Brainstorming to name your startup? Read on…
There was once a group of youngsters sitting in a café scribbling over their notepads, almost spilling the coffee in the heat of their arguments. They were in a heated brainstorming session regarding a suitable name for their startup. A few tables across sat another young man, seemingly disturbed by the noise. All of a sudden he switches on his laptop and starts typing. After his coffee was done, he walks up to the bunch of ‘brainstormers’ with a smile playing on his lips and says “While your were shouting potential names for your startup, I went online and registered their names. Some of them were very good. You can buy them from me if you decide on any of the one’s you suggested. Thank you”. He gave them his contact number and left the café leaving the group at a loss for words.
I am not sure of this is a story or an anecdote passed on through the internet, but it raises a relevant topic with regard to startups and what they may tend to overlook in their hurry to make it big. It is not enough to get a catchy name, which is easy to remember. One should also ensure that one is not infringing the intellectual property rights of another company, as well as ensure that their Intellectual Property Rights are not infringed.
What we see of companies in terms of their intellectual property is just the tip of the iceberg, and there are many IP kinks in the unseen surface, that only comes up when they are infringed. Before we explain the importance of doing a trademark search before registering a startup and the importance of registering the name as soon as possible; we shall find out what a trademark is. And how it is defined under the Indian legal context.
What is a Trademark?
A trademark can be a sign, a design or an expression that makes a business recognizable from others. A trademark according to the Indian Trademark law, includes words, numbers, brand logos or even slogans, such that no other business can use it as their own. This list above is not exhaustive and there are more subjects that could be registered. The reason why a trademark is protected is because it is a part of the identity of a particular business entity and it makes it recognizable, it also upholds the goodwill and reputation of the business. An example would be the big yellow M in McDonalds seeing which; our mind instantly associates it with food and especially burgers. The same goes for brands such as Apple, Pepsi, Coca-Cola, Facebook … the list is endless. It is almost impossible for a startup to make the mistake of registering a brand called Pepsi or Coca-Cola, but this can’t be true for all companies.
At the initial stage of the Registration the Registrar can send you an Examination Report stating the absolute and relative grounds for the refusal of the mark.Stating if valid the already existing marks which are conflicting.After which a reply is to be sent with the contentions within a period of one month of the receipt of the report.
What if there is an infringement?
The consequence of choosing an already existing name, which has a registered trademark, would be of being guilty of trademark infringement. The Indian Trademark Act recognizes both civil and criminal proceedings in the event of an infringement. The most common reliefs granted are injunctions, (permanent or temporary), damages or account of profits, and even payment of the cost of the legal proceedings. The remedies are not limited to the above, and they can be as and what the court deems fit. In simple terms the plaintiff has a remedy to seek remuneration for the gains made by the infringing party by violating the plaintiffs rights over the trademark. An injunction is an order by a court to cease the continuation of a violation; the injunction could be temporary or permanent. A permanent injunction would mean that the business would have to be stopped with immediate effect, failing which it would lead to further legal complications.
With regard to criminal proceedings the offence is punishable with imprisonment for a term not less than 6 months and which can be exceeded to 3 years, as well as a pecuniary punishment of a minimum of Rs. 50,000 and extending to Rs.2 lakhs.
No one would like to be involved in a legal proceeding when starting a business. This not only affects a company’s reputation but also creates a bad aftertaste. Hence doing a background check whether a trademark exists on in the same name is the right thing to do. A lawyer on behalf of the startup can do the check, by going to the Trademark Office. Where there would be an online and offline check. It can also be done by oneself, online. Though a detailed offline check would be prudent. A systematic way would be to keep doing a Google search of the suggested names to see right at the inception, if the name is already registered as a trademark.
As important as it is to check thoroughly that there are no trademark violations by going through both the online and offline check, it is equally important to get the name registered, as soon as it is finalized, following the correct process and with legal advice. This would make it possible to sue another person in case of an infringement. It is advised to even register the name before the whole startup gets established, a name being a major part of the identity of the business.
Hence if you are on the road to starting the next big thing, it is not only important to look into the finances and logistics, but also equally important to look into the legal aspects including the intellectual property of the startup. The name being the first and the most important aspect. Hence when brainstorming a name, have an idea of how to register it handy and seek the expertise of an advocate when the time comes.
Also, avoid shouting potential names for your startup in a crowded café.