SMEs Guide to Trademarks

guide to trademarks
cloud accounting

Running a business means that you constantly need to learn about different legal and operational aspects of  entrepreneurship. And the longer you run your company, the more often you’ll find yourself navigating the  somewhat muddy and confusing terminology and rules.

Previously, we detangled different accounting/financial practices and the commonly used terms such as break-even analysis, retained earnings and operating income. In this post, we’d like to move on to another area of frequent confusion for SMEs: trademarks.

Ever wonder how the brand registration process goes and how to trademark different business assets? That’s exactly what you’ll learn in this post.

Why Do I Need a Trademark, Anyways?

For small businesses the benefits of registering a trademark may seem mild initially, especially considering the possible hassle around the whole process. But hey, let’s take a closer look at what you’ll be getting post-registration.

Exclusivity

By law, no one but you is authorized to use your trademark. That means no savvy competitor or shameful copycat can capitalize on your success with some product e.g. a cronut. If anyone attempts that, you can go after them in court and receive a hefty compensation.

Copycatting should not be taken lightly. Big businesses are cloning each other’s ideas on a daily basis (think Instagram/Snapchat or Sega/Nintendo). While bigger players can survive and maintain such competition for years, smaller businesses can easily go belly up fast if a smarter competitor copies and implements some aspects of their biz.

Distinction

Consumers have an ongoing love affair with brands these days. The fashion industry is now going nuts over “all-things-logo” designs. Beyond fashion, owning a trademark gives your business a status symbol and higher recall among consumers. Whenever you see a half-eaten apple on a tech gadget, you instantly know it came from Apple Inc.

Trademarks are an effective commercial communication tool with your audiences. They make your business and products/services stand out.

Investment

Your trademark value grows along with your business size and reputation. The best part? That reputation can be transferred from one industry to another if you ever plan to expand beyond your original offerings. If you’ve built a name for yourself as an eyewear brand, you can then easily expand to clothing or makeup, and “drag” the good word along with you.

You should view trademarks as a property asset. Similar to real estate, trademarks increase in value over time and can be sold, licensed to other businesses or used as a security interest if you plan to apply for a loan.

What Small Businesses Can Trademark?

Before you learn how to trademark something, you need to make sure that “something” can be trademarked in the first place. As always certain dos and don’ts apply.

List of assets you can trademark:

  • Logos
  • Business/brand names
  • Service names
  • Product names
  • Certain product characteristics e.g. a specific mark covering characteristics of a good. If you manufacture 100% organic beeswax candles, they can fall under a certification mark.

And here’s a quick list of assets you cannot trademark:

  • Proper names without the consent from the person
  • Generic words, phrases and popular terms (e.g. door)
  • Government symbols
  • Vulgar or otherwise offensive words or phrases
  • Immoral, deceptive or appalling words and symbols
  • Sounds or short tunes. Music is covered by copyright.
  • In the US, the likeness of a President, former or current.

Some trademarks fall in between these two areas. Technically they can be registered, but oftentimes the process of obtaining such trademarks will require a strong case and expert help from an attorney. These instances include:

  • Descriptive names that can’t be distinguished from those of other products (e.g. Cola would be hard to trademark for someone else than “Coca-Cola”).
  • Names containing a geographic location, such as Boston’s Donut Palace.
  • Generic names
  • Deceptive names e.g. Wooden Chair.
  • Surnames pertaining to a product.

But again, there’s plenty of exceptions to these rules  think Kentucky Fried Chicken. So going after a trademarks falling into those categories is possible, but will require serious “lawyering up”

Trademark vs Copyright vs Patent: What’s The Difference?

Next, make sure that getting a trademark is the right move for your business. Who knows maybe you’ll be better off with copyright? The last thing you’ll want is to understand that you’ve needed something else mid-way into the trademark application process.

So let’s recap the difference between a trademark, copyright, and patent:

  • Trademarks: Protect the words or symbols that show the source of goods and services e.g. Freenvoice.
  • Copyright: Protects intellectual rights and artistic works such as music, lyrics, patterns, designs etc. Example: our free invoice templates are protected by copyright, meaning that you are free to use them as you please, but you cannot claim that you’ve made them, transfer or resell them.
  • Patent: Protects inventions (tangible or intangible such as software) or alterations to inventions. For example, we if ever decided to develop an innovative payment processor, we can apply for a patent.

Trademarks come with a  longer expiry date. You have to file for an initial review between year 5 and 6, and afterwards you will need to apply for an official renewal in 10 years time and/or if you have stopped actively using your trademark for some period of time and then decide to pick it up once again. Mind that governmental offices will not notify you when your trademark is getting close to expiry. You’ll have to keep an eye on the dates yourself. Late renewal fees also apply.

What’s The Difference Between ™ and ® marks?

You’ve probably seen both options used by brands. Here’s the main difference between them with tips for when to use either of the options:

  • ™: You can add the ™ symbol to any name or logo you consider a trademark and plan to register as one.
  • ® is the symbol for a registered trademark. You can add it to your assets only after your trademark has been officially registered and recognized by the authorities.

How Do You Get a Trademark?

Now once the decision is made, it’s time to move on with the brand registration process. First, note that the registration process will slightly differ depending on where in the world you plan to register your trademark. Next, we should add a disclaimer that this post offers general guidance only. For more specific questions, always contact a trademark attorney.

1. Check if Your Trademark is Available

When you come up with a good product, business or brand name you should always check if it has already been registered or no. You would also want to stay away from similar sounding names to avoid infringing someone else’s trademark.

For starters, you can look up your potential trademark in online databases, maintained by authorities worldwide. You should conduct searches for each country in which you do business. Here’s a quick list of databases worth checking:

Beyond that run a search on Google using the same words/phrases you plan to trademark. As mentioned already, trademarks are based on use. So if some brand recently went out of business, their trademark may now be on the table as well.

2. Decide Whether You Plan to Register Your Trademark Internationally

If most of your customers hail from your home country, international trademark registration is optional. But if you run an online product/service business, getting licensed internationally may be worth the effort.

The international trademark registration system is called the Madrid Protocol. Surprisingly though, it is administered by the World Intellectual Property Organization (WIPO) located in Geneva, Switzerland. This system allows you to register a trademark and have it protected in several countries (who are members of this organization). You can begin the application process in your country, and obtain trademarks in several countries at once.

3. Begin the Trademark Registration Process

Once you’ve made sure that your trademark appears to be available, hire a legal professional who will run a deeper search and prepare additional documents for the application process (local and/or international). This way you save yourself from wasting time and money on chasing after a mark that you can’t possibly have.

In the U.S. the trademark registration process is conducted through the U.S. Patent and Trademark Office (USPTO) and involves the next steps:

  1. Searching the trademark database
  2. Filing the mark online
  3. Paying the registration fee

How Much Does it Cost to Trademark a Name?

The fees will vary depending on the type of registration you’ll choose to pursue. In the US, if you decided to register your business name as a trade name on a state level, the registration fee will range from $50-$150.

If you opt to go for a country-wide registration, expect to pay $225-$400 for electronic applications per class of goods or services, depending on the type of application you file. The trademark costs of registering the old-fashioned paper way are higher – $600 per class of goods or services.

In the UK, the cost of filing a trademark registration application is £200 with extra £50 each extra class added to the same application.

To find out trademark costs in any other country, determine the authority responsible for those, and check their website. Typically, all the fees are listed publicly, as well as a general outline of the application procedure. So go on and explore your options!

No Comments

Post a Comment