parameters. However, with growing competition, every market player is required to have an edge over the other in order to win the race of profitability, along with gaining trust of the consumer as well as to build a strong reputation and goodwill for its goods/services so as to maintain its position in the Market. Registration of a Trade Mark gives one such exclusive competitive advantage, wherein, for instance, Trade Marks such as the ‘arches’ of  or the ‘swoosh’ of  creates an impact on the consumer’s mind, and easily connects with the masses of consumers worldwide. However, there are lot of chances that these Trade Marks are infringed, duplicated or counterfeited, hampering the business. In order to prevent these incidents, Registration of Trade Marks provides a strong protection against such incidents.  There are other various reasons for registering Trade Mark that can be categorised as:

LEGAL IMPORTANCE

Trade Mark helps in identifying the source of origin of goods/ services, the very first step taken by the company is to have a distinctive Trade Mark that becomes a crucial factor for business identity. With successful Trade Mark and brand comes a greater risk or misuse of mark or stealing of mark by the competitors.

Registering a Trade Mark can help avoid various sorts of legal proceedings that may otherwise run the business into loss and create undesired ownership/reputation issues/loss. In the event of unfair competition, counterfeit, or fraud; owner of a Trade Mark (TM) may rightfully seek the doors of court for injunction[1], wherein adopting or commercially exploiting a pre-existing Trade Mark may also lead to trial and strong damages. This statutory right extends to 10 years and can be re-registered, wherein one can be a perpetual owner of his/her Trade Mark, 1999[2] and keep on taking advantages provided by the registered Trade Mark.

 

SIGNIFICANCE OF REGISTERED TRADE MARK AMONG CONSUMERS

A registered Trademark i.e.  associates a comprehensive value to the goods and services of the businesses that are registered by the Trade Mark registry, assuring the quality of product or services. This influences the consumer’s purchasing decisions.[3] Registration of a Trade Mark affirms the reliability of the product/services, which is later converted to consumer loyalty. For example, a consumer won’t think twice before choosing an  product/services over XYZ product due to its assurance of good quality, goodwill and brand value that ITC has built over the years through various actions/initiatives, one of which being – registration and enforcement of their Trade Mark. We can say that Registration of Trade Mark makes the business unique and distinguishing from others, which attracts customer’s attention and therefore prevents any sort of market confusion

COMMERCIAL ASPECT

Registration of Trade Mark by the Trade Mark Office compliments a business strategy by giving it a statutory right to use its mark (business name/logo) exclusively and gives right to restrain others from using the same or similar mark.[4] Hence, bare minimum due diligence is a prerequisite before filing a trademark application in the Trade Mark Office. Moreover, this provision of exclusive right not only gives the right to the owner to sue the infringers but also builds its face value, brand value and reputation. A registered Trade Mark has the biggest role to play in commercial aspect of the business.

An extensive use and success of the goods/services through word of mouth, consumer’s acceptance, Internet or social media etc, which helps in attracting more consumers, leads to making of a trade Mark in to a brand identity of the business, which becomes very important to be protected from its misuse. In case these brands are infringed, the business can be expected to incur a huge amount of loss on account of creation of confusion in the market place deviating a large section of consumers, which in turn damages the brand, reputation and business as a whole. Also, a Registered Trade Mark can attain so much value apart from the core business that it paves way for brand expansion. For example, AMUL-THE TASTE OF INDIA,  has been the most successful brand with respect to dairy products, its promotion and quality of goods have been up to the mark since its inception i.e. 1965. Thus, its registration in the Trade Mark Office and wide promotion through its Website www.amul.com has given it a higher brand value, reputation as well greater protection against the infringer. The presence of awareness of the brand all over the world has made it a ‘well – Known mark’[5] and has helped it to achieve a Trans-border Reputation[6], thereby giving it a protection all over the world.

Further, Trademarks are an important part of the merger and acquisition process, and can contribute to the overall value of a business. Trademark validation not only provides both sides of the deal with the necessary transparency to assess this value, but also prevents the occurrence of any unexpected issues after the merger or acquisition has been completed.

Because of the above reasons, the potential investors will always be interested in a business that has a registered Trade Mark for its goods/services. A trademark only holds value if it has been properly registered and maintained. Therefore, a registered Trade Mark not only affirms the security, but also aids clarity in any merger or franchising of the business, positively influencing its perceived value.

 

CONCLUSION

A brand/trademark is built based on a good quality of service or product, and through accessibility of the service/product to consumers across globe, which has become easier over the years through Internet. This brand value or value of the trade mark, opens up a window for a business to enter into a different line of goods/products. What can be a more substantial example for this than the Trade Mark ‘Kolkata Knight Riders’, which began as an IPL team for cricket that shot to fame so much so that it became a brand in itself attaining a value of about $ 3.8 Billion. This large recognition and huge brand value paved way for the owner to enter into different line of business such as sale of KKR sports jerseys. Moreover, anyone who intends to sell the same in the name of KKR, has to seek permission from the owner.

Now a days, building a brand is easier, but maintaining the brand from external interference (counterfeiters/infringers) is a bigger problem. This external interference not only infringes the product and makes the company suffer huge loss, but also leads to lower the reputation of the company, thereby having a negative impact on the reliability and faith of consumers for the goods/services of a product.

Registered trademarks are one of the few assets of a business that can provide you with a long-term competitive advantage through protection, especially in today’s highly competitive and brand-driven marketplace.

Therefore, to summarize, a Trade Mark plays a vital role preventing unfair competition and confusion in the market, a strong marketing strategy and in identifying the source of the product/services. A registered Trade Mark, thus increases reliability of a business.

REFERENCE:

  1. http://www.lgtrademark.com/wpcontent/themes/nextclient/media/Reasons_Why_Trademarks_Are_Important_to_Your_Business.pdf
  2. http://www.trademarkeagle.co.uk/why-register-a-trademark
  3. https://www.wardtrademarks.com/why-you-should-register-your-trade-mark/

 

[1] Hearst Corporation Vs Dalal Street Communication Ltd., 1996 PTR 1 (Cal)

[2] Section 25(1) of The Trade Mark Act,1999.

[3] Qualitex Co. v. Jacobson Products Co, 514 U.S. 159 (1995).

[4] Section 29 of The Trade Mark Act, 1999;

[5] OA/56/2011/TM/KOL

[6] Whirlpool &Anr vs. N.R. Dongre, (1996) PTC 415 (Del).

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