Trademarks for Small and Medium-Sized Enterprises
By Carol Desmond
A trademark is a sign capable of
distinguishing the goods or services produced or provided by one
enterprise from those of other enterprises. Any distinctive words,
letters, numerals, drawings, pictures, shapes, colors logotypes,
labels or combinations used to distinguish goods or services may be
considered a trademark.
In some countries, advertising slogans
are also considered trademarks and may be registered as such at
national trademark offices. An increasing number of countries also
allow for the registration of less traditional forms of trademarks
such as single colors, three-dimensional designs [shapes of products
or packaging], audible signs [sounds] or olfactory signs [smells].
However, many countries have set limits on what can be registered as
a trademark, generally only allowing for signs that are visually
perceptible or can be represented graphically. Here are some
Microsoft; Froot Loops; Ford (these are products or goods)
Blockbuster; McDonalds; Kinkos (these are services)
CBS eye in a circle; Apple Computer’s Apple; Nike Swoosh
Kodak yellow packaging; Howard Johnson red roof; Owens-Corning
pink fiberglass insulation
Coca Cola bottle shape; Banana Republic decorating motif;
Slogans: Microsoft's "Where Do You
Want To Go Today?", IBM's "Solutions For A Small Planet",
Clairol's "Hair Color So Natural Only Her Hairdresser Knows For
MGM'S lion roar; Harley
Davidson's motorcycle exhaust sound; NBC's chimes.
ILGWU (International Ladies' Garment Workers' Union; GSA (Girls
Scouts Of America); AAA (American Automobile Association).
Good Housekeeping Seal Of Approval; Harris Tweeds; Roquefort
What are trademarks for? The
main function of a trademark is to enable consumers to identify a
product [whether goods or service] of a particular company so as
to distinguish it from other identical or similar products
provided by competitors. Consumers who are satisfied with a given
product are likely to buy or use the product again in the future.
For this, they need to be able to distinguish easily between
identical or similar products.
By enabling companies to differentiate
themselves and their products from those of the competition,
trademarks play a powerful role in the branding and marketing
strategies of companies. The image and reputation of a company
create trust, which is the basis for establishing a loyal
clientele and enhancing a company's goodwill. Consumers
often develop an emotional attachment to certain trademarks based on
a set of desired qualities or features embodied in the products
bearing such marks.
Trademarks also provide an incentive
for companies to invest in maintaining or improving the quality of
their products in order to ensure that products bearing their
trademark have a positive reputation.
The value of trademarks:
A carefully selected and nurtured trademark is a valuable business
asset for most companies. For some, it may be the most valuable
asset they own. Estimates of the value of some of the world's most
famous trademarks such as Coca-Cola or IBM exceed $70 billion each.
Why should your company protect trademarks and service marks?
While most businesses realize the importance of using trademarks to
differentiate their products/services from those of their
competitors, not all realize the importance of protecting them
Registration, under the relevant U.S. trademark law, gives your
company the exclusive right to prevent others from marketing
identical or similar products/services under the same or a
confusingly similar mark.
Without trademark registration, your investments in marketing a
product or service may become wasteful because rival companies may
use the same or a confusingly similar trademark for identical or
similar products/services. If a competitor adopts a similar or
identical trademark, customers could be misled into buying the
competitor's product/service thinking it is your company's
product/service. This could not only decrease your company's profits
and confuse your customers, but may also damage the reputation and
image of your company, particularly if the rival product/service is
of inferior quality.
Given the value of trademarks and the importance that a trademark
may have in determining the success of a business in the
marketplace, it is critical to make sure that it is registered in
the relevant markets.
In addition, a registered trademark may be licensed to other
companies, thus providing an additional source of revenue for
your company, or may be the basis for a franchising agreement.
On occasion, a registered trademark with a good reputation among
consumers may also be used to obtain funding from financing
institutions that are increasingly aware of the importance of brands
for business success.
How can your company protect its trademarks and service marks?
Trademark protection can be obtained through registration and, in
some countries also through use. Even where trademarks can be
protected through use, you are well advised to register the
trademark by filing the appropriate application. Registering a
trademark will provide stronger protection, particularly in case of
conflict with an identical or confusingly similar mark.
Is the registration of the business name of your company sufficient?
Many people believe that by registering their business and its
trade name at the state business registry, the name is
automatically protected as a trademark. This is a rather
common misconception! It is important to understand the
difference between trade names and trademarks.
A trade name is the full name of your business, such as "Blackmark International
Inc." and it identifies your company. It often ends with
Inc., Corp., LLC, or Ltd or other similar abbreviations that denote
the legal character of the company.
A trademark, however, is the sign that distinguishes the
product/service of your company.
A company may have various trademarks. For instance, Blackmark
International, Inc. may sell one of its products as BLACKMARK but
another as REDMARK.
Companies may use a specific trademark
to identify all their products/services, a particular range of
products/services, or one specific type of product/service. Some
companies may also use their trade name, or a part of it, as a
trademark and should, in that case register it as a trademark.
Five point checklist for selecting trademark:
Check that your trademark of choice meets all the legal
requirements for registration;
Conduct a trademark search to make sure that it is not
identical or confusingly similar to an existing trademark;
Make sure the trademark is easy to read, write, spell and
remember and is suitable to all types of advertising media;
Make sure the mark does not have any undesired connotations
in your own language of any of the languages of potential export
Check that the corresponding domain name [i.e. Internet
address] is available for registration
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