Trademarks – Part of the Formula for Successful Business

Why is it important for the business that trademarks be registered?

The old maxim goes that a person first works for their name, then the name works for them. This rule applies in full force for the business. Establishing a new manufacture or going through the first steps of a new company is no easy task – finding a new idea, researching the market, creating a business plan, investing funds – personal or through credit, covering the regulatory requirements for the activity, forming a team, conducting multiple contracts with third parties, etc. If the initiative bears fruit, it is not by coincidence. It comes at the price of the undertaken risk, entrepreneurial skills, vision and hard work. We cannot overlook a very important part of the formula for success – the significance of the trademark.

What is a trademark?

The trademark is a distinctive mark of a good or service which a merchant offers and with which the latter is popular for and is distinguished from the rest of the competitors in a line of business. The trademark can contain letters, numbers, drawings, figures, colors and their combinations, and even sound signs. The aim is that it is unique and recognizable. An easy example for visualizing a trademark is to imagine the logo of Nike – the particular font plus the horizontally placed comma.

Why is it important that you register your trademark?

The trademark registration serves as protection for the owner against unfair competition and rip-offs which are deliberately manufactured to externally resemble the original and thus mislead the consumers into buying goods that they think are original.

Let us see the following example – a confectionery manufacturer releases on the market a wafer named “Choco Time”. The wafer is sold in a blue non-transparent package with its name spelled in white with a specific font. The manufacturer gives their best. They bought a good recipe, they use quality products, advertise, the production is always fresh, etc. Due to the product’s quality and its creative advertisement the wafer is enjoyed by the consumers and quickly establishes on the market. At this moment another manufacturer decides to “hop on the train” of success without carrying any risk and without investing as the first manufacturer. The dishonest competitor changes up “Choco Time”’s vision with the difference that the package is semi-transparent but they keep the name spelled the exact same way. However, the wafer’s quality is significantly lower and thus it is offered at a better price. After they taste the wafer with lower quality without knowing it is not the original “Choco Time”, the consumers are left disappointed and lose trust in the product. Therefore a drop in sales occurs for the first manufacturer and they are unable to cover the investment expenses. A timely reaction is needed on their behalf and a key point is the presence of a registered trademark with the name of the product.

In order for such unfair competition to be avoided, the merchant has an opportunity to register the trademark “wafer in a blue non-transparent package with the name “Choco Time” written in white and in impact font” before they begin investing funds in buying a recipe, manufacturing, advertising and etc. This way when the product is released on the market they will be assured that their trademark will give them protection against anyone who decides to manufacture wafers or any other confectionery with the brand “Choco Time”.

The registered trademark gives its owner the right to forbid its usage by third persons. The registration gives protection when there are attempts to copy a distinctive mark, vision, or to use the same image with the intention to mislead consumers. If the dishonest competitor fails to comply with these restrictions, the trademark owner may seek redress.

No trademark registration could lead to other problems – someone else could get ahead of us. For example, a merchant has been using a trademark for years which contains their company name but is not duly registered. At the same time they notice that a new competitor has appeared on the market and is using the same trademark. After a verification they find out that the new merchant has registered the trademark. In certain cases the affected merchant has the right to request the deletion of the already registered trademark relying on the “first in time, first in right” principle.

How and where is a trademark registered?

Anyone can apply for a trademark registration in a particular territory. If the merchant sells their products only in the Bulgarian borders, he has to declare his trademark protection in the territory of the Republic of Bulgaria before the Bulgarian Patent Office. If they trade in the European Union they should declare protection in the whole EU with the help of EUIPO (the EU Intellectual Property Office). Of course, there is a possibility to apply for protection in any country in the world as long as this is economically justified and beneficial for the merchant. However, it is impossible to register a global trademark with coverage for the whole world.

The requirements for registering a trademark in the Bulgarian Patent Office, the EUIPO or in any other country are similar. The main attribute which a trademark must have is uniqueness that is to say that the trademark must be one of a kind and must not resemble already registered trademarks. The procedure on registering is a process with many phases which can take from 6 to 12 months. The trademark protection comes into being at the moment of submitting the registration application not the date of the registration itself. Once registered, the trademark is under protection for a period of 10 years. The registration can be renewed unlimitedly for next 10-year periods.

What are the main restrictions when registering a trademark?

A trademark which does not have a distinctive nature or is comprised of signs and symbols, common in the spoken language or in the established commercial practice cannot be registered. The same goes for trademarks which comprise of signs and symbols indicating the type, quality, quantity, geographical origin and similar information about the goods as well as trademarks comprised of coat of arms, flags, symbols of countries and their imitations.

It should be noted that a registered trademark cannot be changed or rounded out. That is to say that if the merchant’s trademark evolves in time every change means a registration of a new trademark. For example, the technological company Apple has stylized an apple in its logo – every change is connected with a new registration. This is not a problem since there are no restrictions regarding the number of trademark registrations of one person/entity.

Monitoring for protection from new competition

There is an option for monitoring an already registered trademark – the service can be declared from a trademark owner for a fee. This is the observation by professionals of the whole stream of new trademark applications for timely reaction and avoidance of registration of similar brands that could mislead consumers and thus harm the merchant. The trademark owner has the right to submit an appeal against any declaration for registration they consider to be violating their rights. This way the owner initiates a proceeding before the Patent Office which resolves the dispute with consideration to the rightness of the parties.

In the modern day competitive business environment the trademark registration is an important element of the formula for a successful business. Practice shows that the timely and professional trademark registration does not only increases the owner’s dividend, but also often spares them resources, time and headaches. 

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Author: Hristo Hinkov, Attorney-at-law