10 reasons for registering a trademark

There are numerous reasons why trademark registration is advisable and how this action can help entrepreneurs protect their brand while at the same time boost their performance.

Brand is what resonates with customers, signalling the proposition, quality, price and trust associated with a given product / service. In other words, it is the brand that is the main vehicle for distinguishing from others and achieving a competitive advantage. Based on the results of a survey conducted by Trama among 10,000 consumers, it is the brand that plays a key role in shaping the consumer choice, accounting for 24% of the consumer decision making process. Trademark registration offers an effective mechanism for protecting the uniqueness of this vital asset of any business.

A recent study carried out by CompuMark revealed that 85% of large corporations have experienced a brand infringement case over the last year. Trademark registration acts as a deterrent for copycats and it is the ® symbol that communicates a strong signal that the company is willing to protect own intellectual property. Moreover, the owner of a registered trademark has the right to issue “cease and desist” letters, discouraging these copycat attempts even further.

Quicker and cheaper resolution of any potential disputes and trademark infringement cases represents another key reason why trademark registration is strongly advisable and beneficial to companies, saving time, effort and costs.

Trademark registration represents a strong signal communicating trust and commitment to other business partners. Upstream business partners tend to value this form of intellectual property protection, allowing for the development of stronger relationships, without the fear of complications in the future. The benefit of trademark registration is even more significant in the context of downstream supply chain partners, with numerous suppliers (particularly in China) viewing trademark registration as a key requirement for collaboration.

An evaluation conducted by the Economist uncovered that over 20% of the market value of the 10 most valuable brands is derived from the brands themselves. Similar studies went even further, claiming that this figure can be as high as 30% (Millward Brown). As a result, brand protection in the form of trademark registration provides positive monetary value, signalling a positive message to the investors. Trademark registration is also increasingly becoming a key requirement for obtaining funding from investors as well as from crowdfunding platforms.

A registered trademark can be used to quickly resolve a hosting domain dispute, mitigating the risk of cybersquatting and ensuring that competitors cannot benefit from relying on similar commercial impression. Several domain hosting providers, such as GoDaddy, have already introduced automated conflict resolution mechanisms for trademark owners, providing a highly convenient way of resolving these potential issues. A similar argument applies to social media, with Facebook, Twitter and Youtube also providing automated conflict resolution processes to ensure that the desired account name for a registered trademark holder cannot be occupied by opportunistic individuals.

Google, as well as other search engines, provide automatic conflict resolution for suspected cases of trademark infringement. In practical terms, a registered trademark grants its owner an exclusive right to use the given keyword among search terms as well as product / service description, effectively discouraging any competitive tactics that seek to derive value from the good reputation of a given brand.

Registration of an identical or a similar trademark by a competitor may result in a cease and desist action taken against the entrepreneur. In the absence of a registered trademark, rebranding may become the only feasible option, resulting in substantial losses incurred in virtually re-starting the whole business. Trademark registration can be therefore viewed as a safeguarding mechanism against this potential risk.

The brand plays a key role in shaping employment preferences of job applicants. With the growing intensity of the war for talented individuals, brand protection in the form of trademark registration can be viewed as a positive factor in attracting future talent.

In addition to the aforementioned positive impact of trademark registration on establishing business partnerships, this form of intellectual property protection is crucial in growing through franchising. This form of a global expansion strategy is based on collecting royalties for the company’s know-how and the licence to operate under the renown brand. Trademark registration enhances the level of franchisees' confidence as well as the company's value.

With over 12 million new trademark applications filed each year, the rapid pace of trademark registration highlights the practical benefits derived from this action. Trademark registration provides protection for an extended period (10 years in most countries), after which it can be continuously renewed, effectively providing brand protection for life. The cost of trademark registration can be viewed as negligible in comparison to the loss of positive brand reputation, lost sales, rebranding costs and infringement lawsuits.