Trademark and Startups: 4 Frequently Asked Questions

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When starting a business I’m sure there are a multitude of questions that go through every entrepreneur’s mind. Barring the basic questions of whether or not to go ahead with launching something, on the trademark front there are a couple of questions that keep cropping up. In this post, I’ve covered 4 of the most common ones that I deal with.

When is it advisable for startups to register their trademark?

Registering trademarks should be an early milestone in a prudent business model. For startups, building a brand will most probably be on the top of their “To-Do List”, but in the mean time they must also not side-line the importance of protecting the brand. Businesses need to consider the importance of creating a recognizable and trustworthy brand, as well as legally protecting the same.

Startups should consider the fact that everything they’re investing into is that brand name of their business, so it definitely needs to be protected legally.

Another reason for filing a trademarks early is because for startups the name is very crucial in the founding stage itself, as more than 70% of startups pitch to investors with the name they started their business with.

Therefore, it is always advisable that an early filing is the best, as branding is important for any startup, protecting that brand should be too.

Do the customers or investors bother about a trademark registration?

Definitely! The purchasing decisions of consumers are influenced by trademarks and the reputation such brands represent. It is becoming increasingly important for businesses to have an understanding of why trademarks are important assets and help grow their business. Simply put, your trademark is the designation or brand for your company or your products and the customers associate that brand solely with you. Trademarks are often the most spontaneously searched articles on the internet by any user seeking information about your products or services.

Given the fact that a trademark helps the potential customers and clients to tell you apart from other competitors in the market, it becomes the crux of your business identity. No wonder investors too prefer funding businesses with an established trademark, as a registered trademark creates a sound name and a face value for the business and increases the credibility of your business in the market.

What protection do I possess for a trademark which I’ve been using for a long time but haven’t registered?

One of the most important advantages of having a trademark registered is that it provides the owner the right to initiate action for infringement of the mark. An absence of legal recognition for your trademark will give the other business entities a chance to drain away the reputation and goodwill accredited to your business and also to generate profit while riding on the back of your brand name.

The only way to protect an unregistered trademark is if the mark has extensive and prolonged usage. These unregistered marks may be protected by succeeding in an action of passing-off, where the court upholds the usage of the trademark. To succeed in such an action, it is necessary to establish that unregistered mark has comparable goodwill or reputation in connection with the product, service or business with which it is used.

So basically if your using an unregistered trademark for a long time, it is best advisable that you register it at once because even though you can win a case of passing off against an infringing mark it’s a bit more difficult than approaching the Court with a registration in hand.

Is an Indian trademark registration valid outside India?

No! The Indian trademark registration stops within the border and does not accord any rights to the proprietor outside the country. So, if you plan to sell your products or services internationally, consider referring to the laws of the particular country regarding registration of trademarks.

Can someone else register the same trademark as that of mine for an entirely different class of services or products?

Yes! The basic perception behind having a trademark registration is to distinguish the products or services of a particular person from the rest, so as to avoid a confusion or deception among the customers. So, someone could register a trademark same as yours and get away with it if the two marks deal with different products and operate in different markets, and the consumers are not likely to be confused.

Basically, trademark rights are limited to particular goods and services for which the registration is obtained for, therefore, there are chances that companies engaged in very different businesses may use the same trademark simultaneously.

One of the factors which the Courts look at to determine likelihood of customer confusion is whether the two businesses are in the same industry. The question in these kinds of circumstances is whether the goods or services offered by the two companies are sufficiently related such that a consumer would be likely to think a company providing the first product or service would be reasonably likely to provide the second product or service also. When the products are so unrelated that consumers are not likely to be confused into thinking that they come from the same source, the same trademark can be used.

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