Establishing a brand name or brand value is the objective of every company. Registering a trademark is the foremost step in this direction. Registration of trademarks can help a business grow as it enhances the marketability of the brand and helps it stand out from the competition. A trademark is one of the four types of basic Intellectual property Rights available in our country.

It acts as an important intangible asset for any startup as it can help them thrive and compete against the established players. It can protect the brand from any damages with regard to reputation by ensuring that opponents cannot sell goods under any similar names or marks. It will further prevent the competitors from copying or stealing the brand. For example: In the case of Bayerische Motoren Werke Ag vs Om Balajee Automobile (India)1, the plaintiff, who was a renowned automobile company having the brand name BMW, filed a case of infringement and contended that the defendant’s brand name was phonetically and visually similar to their registered mark, BMW. The defendant has been trading in electronic automobiles under the brand name DMW. However, the plaintiff secured the first registration for its trademark in 1917 and now has a number of trademarks registered. They submitted that their mark is a well-known trademark as per section 2(1)(zg) of the Trademarks Act, 1999. Thus, the court refrained the defendants from using the brand name DMW on account of the use being dishonest and deceptive.

What is a Trademark?

Section 2(1)(zb) of the Trademarks Act, 1999 defines a trademark as a mark capable of being represented graphically and capable of distinguishing the goods or services of one person from those of others. These marks may include the shape of goods, their packaging, and a combination of colours. Trademark law prohibits anyone from using a trademark that is deceptively similar to a startup’s registered trademark.

For instance: In the case of Industria De Diseno Textil S A vs Oriental Cuisines Pvt Ltd & Ors2, it came to the notice of the well established fashion brand, Zara fashion, that a restaurant was operating in Delhi under a similar name. Zara fashion ventured into the Indian market in 2010 and also had a few trademarks registered in India. Due to a strong case presented by Zara Fashion by showing that they were a well-known brand having registered trademark in India since 1993, the Delhi High Court ruled that the restaurant Zara Tapas Bar should change its name. The restaurant is now functioning under the name of Tapas Bar.

This case was ruled in favour of the international fashion brand, Zara Fashion as they got their mark registered. Also, the application for the registration of the restaurant’s mark was opposed by the plaintiff. Thus, they should not have proceeded with the use of the mark without getting the registration done. If the restaurant would have gained the registration of the trademark, they could have presented a stronger case and would be prevented from changing their name.

Following a good Intellectual Property strategy, specifically, trademark strategy from the initial stages can help prevent any infringement or passing off in the name of your brand at a later stage.

While trademarks are not global marks, they can still be registered universally through the Madrid System. However, the first step for universal registration of a trademark under the Madrid system is its registration in your own country. After getting the trademark registered in your nation, you can file for its registration for global use.

Trademarks can be a word, logo, or design. You can get words or designs in any language registered. For instance: The ‘Swoosh’ logo of Nike is one of the many trademarks registered by the company. Trademarking the name and logo will help the startup distinguish its products and services from other brands. Again taking the example of Nike, it is well-known throughout the world because of its ‘Swoosh’ logo. Its distinctive marking will also ensure that rival companies do not get a chance to misuse or appropriate the name of the brand or pass off its goods or services in the name of the other. The importance of trademark registration for startups is explained in detail below:

Priority in legal Issues

Registration of a trademark can help avert possible legal issues in the future as registered trademarks possess statutory rights against infringement. Even though Sections 34 and 35 of the Trademarks Act, 1999 provides protection to unregistered trademarks and gives them some benefits, Section 27 provides that no action can be taken for infringement of an unregistered mark which means that legal protection for your trademark against passing off or infringement is severely limited. Registration of trademarks also eases the burden of proof of the plaintiff in infringement cases, meaning once you register the trademark in your name, you need not once again prove your ownership of the trademark in case of a dispute.

In the case of Larsen And Toubro Ltd. (L&T;) vs Lachmi Narain Trades And Ors3, the plaintiff claimed that the defendant has been using ‘LNT/ ELENTE’ which is deceptively similar to the plaintiff’s trademark. The defendant had applied for the registration of their trademark but the application was pending before the Trademarks Registry. However, the plaintiff is commonly known by the name L&T and has obtained registration for the same trademark in various classes. Even though the defendant claimed that the letters ‘LNT’ is the abbreviation for Lachmi Narain Trades, they were refrained from using the mark or any other similar marks.

Create Brand Value

Registration of a trademark can help a startup secure its brand and show the consumers the distinctiveness of its products and services. It can prevent competitors from copying its logo and selling goods or services in the name of your startup as the consumers can also recognise your brand and choose it. It can also help provide credence to your startup in the eyes of the consumers and help your company stand apart. This has two major business implications for the startup

1.Loss of business by rivals selling under a name same as yours or deceptively similar, thereby fooling customers into thinking that they are actually buying from you.

2.Loss of reputation if the company using a name same as yours or deceptively similar, provides poor quality products or service. It is your brand name that ends up getting adversely affected.

An Asset for the Company

A registered trademark of a successful company is a huge intangible asset for the company. As per the website Statista4, Apple’s brand value as of 2021 is a cool $ 263 Billion. A registered trademark can help in increasing the brand value for a startup as it can be used effectively in marketing strategies. Trademarks can help the customers associate a brand with its performance. It can also be beneficial if a startup wants to expand or diversify its products and services. In other words, it can lead the way for startups to expand in other industries. It can also help attain more value by putting itself up for sale, merger or acquisition. The monetized value of a registered trademark can be significant at such a stage.

Helps the Customers Find Your Brand

In today’s world of high competition the brand that will survive is the brand that establishes its unique identity. Registration of trademarks can help distinguish your brand from competitors. They act as an effective way of capturing the attention of customers. It makes the products and services stand out from those of an opponent.Customers can gather information about your startup, including its reputation, through the trademark.

Trademarks can be Used for Eternity

It is also important to emphasize how long a registered trademark can be used. While copyrights and patents have a pre-defined life of 70 and 20 years respectively, there is no such limitation for a trademark. Though trademarks are registered for a period of 10 years, they can be renewed before the expiry of these 10 years. Thus, a trademark, with timely renewal, can last forever. However, one can lose a trademark due to 3 main reasons. First is its non-usage and abandonment, second is the trademark becoming too generic and the last one is trademark being deceptive.

Conclusion

To sum up, the protection of trademarks at the initial stage of startups can be extremely beneficial. Imagine a situation where your startup becomes successful and you have not registered your trademark, a number of companies might want to profit from your successful brand. To avoid such situations and grow your startup profitably, you should consider registering trademarks as a top priority. It is a step that would be helpful in the long run and provide you with an advantageous position in case of any hassles in the future.