The great thing about trademarks is that many of the rules and principles are pretty straightforward and commonsensical. With a rudimentary understanding of these rules, you can go a long way in making smarter decisions. Here are ten things to know.
1. Distinctiveness – the prerequisite for legal protection
This is the most important concept in trademark law. In order to get legal protection, a trademark needs to be “distinctive”. Distinctiveness essentially means that your trademark is capable of distinguishing your products from other similar products. If your product name is just generic (MILK) or descriptive (MILKY), you cannot get exclusive rights to it. If your brand name is not distinctive, you cannot prevent others from using a similar brand name. Distinctiveness is a requirement for getting your trademark registered.
2. Think beyond names and logos
Most registered trademarks are either word marks (names of products or services) or logos (for example, the “Golden Arches” of McDonald’s). In addition to these, a trademark can be almost anything that fulfills the requirement of “distinctiveness”. For example, many companies have protected their jingles as trademarks. Jingles can be highly memorable. A particular colour or movement can also be a trademark, as well as the shape of a product (e.g. the shape of Toblerone chocolate). These non-traditional trademarks can be highly valuable assets. Another good example is Christian Louboutin’s red shoe bottom.
3. Registration gives legal protection
Trademark rights are created by registration. Although in some countries it is possible to get limited trademark rights based on the use of the mark, it is often an expensive and uncertain strategy to rely on non-registered trademark rights. Lack of registration is also a red flag for investors as the brand is particularly vulnerable for legal problems and challenges. Also, most countries do not even recognise non-registered trademark rights. If you want trademark protection, you should register your mark. Registering is much cheaper than trying to rely on unregistered rights (if they are even available in your country). In addition, when you register your trademark, others can see that you are the owner of the mark. That way you can also reduce the likelihood that somebody accidentally adopts a similar brand.
4. Earlier is better – register your trademark as early as possible
When two trademarks collide, the one who can show earlier entitlement usually wins. Most countries operate on a “first-to-file” basis, so that whoever has applied for a trademark earlier has prior rights to it. So while registration is essential, equally important is to do it as soon as possible. It is a big mistake to wait until your brand gets big and famous. The Coca-Cola Company filed for their first trademark application for Coca-Cola on 14 May 1892, just barely after they had been incorporated as a company and when they had only sold a couple of bottles. They did not wait first to become a global giant, and neither should you.
5. List of goods and services – boring but vital
Trademark rights always exist in relation to particular goods and services. These goods and services must be specified in the trademark application. For example, “Ford” is a trademark for automobiles, and “Adidas” is a trademark for clothing and footwear. This also explains why it is possible that two companies have identical trademarks. For example, both Ralph Lauren and Volkswagen use the trademark POLO. The list of goods and services you include in the application is vitally important in determining the extent of your trademark rights against third parties. Drafting a good list takes time and expertise. A deficient list of goods and services is the most common problem in DIY trademark applications. The bad news is that once the application is filed, it is not possible to expand the list.
6. Likelihood of confusion
Likelihood of confusion is one of the most fundamental concepts of trademark law. The owner of an earlier trademark can prevent the registration and use of the later trademark if there is a likelihood of confusion between those two marks. Typically it is required that the trademarks are identical or similar, and that they cover identical or similar goods and services. Assessing whether there is a likelihood of confusion is often difficult, and there are dozens of legal rules and principles that must be taken into account. There is a likelihood of confusion when it could be assumed that two products with similar names are produced by the same company (or economically related companies). For example, Mars Inc. makes a chocolate bar called “Twix”. If you saw a chocolate bar called Twax, it would not be an unreasonable assumption that it’s also produced by Mars Inc. There is also likelihood of confusion if the names are so similar that the consumer cannot tell them apart (accidentally buys the other brand what he intended).
7. Territoriality of trademarks – go country by country
Trademark rights are territorial. Your trademark rights exist only in the countries where you have registered your trademark. For example, if you register your trademark only in the EU, it does not get any protection in the US (and vice versa). There is an international registration system, called the Madrid System, that makes registering trademarks internationally easier and cheaper. But even with that international system, you need to individually choose the countries where you want your trademark to be protected. The bad news is that there is a cost for each country. The more countries, the more expensive it is. Our clients often say that they want “global protection”. In reality, this typically means international registration in maybe 20-30 countries.
8. Use obligation – use it or lose it
Trademark rights may be lost if the mark is not used. In most countries, there is a rule that if the mark is not used for 3 or 5 years (depending on the country), others can have it cancelled. Each year millions of new trademarks get registered, and the purpose of the use requirement is to make sure that old and unused trademarks do not unnecessarily prevent the creation of new trademarks. In addition, in some countries registration is granted only after the trademark is put to use. When you have registered your trademark, you should keep proper documentation of its use.
9. Use trademark symbols properly
Often especially smaller companies attach the ® symbol to their advertising material even if their trademark is not registered. Using the ® symbol with an unregistered trademark is misleading advertising under the EU directive on misleading and comparative advertising. The ® symbol is only for registered trademarks. In contrast, the ™ symbol can be used and should be used with trademarks that are not registered. Using the ™ symbol with a product name will notify others that you consider the name to be your trademark. The ™ symbol can also be used with registered trademarks, but the ® symbol is more prestigious. In addition to it being misleading advertising, the improper use of the ® symbol may come with other penalties in different countries. In many countries, there is no particular regulation on the use of the ® or ™ symbols, but in some countries, their improper use can even constitute a crime. So be careful. Use the symbols, but use them properly.
10. Know the difference between a trademark, company name, and domain name
There is often confusion about the distinction between trademark, company name and domain name. In many cases, there can be considerable overlap between them, but in other cases, there are clear differences. Domain names are simply internet addresses, and getting a domain name does not give any protection to the name itself. A company name identifies the company that is behind a particular product or service. For example, Procter & Gamble is a company name that is behind many different brands. A trademark identifies a particular product or service in the market, such as Pampers or Head & Shoulders (trademarks of Procter & Gamble). Sometimes the company name, trademark and domain name are the same. For example, Airbnb is a company name, and their trademark and domain name are the same. Sometimes a domain name can also be a trademark, such as in the case of Booking.com. Put the other way, a trademark can contain a domain name (the trademark is not “Booking”, but “Booking.com”). The important point to understand is that domain name registration does not give any trademark rights. A trademark must be registered separately (as in the case of Booking.com). Your domain name does not prevent others from registering and using the same trademark. It only means that nobody else can have the exact same domain name.
Understanding these basic concepts and principles gets you a long way. If all of the above is summed up in a few words, it would be something like this: choose a distinctive trademark, pay attention to the list of goods and services, register your mark as early as possible in all relevant countries, make sure your trademark is put to use, and with all materials, use correct trademark symbols to make your customers know that you have a brand worth protecting and to let your competitors know to stay clear of your brand.