Trademarks: The Basics
Trademarks allow businesses to distinguish their names or products from others and prevent unfair competition. In addition, they make it easier for companies to define their brands and set themselves apart from their competitors.
Trademarks are also important as they help consumers identify products or services with certain companies and prevent confusion. This gives consumers the confidence to rely on a certain level of quality when they buy products or order services from a specific company.
Trademarks have a very long history, dating back to 1266 when King Henry III of England mandated bakers to set distinctive marks for the pieces of bread they produced. The modern regulation of trademarks began in France in 1857. In 1862, England passed a law to protect manufacturers’ marks (The Merchandise Marks Act). The first law to govern trademarks in the United States was passed in 1905, succeeded by the Lanham Act forty years later.
What Is a Trademark?
Trademarks protect words, phrases, logos, symbols, and other identifiable features used in commerce. In most cases, a trademark will be a word or a logo, but you can also claim colors or sounds as trademarks in some countries.
Individuals, as well as businesses, can own trademarks. They can also transfer marks to other persons or companies. The actual creator of a mark can be different from the owner. Under certain circumstances, you can use someone else’s trademark under a license agreement, too.
Trademark Classes
Trademarks exist in “classes,” which is a way of dividing those marks into categories of use. The Nice Classification (NCL), established by the Nice Agreement (1957), is an international classification of goods and services applied for the registration of marks. A new edition is published every five years and, since 2013, a new version of each edition is published annually.
For the complete, up-to-date classification, please visit https://www.wipo.int/classifications/nice/en/
Registered vs. Non-registered Trademarks
Trademarks can either be registered or non-registered.
If the country that you are doing business in recognizes non-registered trademarks, you will be able to get the benefit of protection upon starting trading with your mark. The more trading you do, the higher the impact your mark will build and the stronger your claim of ownership will be.
There is no global register of trademarks, but some countries have collective registrations, such as the European Union, where you can register a trademark under the EU system and get protection in all EU member states.
Of course, registration comes with a particular cost. You can register a mark through a lawyer or agent, or you can do it directly on the webpage for the relevant country registrar. In the US, a trademark registration typically costs between $275 and $325. In the UK, it costs £170-200 and then there is an extra but lower cost of £50 for additional classes for the same mark. Be aware that these costs are subject to change. Also, trademark registration is not permanent, and you need to renew your mark, meaning that there is more cost every ten years or so (depending upon the jurisdiction).
Using a Trademark
Using a registered trademark is not mandatory, but it can be good for your business because it comes with the following benefits:
- exclusive right to use the mark in commerce,
- permission to use the ® symbol,
- ability to license the mark for use by other parties,
- defense against dilution,
- prevention of consumer confusion,
- protection against various forms of unfair competion.
Not Using a Trademark
Despite having its benefits, you can still run a successful business without using a trademark. In fact, it doesn’t make much sense to use a trademark if:
- the mark is too generic,
- you will not be using the mark in commerce,
- you do not plan to actually defend the mark,
- it doesn’t prevent all types of unauthorized use.