Do you need to bother with trade marks?

Since writing my book, Legally Branded, a number of business owners have thanked me for making this fundamentally important subject of intellectual property (particularly trade marks) understandable.

Some entrepreneur friends have even  suggested I emphasise the risks, and danger of ignoring intellectual property advice.  However, I’ve always tried to steer clear of scare mongering as a tactic to raise the profile of intellectual property, preferring to work with those clients that “get” the importance of intellectual property.  Our clients are the ones that get it, even if they’re not in industries where IP is obviously critical to their success.  They value their IP from the moment they start their businesses as did our client Headspace, for example, who are doing great things to make meditation accessible.

I recently attended a meeting with a business owner whose mind was firmly made up that there was no point paying expensive lawyers to give advice on IP.  I had agreed to meet with him at the request of his marketing manager who understands the importance of IP and hoped that someone more aware of the ins and outs of IP may be able to persuade his boss.  However, this business owner’s views did not shift one bit as a result of our meeting mainly because he talked far more than he was willing to listen, and his mind was already made up.  So, I know better than to try to address those whose minds are already made up that they know all they need to know about IP.

This is for readers who are curious, or undecided

This post is for those who may be curious, or who are still on the fence about whether it’s worth bothering with trade marks.  While it’s never a good idea to generalise about who does or does not need IP, I will stick my neck out and say that if you’re a lifestyle business (by which I mean you’re aiming to earn a livelihood and are not trying to build a big business or one you can ultimately pass on or sell) you can ignore trade marks.  You’re unlikely to come to anyone’s attention, or pose a threat to existing trade mark owners such that they would want you to rebrand for infringing on their rights.  Even if someone did require you to rebrand, chances are it will just be an inconvenience to change your marketing materials and rename the business.  You won’t have a name that attracts business, so could rename the business without suffering a drop in activity.  Similarly, if you’re setting up a business and want to first see if it will take off, then you MAY, depending on your business idea, be able to use a temporary name, or take a chance with the name you want to use (provided you’re willing to change it if the advice is that you would do better to choose an alternative name), and see if you can get anything off the ground before worrying about trade marking.  But for everyone else, it would be really foolish not to get trade mark advice from a specialist lawyer on the name you’re using.

Trade marks may be revoked

Trade marks can be cancelled, so even if you’ve secured a trade mark registration it doesn’t mean you’re alright to use that mark.  That’s why it’s misguided to do your own registration work, just to save on legal fees.  You may end up getting a registration, but it may not be for a mark that is capable of generating brand value.  You may not have an adequate scope of coverage, so that although you’re registered, it may not protect you if someone were to challenge your rights.  For example, registering a logo with a totally descriptive name – that is, one that describes what the business does – is easy enough to secure.  However, it’s an extremely poor choice of branding.

The law protects businesses against various unfair competitive practices, and helps you fight off competitors who use similar marks to yours, but you have very limited recourse with a descriptive name.  Using a descriptive name or a name that is otherwise incapable of being owned by you as a trade mark, leaves you wide open.  You will lose business that may have been intended for you, and you will have a business that is far less valuable than it might have been had you selected a legally powerful name.  This is the reason you should always consult your own IP lawyer on any name your branding professionals help you to choose, unless they are willing to take responsibility for its legal effectiveness.

Keyword rich names probably best avoided 

Also, take a look at the blog I wrote about Google’s recent algorithm change, which makes it even more of a poor decision to use descriptive names now online.  The writing is on the wall, so I would avoid choosing keyword rich names too when branding your business online.  The slides from my talk at Make It Big in 2013 also discuss descriptive names more.

Get legal advice

Even though you get some protection in this country just by using a name, don’t let that lull you into a false sense of security.  For example, if someone registers a Community Trade Mark they can stop you using a name you’ve been using, or limit you to using it only in a certain geographical area.  Why court the vagaries of litigation with all the cost implications when you can secure your rights in a name you’re getting recognition with, by paying ten times less?

Trade marks and legal advice should not be dismissed as too expensive to bother with for anyone who has a viable business.  They are an investment, and are the foundation for licensing and other ways of monetising your products and services.  In particular, don’t wait till you have reached certain turnover targets, because trade marks are fundamentally relevant to any business that aspires to be more than a lifestyle business.  Your business name is what the law protects when competitors behave unfairly.  So, trade marking is good business practice and isn’t just about whether you intend to become a brand, or think that if you sold your company whoever bought it would want to use your brand name.

Misunderstanding IP

There is a lot of misunderstanding about the relevance of IP, and huge generalisations are made about its costs.  But given that there are many different IP rights, of which trade marks are just one type, it’s foolish to dismiss them all as too expensive.  Knowing how to implement procedures to protect just one of these rights may be the critical element to your business success after all.

I think the problem is down to the complexity of IP law.  We are still in a transitional period between an industrial economy and a knowledge economy.   Consequently knowing how to deal with the physical things, the tangibles comes easy while intangibles that you can’t feel or touch, are less well understood. Intangibles are our knowledge, our brands, our digital content, and more.  By their very nature, they are easy to lose. Being transient, and non-physical, their legal significance can sometimes be overlooked or misunderstood.

Scrabulous and other high profile cases

The fact is that it can be difficult for lawyers to point out the benefits of IP except by pointing to situations where there have been well known incidents, such as with Scrabulous, which I discussed in a post recently.  Those of us IP lawyers who prefer to focus on the positives, won’t therefore want to keep pointing out the dangers, but I have outlined a number of scenarios in my book Legally Branded, which should help you better understand the risks.  Don’t assume that just because big businesses like Apple resolve their IP issues, that you will do so too.  People should know that for smaller businesses, the scenarios they hear about in the news about the Googles, Microsofts, Apples of this world would put them out of business because they would not have the resources to get themselves out of trouble.

So the moral is if you are a small business without access to huge sums of money to litigate your way out of  trouble then you absolutely need to make sure you avoid the problem in the first place by getting professional advice to register your trade mark.

Also, if you’re going to ignore IP protection, you need to know what you’re doing.  It could in some cases be rather like deciding not to bother with the foundations of a house you’re building.  In television programs like Grand Designs, the participants who overspend may end up not having enough money to do all the fine design details they had wanted.  Their  lack of funds means they have to compromise on the surface issues like designs.  They can’t compromise on the very structure and foundation of a building.  Unfortunately, the opposite approach happens in business when IP is ignored.  People can spend a fortune on the surface things like branding and websites while ignoring the fundamentals.

Distinguish IP from other legal work

While there are some legal issues you can and should skimp on in the early days of a business, IP isn’t one of them.  Note that IP is very often a contractual matter, and isn’t just about registrations.  So, take advice to see how to minimise your IP expenditure in a safe way if you think spending on IP may seem a waste.  Some business owners question any expenditure which doesn’t enable them to make money (such as learning a new marketing trick would increase their  chances of generating revenues).  However , think of IP as what enables you to keep the money you make, and in some cases to continue to earn revenues. So at the very least you absolutely have to take advice in order to develop your strategy for IP.

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