Every day entrepreneurs ask us why trademarks are important for their business. Here we put together a helpful list with the benefits a trademark provides. Whether you own a business or you are on your way to start one, these 5 points will be a valuable source of information to better understand why trademarks are essentials for your company's growth. We believe that at the end you will be able to take your decision without hesitation. So, let’s get started:
1. Trademarks are assets that can be monetized
Your registered trademark may become one of the most valuable asset your company has. It can worth a fortune just like famous trademarks such as Lego, Toyota, Apple, etc. Yes, those are trademarks, not only brands. It is important to understand that there is a difference between trademark and brand. The key to remember is that not all brands are trademarks, but ALL TRADEMARKS ARE BRANDS. The trademark is the asset because it possesses legal protection. Once your brand becomes a registered trademark it may be licensed, merchandised and/or sold separately from your business. Thus, you can diversify your product portfolio or enter different markets.
For example:
Уou can grant a license to another entrepreneur to use your trademark in his/her own products or services. Else you can use someone else’s trademark in your business plan. In this way you can enter a new product market without any additional costs from your side. You can attract new customers loyal to the brand you received license to use. These ways increase your revenue streams and profits. How does this really work? Let’s look at the Lego company. Lego uses both methods to become the leading company in toy manufacturing. On one hand, Lego receives rights under licensing agreements to use other company’s trademarks in its product lines such as Star Wars, Harry Potter, Disney’s various trademarks, etc. On the other, Lego is licensing its own trademarks to other companies like Lego’s relatively new trademark LEGO Wear. LEGO Wear is licensed to cloth manufacturing companies. By doing this Lego is entering totally new and different markets of clothing, footwear and headwear without the necessity to organise a clothing production facility, shops, logistics etc. What Lego does is simply to provide the intangible asset in the form of its registered trademark and receive revenues from its use without further production costs.
Еndless possibilities:
There are many and different ways to merchandise your trademark. If you are seeking for rapid expansion of your business you might consider franchising your trademark. Organising franchise branches in your country of operation or abroad just like Domino’s, Subway, Hertz, Ace Hardware etc. If you want to combine the market strength and raise brand awareness a trademark co-branding initiative is a solution.Even more, you may use your registered trademark as collateral security in obtaining debt financing just like mortgaging your home. Registered trademark is a must if you want to secure venture financing for your business.
You can Book an online consultation with a trademark attorney for advice on which ways are the best fitters according to your business plan.
2. Trademarks capture consumer's attention and distinguish you from competitors
Consumers are exposed to many businesses providing same or equal products and services like yours. Think about yourself as a consumer – why do you choose one product or service over the others? Isn’t it because you know their trademark represents a certain level of quality that is just right for you? Well, your registered trademark will do just that - inform your consumers about a) where the product or service comes from (that they are yours and not others) and b) what the level of their quality is.
Also your trademark is a powerful tool to capture the consumer’s attention and make your products or services stand out. Let’s say you produce and sell bio, eco-friendly, organic, super cool products. You want to communicate this in your trademark and to indicate to your customers the type of your products. But when you make a search (and this is a must if you want to register your trademark) you will find out there are tens of thousands of registered trademarks containing the element Bio, eco friendly, organic, super cool in them. What to do? You add a unique element to the design of your trademark that is going to make your trademark exceptional and thus helps consumers easily identify it among other marks, providing similar products or services.
Book an online consultation with a trademark attorney for advice on your trademark design.
3. Trademarks provide you with freedom to operate and are protected by law
People think very much alike. It is very difficult to imagine a unique name, brand, product or service. Now that the information flies across countries so fast, with a little research you will find that the sign you want to use for the very same products or services is most probably existing. And if you have the amazing chance to be the first one if you do not register your sign as a trademark someone else will do it. If somebody registers even a similar sign it may become very problematic and costly for you to enter that market with the same products or services under the sign you initially wanted and have.
Registering your trademark gives you exclusive rights to operate and market under said trademark and the ability to prevent registration of identical or similar signs. It is the most effective tool against unfair competition. Let’s say you are a software developer providing online SaaS (software as a service) services to customers and you designed your dream trademark that is easily recognized online. You launched your online store and sells start to grow. Then suddenly they drop and after you do a search you see that a competitor is using an identical or similar sign like yours in its online services. Because the competitor is cash loaded its online marketing is beating yours and customers, thinking your competitor is selling your services, are going to its online store. But because you have registered your trademark you have lots of tools to combat this. Your registered trademark provides you with the right to legal action against anyone that infringes upon it for example by stopping the use of identical or similar signs like yours and sue them to pay you damages.
Book an online consultation with a trademark attorney and learn more how to protect your trademark.
4. Build brand image and reputation:
Your registered trademark allows consumers to motivate their purchasing decision on what they have heard, read or experienced themselves regarding the use of your products or services. Building a brand image with registered trademark will enable you to project your promises you deliver to your customers like quality, service, reliability and trustworthiness and be protected at the same time. Your brand image can be of great help in attracting and retaining employees. Just like customers, employees tend to accept job offers and are more likely to stay in companies with popular and trustworthy brands with a reputation of excellence and brand vision that corresponds to their personal values.
5. Enduring in time
The benefits of registered trademark can last forever, if you continue to use your trademark in commerce and maintain its registration.
Important things to remember
1. The trademark has to be renewed: You can achieve lifelong protection only if you do not forget to renew your registration every 10 years.
2. Efforts to protect your rights:The trademark is an intellectual property and as all properties you are the one in charge to protect it. If you don’t want a competitor to register an identical or similar trademark like yours you have to check for new fillings for registration of trademarks at the office where you have registered your trademark. Once noticing that a filing for registration of a new trademark similar or identical to yours for the same products or services is filed you must file an opposition. If you miss the deadline for opposition, the competitor will register a similar or identical trademark. If you notice that someone is infringing on your trademark you must take the appropriate measures.
3. Classes cannot be altered: The classes you mentioned in the application cannot be changed or added once it is filed with the registrar. Be careful and think wisely at the beginning of your registration, coz., if you want to expand your registered trademark for a new product or service you haven’t applied for at the beginning you have to register your trademark again for the new services. Those are additional costs that can be prevented.
4. Investment: Registering a trademark, renewing a registration of your trademark, filing opposition against registration of identical or similar mark, protecting your marks cost both administrative and/or lawyer’s fees. Those are fixed expenditures, and you can plan them way ahead when you are working on your business and financial plan. Taking care of your intellectual property is an investment.
We are sure that the list above has helped you and you will go for it and regitser your sign as trademark. Check our block post on “2 ways how to register an EU trademark”. for information how to do it the right way.
Last but not least, before you go don’t forget to download this free graphic as an inspiration when working on your trademark design.
Great
Great article. Keep the good job, guys!