Author : Akshatha Deepak

Importance of trademarks in businesses

Form ancient times humans were creating and innovating things during pre historic period they
were creating hunting equipment, jewellery, vessels etc and originally there were marks placed
on it to identify its ownership and as a caution from thieves but before that businesses lacked
a unique distinguishable identity among themselves which caused confusion among the
consumers. Several businesses who have earned their name in particular fields because of their
hard work, creativity and talent have also been victims in losing their potential consumers, this
was due to multiple business that would be in existence in the same field with the similar names
which would cause difficulties among the consumers in identifying the authentic one resulting
in loss of business for the original business owner and a loss for the consumer as well because
they would have been mistaken by the similarity of the product/service and wouldn’t have
received the product or service they were expecting.

Trademarks thus play a crucial role in businesses in this era and in future, consumers identify
businesses with trademarks with a single glimpse at times, without even reading their names
they are able to identity the brands and know what its all about because trademarks serves as a
unique marker of identity, for example the very well known brand Nike, consumers are able to
identify the brand by just looking at the logo at times.

A trademark could be in the form of any word, symbol or device that helps in distinguishing
itself from others. It can take years for a business to get established and recognised by
consumers so when it does get established it is important to protect it from others using its
identity, trademarks protects the consumers from getting deceived for example Ferrari is a well
known luxury brand for sports cars and if a manufacturer of a less known and inexpensive car
decides to affix the brand Ferrari on it and sell his product then that would cause Ferrari’s
reputation to be at stake as the other manufacturer may be selling a low quality product and
will confuse the consumers into thinking that is actually Ferrari, due to this possibility it is
good to register the trademark of the business so that in an event of another business trying to
use a similar or same name or identity then a legal remedy would be available to stop it from
taking place. Start-up’s gets their brands protected with trademarking, by marking their
company name, product or service they can portray their distinctiveness from the rest of the
products or services available in the market of the competitors. In the way the start-up’s with
the help of trademarks are also preserving a reputation for the people to work with them in
future during expansion of the company. If the company is intending to grow then more
employees is a must and with a registered trademark the company will have a protected positive
reputation and that would help in attracting such interested people as employees and will reflect
in there morale. When a company with a registered trade mark does its expansion into other
fields it will be easier for them to get established in that field and saves them from the staring
troubles faced as a new company entering a market because consumers would easily identify
them with their existing reputation in the field they registered their trademark and may be well
known already, in such cases the consumers will already be having a trust towards that
company and will expect good service or products from it.

By registering a trademark the owners are gaining exclusive rights to prevent third parties from
creating or marketing identical names that would confuse the consumers. A registered
trademark can last for a very long period provided it is renewed on time, it can be considered
as an asset as it can also be sold or licensed and can provide as a source of income in future for
the owner of the rights, they are also capable of attaining funds from financial institutions if
it’s a registered trademark because in a case where the company name is not protected by a
trademark, many banks would not let them register a business account in that name. Some
banks will permit a DBA, or “doing business as,” arrangement. DBAs produce a fictitious
business name that is registered but do not offer the same level of legal protection as a
trademark.

Additionally, trademarking grants legal ownership in particular jurisdictions, whether
municipal, state or throughout the country. With a trademark, the company is able to maintain
the sole right to identify their goods; no one else is permitted to use their logo, name, or tagline.
Not registering a trademark would leave the company at risk of loosing everything they have
built if another company registers with that trademark later. If such a scenario comes up later
on it may lead to a lawsuit and cause more troubles for the company to get the rights to its identity.

Whereas, companies with registered trademarks have several remedies for
infringement for instance a mark cannot be registered if it is identical to a registered trademark
in all the classes of goods and services, if they try to then the infringing trademark can be
removed and prevented from doing the same, punitive damages can also be imposed on the
invaders who tried to infringe.

Therefore when a start-up is first starting out, trademark registration need to be one of the top
priorities. It will safeguard a company from the start, ensuring long-term growth. In order to
establish a competitive advantage and prevent future financial losses, trademarks are crucial.