Trademark – Why’s and What’s for You

Hey Mr. Entrepreneur have you earmarked some sweat and blood for your startup’s trademark? When you first take those tiny steps in building your dream venture, do you ever give thought to a thing called trademark? If yes, you have begun half right and if no you have begun half wrong.

Place yourself in a situation wherein you have been in your business doing quite okay and two years later you figure out that the trade name that you have been using has already been registered by someone for over 5 years. This simply means that unintentionally you have been generating goodwill for another brand name for 2 years and in the worse case you can anytime even get a notice for infringement from the original holder. Isn’t such a thing upsetting and total waste of time? Well, I have handled and sorted such cases and clients realize later how their negligence has cost them dearly.

In another horrendous situation, one of my clients was building his website and at that point in time he got a proposal from an investor to acquire it. My client refused the investment. Sadly enough, the investor on the other hand went on to file the trademark for the name of the website and sued my client. Business and ethics well is not the way for most people! If only my poor client had the money to prove his case and if only he had taken the necessary steps things would have been much better for him.

In both the above cases, the need for a trademark was understood much later only when the individuals landed themselves in a soup.

So, below is a short post giving you entrepreneurs a simple lesson on trademarks and its importance. Heed to it so you can save yourself from uninvited trouble later.

What is a trademark?

A self-explanatory definition of a trademark, “trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours;…”[Sec.2(1)(zb)]

In order to distinguish your business from others, each business associates itself with a tradename. Why do we need distinguishing names for products and services? What if all the cars are branded as ‘BMW’ what will be the distinguishing factor of so much research and development! Imagine the financial effect on company’s revenues.

We need distinguishing names because each name creates a value, a reputation, a marketability, brand loyalty with it. And what if same names are used?  You must have seen a lot of shops with same name, products &services having same or similar name in the market, ever wondered how much loss it could be to the original holder of the name? Talking about losses apart from the financial losses there could be an ill effect on the brand reputation too.

When there is so much value, marketability, brand loyalty associated with a Trademark what should be the correct time to register a trademark in India? Especially for a startup.

When should a startup register a trademark in India?

If we understand the status of a startup, a startup normally is into deep trouble due to the financial constraints, market penetration, concentrating on core activities. But if you see the underlying emphasis of all this that a startup does is for making a brand name in the market, becoming known to people and sell product and services which overtime have become known to people.

It is an important fact to know that, it is not mandatory to register a trademark in India or register   copyright. Let’s get moving and see a few benefits of getting your trademark registered

1. It protects the hard earned goodwill or customer loyalty of a brand.
2. Discourages other from promoting a same or similar brand in the same Industry. I have a real life example to share here.
3. Easy Marketing and Promotion
4. It gives power to assign/ transfer/ license the brand name to others and earn royalty.
5. Nowadays Trademark registration is very affordable in India
6. One can get a legal relief and damages in respect of infringement/ misuse of the trademark by competitors
7. It would certainly place the startup at a better position while being acquired by a proposed investor.

Conclusion when should a startup register a trademark in india

The legal system in India does not make it mandatory to register a trademark because the emphasis is on date of usage of trademark and not date of application. If a company can justify the usage prior to anyone else the case becomes stronger. But this would mean repairs after damages. So subject to the financial constraint, if a startup has enough funds it should get started with the application of the trademark right at the very inception. And it takes time to register a trademark in India. A trademark normally takes a year to few years to be registered. While the application is pending one is allowed to use the “TM” sign and once it gets registered a ® can be used.

Modified for theRodinhoods originally posted here

Rahul is the co-founder at www.registrationsindia.com and helps startups in their Business Registrations, Taxation and Compliance matters.

Find me on Twitter @registerinindia