Date 26 April 2010
Business are constantly thinking about branding and building their brand, which involves considerable effort and expense. However, it is amazing how many businesses fail to value and protect their investment. Just taking some simple steps can enhance your brand's value and ensure it survives and thrives in a hostile market.
The Basics
A brand will normally involve use of a trade mark: a sign or device that is capable of distinguishing one business or product from another. A trade mark can be made up of words, signs, shapes and numbers. It can also include personal names. Trade marks can be registered or unregistered. The difference is in the protection and enforcement rights they afford. In a nutshell, it is easier and generally less expensive to sue for trade mark infringement (registered) than passing off (unregistered).
An Urban Myth
Do you think that by incorporating you have intellectual property rights in your registered name? Lots of people do. Unfortunately, they are wrong. With a few exceptions, Companies House will register a business name as long as it is not identical to another. For example, the addition of ‘Group' or ‘UK' to what would have been an identical name is sufficient. However, it is easy to see how confusion can be caused by this, and can damage your business. Do not rely on Companies House to protect your trading name!
Have A Good One
It is best to avoid brand names that are descriptive of the goods and services you intend to apply the mark to. The general rule is that trade marks that describe their goods and services cannot be registered. In some cases it may be possible to obtain a registration but it is likely to take considerable time and money to achieve it.
Carefully selecting a ‘different' or unique trading name will help you to stand out from the crowd. The trade mark will be talked about and is more likely to be remembered. Some brands - like Kodak - are made up words. Others - like Apple - are ordinary words used in an unusual context. Either is more likely to get you noticed than simple descriptive terms, as well as being easier to protect.
Getting Clearance
You need to check that the trade mark you want to use is available. This checking process is frequently described as a ‘Clearance Search'. Clearance of the proposed name should reduce the possibility of claims being brought against you for passing off or trade mark infringement, which could lead to you paying legal costs, damages and even having a costly rebrand.
Clearance will also help gauge your likely penetration of the market by ensuring the name you are using distinguishes you from your competitors.
A good place to start the Clearance Search is on the web. Search engines will provide you with a good idea of who else there is in the market using an identical name. A full Clearance Search will review trade marks that are similar as well as identical in the jurisdictions you intend to trade. This is to avoid infringement claims, which can be brought on the basis of similar names and similar goods or services or the fact there is confusion.
Surveying your Domain
During the Clearance Search process you should check that domain names are available. Aim for top level domains names such as .com, .co.uk, .eu and .net as these are the most common domains and therefore increase your chance of being found. The more domain names you register the more you reduce the chance of third parties diverting traffic from your website, be it inadvertently or deliberately.
Consistency is King
There is no point spending money and time rebranding if you do not make the most of your new logo . If you keep the same font, colour and style for your trademark you will raise awareness of your brand. Each marketing campaign will reinforce the brand identity. Circulating marketing materials in different colours, sometimes using the trade mark and other times using an acronym will confuse the message to customers and dilute the impact of the campaign.
If you have selected a descriptive name or brand, it will be more difficult to establish brand awareness, so consistent use is essential. Trade mark registration for a descriptive brand is difficult and proof that use has been uniform will support an application.
If you do not register a trade mark, a passing off action is needed to stop a third party using a confusingly similar name. Proof of reputation and goodwill is one of three elements of such a claim. So, once again, consistent use of a trade mark, that has enabled the business to gain a reputation, will be necessary.
Designer Watch
If you commission work to be carried out for you, such as the design of a corporate logo you must make sure that you obtain an assignment of the copyright in the logo. For example, if you do not own the copyright in the logo and you wish to use a different design agency, evolve your logo it or reproduce it on a website, opposed to just stationery, the designer may prevent you from using it without their permission or without a licence fee.
Keeping it Together
Trade marks and domain names are assets of your business and should be registered in the name of the business. Should you wish to sell your business or attract funding it will be important that your intellectual property portfolio is up to date. In fact failure to protect and manage your intellectual property can significantly effect the value of your business. Trade mark registrations need to be renewed. Management of the portfolio will help budget projections and establish whether the current portfolio is suitable. In some cases some registrations may be allowed to lapse and new applications filed.
In a business sale agreement there will be warranties to be given by the seller that the intellectual property rights of the business are being sold free of any encumbrances. If the business is not the owner of the intellectual property rights, for instance trade marks, domain names or copyright in the website this can cause problems. There may be a breach of the warranty or the agreement may not be signed until the intellectual property has been transferred to the business.
Start protecting your brand assets by:
- Identify the intellectual property within your business
- Registering any trade marks and purchasing domain names
- Monitoring infringement by regular online searches and take immediate action if infringement occurs
- Keeping your intellectual property portfolio up to date
- Ensuring you have the assignment of the copyright in your logo
If you would like more information or advice on protecting your brand, please contact Nat Young on 01727 798098 or by email at nathanael.young@salaw.com.
© SA LAW 2010
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.