Why owning your Trademark is an imperative for survival
Earlier this year the six members of the Gulf Cooperation Council (GCC) agreed to implement a unified trademark law across the subregion. While implementation requires legal approval within each sovereign state, this next step has signalled greater importance and regional-wide commitment towards international trademark and Intellectual Property legislation and protection.
Why is this important?
The importance of marking our property dates back thousands of years, where pictures and motifs were placed on objects and domains as a simple sign of ownership and existence. While intrinsic to why companies and organisations protect their trademarks today, global communication, marketing and advertising have evolved a need for owning a mark — from once serving in the interest of self-expression to quickly become a valued and protected business asset.
Simply put, a trademark is a distinctive word, phrase, logo, colour or typeface, used by an individual or entity to identify an offering. Trademarks are inextricably linked to the idea of delivering value and in today’s brand-orientated world — where competing for our attention span has become a commodity in itself — trademarks not only serve to enhance the value of intangible assets but to substantially increase the financial value of a business.
However, beyond the economics, a trademark can also help to facilitate market competition, establish stakeholder loyalty, as well as influence our perceptions of quality and integrity — where communicating trademark intention or ownership can be applied using one or two designations. The symbol ‘TM’, typically located at the top or bottom right-hand corner of a brandmark, is used to communicate that approval of a trademark application is still pending. Alternatively, you may see the ‘®’ symbol. This signals that a name or brandmark is already officially registered.
Many organisations and brands experience difficulty in settling on a name. This is due to subjective criteria, lack of coherent planning, and a belief that there is a ‘right’ name. To overcome these barriers, there should be a clear and structured strategy for naming, this includes having an agreed set of objective success criteria against which names can be evaluated.
It is also important to note the difference between a trademark and a trade-name — a common pitfall many organisations mistake as being one and the same thing. Problems arise when a trade-name is only acquired to establish a physical business presence; whereas a trademark can be registered by an owner, without the need of a physical address nor presence in a particular country. From a naming perspective failure to crosscheck the availability of both can result in two very different businesses trading as the same name. This undoubtedly causes confusion, dilution and susceptibility to claims of infringement, and a potentially damaged reputation. Coupled with the perpetual expansion of technology, domain name utility and jurisdiction, the naming process can be incredibly complicated.
To overcome these barriers, there should be a clear and structured strategy for naming, this includes having an agreed set of objective success criteria against which names can be evaluated.
While traditional trademarks may be more familiar and comprehensible, it is the non-conventional visual trademarks (e.g. a colour, shape, moving image, or hologram), or non-visible more experiential signals (e.g. a sound, scent, taste, texture, or gesture), which can be difficult to navigate in terms of eligibility, registration and protection. Notable examples, affirming the inter-relationship between brand asset management and legal trademark registration, can be found in US logistics company UPS, and Swiss food and beverage giant Nestlé.
Since UPS was established in 1916, the colour ‘Pullman Brown’ has been consistently featured on envelopes, delivery trucks and staff uniforms. Through effective brand management, not only has the colour become synonymous with our understanding of UPS’s role and purpose, but also it has since been protected against international trademark infringement. Contrary to this, in 2010 Nestlé applied to register the shape of its famed four-finger Kit-Kat bar. Their application immediately provoked an objection from British confectionary competitor Cadbury, due to fear of monopoly. And, while the Swiss company’s initial application was successful, Cadbury’s legal challenge resulted in an incredibly complex case — ending recently with the High Court and Court of Justice of the European Union rejecting Nestlé’s application, despite Kit-Kat first appearing on shelves in 1935.
Whether fearful of unregistered copycats or brand equity thieves, good governance begins with early trademark registration. Not only advantageous to large multinational corporations, understanding and advocating the importance of protecting IP is an important prerequisite to owning a business or promoting a cause. Brand protection is not only focused towards substantiating your position within the marketplace, but it also works in the interest of your future business strategy. In the absence of legal teams, large budgets, and structured governance, SMEs and micro-SMEs often find themselves falling victim to copyright contravention and sudden claims of trademark infringement.
Whether registering a trademark or a trade-name, maintaining distinctiveness and exclusivity is key towards taking ownership of place and purpose. Too, regardless of industry sector, a clear strategy and positioning, supported by a suite of registrable trademarks, has become a commercial imperative. By appreciating the holistic nature of brand — understanding its role to not just withstanding competitive threat, but also in helping to reduce business susceptibility to wider economic and technological forces — will inevitably lead your organisation towards achieving shared, measurable and sustainable value.