The What, Why, and How of Trade Marks

Kiev, Ukraine - February 21, 2012: A logotype collection of well-known world brand's printed on paper. Include Google, Mc'Donald's, Nike, Coca-Cola, Facebook, Apple, Yahoo, Nikon, YouTube, Adidas,, Unilever, Twitter, Mastercard, Samsung, Canon and Starbuck's logos.

Creating a new brand for a business or product is not easy.  Finding one that resonates with customers and is also strongly protectable is even harder – especially in today’s digital economy where many businesses and brands operate across borders.

Today, a brand can be one of a company’s most valuable assets, yet many companies do not understand trade mark law or trade mark strategy and how these interact with brand, market, and product strategy.

Unfortunately, about half the companies we see suffer from major brand risks or face brand infringement issues.  While many companies invest heavily in developing their brand, the same can’t be said of investing in due diligence in relation to their brand, which often leaves them with inadequate brand protection or, in some cases, not even owning or controlling the full rights to their brand.

Do Your Homework

Recently we worked with three clients where we had to deliver the difficult advice that they needed to change their brand because they were never going to be able to stop others from using it. They had already started investing significantly in developing their brands, but unfortunately their brands weren’t distinctive, meaning that they would have been extremely difficult both to protect through registration and to stop competitors from using them to describe their own products.

While both these companies had gone through a considerable process to develop their brands, part of the reason why they ended up with a weak option was because they didn’t fully understand what makes a strong, protectable brand.

Over time, a brand often builds to become one of a company’s highest value assets. Companies invest heavily in marketing and work hard at building reputations for providing great and consistent products and services so that value accretes into the brand. However, if a company can’t ultimately distinguish its brand from others or, importantly, stop competitors from using either its exact brand or something similar, then it becomes extremely difficult to grow its value.

What is a Trade Mark?

One of the most common ways to represent and provide legal recourse if a brand is infringed, is by obtaining a registered trade mark. Trade marks are badges of origin for a company’s goods or services and can include words, logos, 3D shapes, colours, sounds, smells – or a combination of these.  They are used to let consumers know where the product or service they are buying comes from – to distinguish Company A’s product from Company B.

While many companies understand that a registered trade mark will help mitigate risk around misuse of a brand or brand infringement, they don’t necessarily understand exactly how a trade mark works. If you simplify a trade mark down to the fact that its core purpose is to distinguish between two company’s products or services, it makes sense that a trade mark that describes a product or service won’t work properly.  Trade mark law allows others to use ordinary terms to describe their products without infringing any trade mark.

Descriptive Brands

Ultimately, trade marks don’t work if they are too generic or too descriptive – they just won’t hold up in court.

Imagine you’re about to launch a new organic line of dog food.  You think, “how am I going to let my customers know that they are not buying just any dog food, but organic dog food?  I know, I’ll call it ‘Organic Food for Dogs’”.  Unfortunately, this is really only descriptive of the dog food.  It doesn’t differentiate it from other organic dog food and uses common terms to describe the product. Importantly, because it is descriptive, other companies will be able to use it to describe their organic dog food and you won’t be able to stop them.

Distinctive Trade Marks

Instead, when developing a brand it is critical to develop a trade mark that sets your product or service apart from your competitors.

It can be entirely made up (like “Xerox”).  It can be an everyday or known word out of context, but which still matches the nature or spirit of the product (like “Puma” for shoes). Or, it can be a combination of abbreviations, (like “Conwest” for a construction company on the west coast), provided the combination is not commonly used for those goods or services.

It just needs to be capable of distinguishing your goods or services from other traders and importantly, not already be in use!


Recommended Reads

Protecting patents by ‘defanging the snake’

Patents are great, but they’re just bits of paper. Like any rule or regulation, a…

Can Zespri’s intangible assets save its Kiwifruit from illicit growers?

In 1904, Mary Fraser packed a few cuttings of the Chinese gooseberry into her baggage…

How Sears broke its OODA loop and missed the internet

“Keep your eyes on the prize” is a cliche because it works. Focusing on a…

Bitcoin and the power of perceived value

People have their ideas about Bitcoin. For the believers, it’s the long-awaited alternative to the…

Unlocking value with the Mary Poppins technique

The 1964 film Mary Poppins had a great scene about hidden value. In the scene,…

Free 1hr Consultation

Intangible assets are a company’s greatest source of hidden value and hidden risk. Make the valuable visible in your organisation.

Sign-up for a free 1-hour consultation today.

Subscribe to Newsletter