Importance of Trademarks: Everything You Need to Know
The importance of trademarks continues to increase for business owners. Intellectual property, also known as IP, refers to poetry, inventions, paintings, designs, books, music, and other creative work. 3 min read
Importance of Trademarks
The importance of trademarks continues to increase for business owners. Intellectual property, also known as IP, refers to poetry, inventions, paintings, designs, books, music, and other creative work. IP also includes symbols and signs businesses use to clearly identify the origin of services or goods.
When your business holds trademark protection, it becomes easier for customers to locate your business and the services or goods offered. Whether they are on social media, browsing the internet, or walking around the neighborhood, your customers are able to immediately identify your company and available products or services when you use a trademark. Information from the International Trademark Association states that trademark protection can apply to a package design, word, device, name, symbol, device, slogan, or any combination, as long as it distinguishes and identifies one product from another.
If another person or company started selling or distributing products with something confusingly similar to a trademark, the owner could apply for and receive protection on specific sounds, holograms, colors, or other aspects that distinguish a company and its goods or services. Every company has the legal right to protection. The trademark value will increase as the company's reputation gets better. A trademark can quickly become the highest-valued IP owned by a company since the mark will assure customers of the quality or service level, keeping them loyal to a specific brand or product.
As a company builds its goodwill, the brand value often goes up. Customers tend to remain loyal to their favorite brands, increasing the value of the company. Before a business can open a corporate checking account, a bank usually requires proof of a name with trademark protection, or at the very least, a DBA (doing business as) name. Registering a DBA does protect a company's business name but does not offer the same protection as a trademark.
Registering your trademark can also become a valuable and transferable asset, which your business could use to negotiate better business deals and provide more financial security. Putting any type of blanket restriction on registering trademarks or enforcement or the legal protections is short-sighted. Instead, businesses should focus on strengthening their brands and safeguarding their investments, while spending money in ways that will be beneficial. A well-protected and strong brand is much more likely to thrive, even when the economy starts to go downhill, while weaker brands will disappear in difficult financial conditions.
The cost to register a trademark prevents some from doing so, but if a business doesn't register its trademark, it risks:
- Damaging the reputation
- Destroying the brand
- Failing to protect the IP associated with the trademark
One of the mistakes made by companies is believing that registering the trademark or business name as a domain or company name offers the same protections as a trademark. However, registering a company or domain name will not prevent a third-party from using a similar or identical name. Businesses of all sizes should develop a strategy for trademark protection to properly protect their brands. It is also important that using a trademark will not violate other registered trademarks.
It's also critical to maintain a strong trademark portfolio that is enforceable. Watching and monitoring trademarks will help a business owner look for possible conflicts, including those who might be infringing on the protection or diluting the trademark. The purpose of trademark laws is to protect owners from losing income and sales due to confusingly similar marks between which a consumer can't differentiate. These laws also are designed to prevent confusion among consumers.
Creating a Trademark
Before you can register a trademark, it must meet the requirements based on the jurisdiction in which you plan to register it. In order to qualify for protection, a trademark must be distinctive according to the local or federal IP office.
The four main categories of distinctiveness for a trademark are:
- Generic: If it's too generic, a trademark will not qualify for protection. Generic terms can be used by anyone.
- Fanciful or arbitrary: The highest level of protection goes to a fanciful or arbitrary trademark, such as a made-up word or phrase or something with a common meaning that isn't related to the goods or services, such as Apple Computers.
- Descriptive: Descriptive terms can only be registered if additional meaning is provided, which proves the public connection to the mark.
- Suggestive: This category requires a consumer to think creatively to understand the connection between the term and the services or goods provided.
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