Protecting Your Brand with a Trademark: What’s in a Name?
A business’s online and market presence is integral to that company’s identity and success. It encourages their customers, suppliers, clients and employees to trust in them as a brand. The most effective way to protect this identity is through trademarks. However, a recent study has shown that start-ups are now abandoning unusual one-off names for their companies in favour of descriptive recognisable words.
While this certainly has its benefits in that start-up’s don’t need to “teach” consumers about who they are and what their name means, we consider in this article the effects this might have on legal brand protection.
Securing a trademark
Firstly, what is the point of a trademark?
Trademarks are essential for any aspiring business, since before a trademark is registered, any other business could arguably trademark the same name, logo, or other recognisable feature of a brand. Trademarks are registered on a “first come, first served” basis. Therefore, if a brand which has used a certain logo or name for years fails to register it, the next company that tries to do so may be able to. This would be incredibly frustrating if a brand had been built under a certain trading name, known and trusted in the territory and industry that it operates in, with vast amounts of time, budget and energy being spent on building this brand.
Securing a trademark protects the brand that has been created, and also provides recourse to prevent another business from using similar names and signs and riding off of the success of another business.
With a registered trade mark, a start-up can take action against parties who have attempted to register conflicting trademarks, are operating with conflicting brand images and threatening to damage their business, or dilute the brand they have worked hard to build.
A trademark can also be an ongoing asset, which grows in value as a brand develops its worth. Business investors can be impressed, customers will trust the brand, and suppliers are encouraged to work with it. It offers a monopoly for the brand, avoids other brands being able to commit infringement, and is a useful strategic tool.
The EU Trademark Register is recognised throughout Europe, and offers protection in parallel with the national and international protection that exists in the EU. So, registering a trademark in the EU has huge potential in the building and protection of a successful brand.
Having a good and recognisable trademark helps customers recognise your brand and encourages customer loyalty. From a customer’s perspective, a recognisable trademark is meaningful in that they trust a brand and can recognise it, and this encourages them to be loyal towards that brand.
Start-Ups want simple and descriptive names?
A recent study conducted by Crunchbase is calling 2020 “the year of the noun”.1
Studies have shown that start-up companies are increasingly choosing to name their businesses with recognisable dictionary words, rather than some of the more unique (some refer to them as “silly”) sounding names that we have seen trending in the past.
A naming consultancy interviewed by the study has confirmed that rather than using unusual words to create a unique brand with a word that becomes attached to it, start-ups are choosing to name their companies with known words that explain exactly what they do- The Browser Company which provides internet browsers, Wardrobe which is a clothing rental start-up, and Banked, a payment platform, are all given as examples.
This got us thinking: what is there in a name? Is it more advantageous for start-up companies to name themselves so that a consumer passing by can easily guess the product or service they offer, or is it better to choose a unique sound or word that will attach itself to that brand only?
Apparently, start-ups are becoming less concerned with getting website domains which are exactly the same as their registered names, and are happy to compromise in order to have a simpler name that they can trade with, even if they can’t have that specific domain name.
The simple names are being chosen for their simplicity, their ease of spelling and ease of understanding. While large brands have the budget to market their unusual names and ensure that consumers begin to recognise them, smaller brands are choosing simple, descriptive names that don’t need to be taught.
However, the advantages that start-ups can see in these simple names, can actually be a disadvantage when it comes to brand and trademark protection…
The importance of a distinctive name
While it is easy to see how much of an asset a trademark is to a business, it is not so simple to obtain.
There are only a few restrictions placed on what a company legally can be registered as, and how they can design their logos, websites, packaging and so on- this is not the same as registering a trademark, and while a company might have been given a certain name or design, this is not guaranteed acceptance as a trademark. Any signs being capable of distinguishing the goods or services of one business from every other business are capable of being trademarked- but how is this reviewed?
The general criteria for an EU trademark is that it can be represented on the register, it can function as a trademark, it cannot be identical or confusingly similar to earlier rights, and it must not infringe famous trademarks. It could be a name, mark, letters or numbers, shapes, packaging, or even sounds.
As well as this, there are grounds for refusal set out, so that even if the above criteria have all been met, a company may still not be able to register a trademark. A trademark will be rejected if it lacks distinctiveness, consists exclusively of signs or indications which are merely descriptive, is contrary to public policy or morality, contains specially protected emblems, or is a three-dimensional trademark.
Distinctiveness is a fundamental requirement for trademark registration under EU law. This means that a term which is merely descriptive for the products or services that a company will offer, is not distinctive enough to be trademarked. In fact, the EU Trademark Directive specifically states that a name which is inherently descriptive in the eyes of the public, or is commonly used in trade, cannot be trademarked.
So, while descriptive words might be simple and easy for new customers to remember, it might not be the most effective option when considering how to protect your brand from possible competitors and create an awareness of your brand.
Even if a company was to be the first company using a descriptive term and was allowed to register that term as a trademark, if it is a term which is likely to be used a lot then they may lose that trademark through the process of degeneration. EU law states that, if a trademark which is distinctive and rightfully registered is then used to such an extent over time that it eventually becomes descriptive for the products in relation to which it originally was a distinctive trademark, the trademark will be declared invalid.
Think of nylon, or thermos- these products have now become descriptions for the products which they originally were registered as trademarks for!
Therefore, while it might seem commercially advantageous to register a company under a simple name or start using simple descriptive words for branding, it is not so legally advantageous as you might miss out on brand protection and a useful asset which would otherwise have been available.
Using your trademark as an asset
It is important to mention what happens after a trademark has been registered.
While many companies spend time and money registering their brand to ensure it is protected and cannot be diluted, it can be difficult for companies to know what to do next. While there are many benefits to trademark protection, there are some risks which should be kept in mind too. Trademark holders need to be aware of renewal deadlines, revocation threats if they do not use the mark for a continuous period of years, a declaration of invalidity, and an appropriate use of notices to minimise the risk of infringement and the risk of a mark becoming generic and therefore invalid.
If a trademark holder does not adequately oversee the use of its trademark and object to infringements, and companies begin using the mark frequently, it could become invalid through the process of degeneration.
Overseeing the protection of a trademark and making sure there are no infringements can be very time consuming, especially if the company is not familiar with national trademark registers. Remember, EU trademark registration protects a brand throughout the EU, and this means a brand can object to any infringing uses of a trademark anywhere in the EU, even if this is a registration of a national trademark register.
The rapid development of technology means that it is increasingly easy for other brands to use similar trademarks either unknowingly or in an attempt to pass-off on another’s success.
In this online era, information can quickly be spread about by copy-cat brands which can dilute the effectiveness of the original brand that has been built, taint the image it has worked hard to build, or threaten its trademark.
We urge anyone who does have a trademark to make sure you stay on top of new registrations and also the use or mention of any of your trademarks online where goods or services are offered, and make sure you do use this asset to its full potential.
Of course, legal assistance can be invaluable here, to make sure no stone is unturned, and to consider what the best next steps are if infringements are discovered.
If you would like any guidance on the trademarks you have or intend to register, or would like to discuss any other legal matters, please don’t hesitate to get in touch!
Article by Lily Morrison @ Gerrish Legal, October 2020 / Cover Photo by Patrik Michalicka on Unsplash