Optimal trademark strategy for startups: What, why and when

Based on our years of experience in trademark registration and brand protection services, we have compiled a brief guide for an optimal trademark strategy for emerging companies.

By

Igor Demcak

Step 1: Innovative business idea and choice of a brand name

Every new business starts with an entrepreneurial idea. Whether it is based on your prior employment or a highly disruptive innovation, the idea itself often influences the choice of a brand name. Step 1 in our guide to the optimal trademark strategy for startups however suggests that even at this very early stage, it is highly beneficial to think about the registrability of the brand identity. This means that the name and graphical identity should not be too generic (e.g. software) but should be capable of distinguishing your products / services in the eyes of the consumers. At the same time, this approach towards brand identity creation enhances your chances for a successful trademark registration and effective brand protection in the future, once your initial idea has grown into a well-functioning business.

Step 2: Ambitions and method of financing

It is always beneficial to plan ahead and the development of an optimal trademark strategy is of a no exception to this claim. One of the initial decisions you may need to take revolves around the method of financing. In case you seek to approach investors from corporate funds or crowdfunding platforms, a registered trademark for your brand may in fact be an essential requirement for receiving the initial funding. At this stage, your ambitions should influence your choice of the scope of trademark registration. While a born global startup should seek at least a combination of the EU, UK and US trademarks from the very beginning, less ambitious organisations may effectively start with a national trademark.

Step 3: Early success

With the exception of enterprises that sought funding through corporate funds or crowdfunding platforms, most innovative startups seek trademark registration during the initial years of their existence, once they have achieved a measurable market success. An example can be made of AirBnB, the origins of which can be traced back to 2008, that has filed its European trademark application within the first two years of its existence, following initial success. A similar approach has been pursued by Uber, filing its European trademark application in 2011, two years after its establishment. The initial success provides a good indication that your business idea and brand itself are worth protecting, implying that it is the best time to think about trademark registration.

Step 4: Growth and global expansion

Analysis carried out by The Economist reveals that over 20% of the market value of the 10 most valuable brands is derived from the brands themselves [1]. At the same time, the growth of organisational profitability has been associated with an increased risk of infringement attempts [2], strengthening the argument for a trademark registration as the company expands. A particular consideration should be placed on the selection of countries and regions in which to protect the trademark, and gradually expanding the trademark protection efforts alongside the global growth of the enterprise.

Step 5: Mitigating infringement attempts

Fame attracts envy, the evidence of which can be found in the fact that over 85% of large companies have experienced a case of infringement in the last year [2]. Continuous monitoring of any infringement attempts is essential to effectively protect your brand. Although the mere registration of a trademark is a significant deterrent to copycat attempts, the need for issuing cease and desist letters and pursuing legal actions may in fact be necessary to fully protect your brand.

Team Trama has vast experience in providing comprehensive brand protection services that start with trademark registration and continue with ongoing trademark monitoring and case resolution. We are here to support all the way, always prepared to meet your growing needs.

[1] The Economist (2020), “It has never been easier to launch a new brand”, available from: https://www.economist.com/business/2020/01/23/it-has-never-been-easier-to-launch-a-new-brand

[2] CompuMark Research (2020), “Trademark infringement rising year-on-year, says CompuMark report”, available from: https://www.prnewswire.com/news-releases/trademark-infringement-rising-year-on-year-says-compumark-report-300986014.html

Igor Demcak

Igor Demcak

Trademark Attorney

Filed over 150 trademarks as a trademark attorney

UPJS Kosice

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