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Entrepreneurship 2019-05-20

Importance and Benefits of Securing and Protecting Trademarks for Entrepreneurs

The understanding of trademark is important for entrepreneurs to excel in and expand their business.

By Senior Sub-editor
Importance and Benefits of Securing and Protecting Trademarks for Entrepreneurs

In the inventing world, a lot of attention is paid to patenting new inventions. Often overlooked is the power of a trademark ̶ a wonderful communication tool that can provide great value when it comes to protecting your brand name or product. Protecting your brand via a trademark is the first step towards establishing your brand. Simply speaking, a trademark is a unique word, symbol, letter, name, or logo used to distinguish one’s goods from the goods of another. Trademark protection allows the trademark holders to restrict others from using their mark or symbol without permission. A properly defined, registered and protected trademark can act as a great utility for a rising company that is fighting to establish itself and expand its market share. Before registration, a trademark search is generally conducted to find whether another competitor already has secured the same or similar trade name, which can cause confusion to the general public. The strength of your trademark depends upon the type of trademark you are using. An arbitrary or fanciful trademark is the strongest category of the mark that can be protected. Suggested marks are the next strongest category that doesn’t require the owners to establish secondary meaning, like trademark “Sun Maid” used for raisins. Distinctive marks require the owner to demonstrate that the public associates that particular mark with the goods of the specific producer (secondary meaning). The names like Holiday Inn (for motels) fall in this category as they are descriptive but nevertheless registered as they are distinctive.

The number of trademark applications filed in India in recent years has been at least 4 times the number of patent applications filed. It is observed that from 2005 onwards the registration for marks has shot up and an overall increase has been observed throughout the years since then. As much as 50% more trademark applications are being filed in the present time compared to what was happening 7 years back. A startup Indian program was also launched by the Indian government in 2016, which provided 80% fee concession in patent and 50% in trademark filing. The scheme includes providing facilitators to startups for filing/processing of their applications for patents, designs and trademarks and reimbursement of professional charges to facilitators.

The understanding of trademark is important for entrepreneurs to excel in and expand their business. Trademarks are powerful communication tools, as it can convey intellectual attributes and messages about you, your company and your company’s products and services with one symbol. The market is overcrowded with competitors and it becomes difficult for customers to find the best brand. By protecting your goods with a trademark you can attract customers and help in building a good reputation in the market. Trademark brings a long-term competitive edge to a business as it builds up an image among its customers and challenges other brands to provide better quality products.

The steps for obtaining a trademark registration in India involve the stages of filing, examination, publication, opposition, registration and renewal. After the trademark application is filed, it is examined by the registrar according to the provisions of the Trademark Act. After proper examination, the application is ordered for advertisement/publication in the Trademarks’ Journal. After the publication of the application in the Trademarks Journal, any person can oppose the registration by filing a notice of opposition with the registry within a certain time period. The application then proceeds to registration where no notice of opposition is filed against the trademark and subsequently it is decided in the favour of the applicant. The mark is registered for the period of 10 years from the date of filing and has to be renewed at the end of each 10-year period.

India recognizes common law trademark system, so in principle, the business names that are not registered per se can also be protected. The limitation of the common law trademarks is that they are only restricted to the geographical area, and cannot be extended. A passing-off action arises when an unregistered trademark is used by someone who is not the proprietor of the said trademark, in relation to the goods and services of the trademark owner. Passing off is a tort actionable in India under common laws and is used to protect the goodwill attached with the unregistered trademarks. A passing off case in India of Britannia Industries Ltd. vs. ITC Ltd in 2017 where the respondent, ITC Ltd, filed the civil suit against the appellant, Britannia Industries Ltd, for passing off and infringement of copyright of the trade of respondent’s product ‘SunfeastFarmlite All Good’. As per the respondent, the appellant’s product ‘Nutrichoice Digestive Zero’ had a packaging (trade dress),which was deceptively similar to respondent’s product packaging of ‘Sunfeast Farmlite All Good’. Reportedly, both the products were being sold in the colour combination of yellow and blue. After hearing arguments, a temporary injunction in favour of the respondent was granted as interim relief. High court of Delhi witnesses almost 60% of all forms of IP litigation cases every year and, on an average, almost 50% or more are related to infringement of trademark, trade dress or passing off.

While startups are constrained with paucity of funds, a carefully crafted IP strategy can help optimise the ever-present cost vs benefit balance, which can provide far reaching benefits to a startup in the longer run.

This article is contributed by Mr Amit Aggarwal is the Co-Founder and Director of Effectual Services .

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