The basics of IP: Trademarks
Ludwig Lindermayer is a patent and trademark attorney at PAUSTIAN & PARTNER. In a series of thought leadership pieces, he outlines the basics of intellectual property and how best to protect them as a startup.
As the last session was about the sometimes quite "dry" patent topic, in this session on IP, we will have a look at a more vivid topic: trademarks.
What are trademarks?
A trademark may consist of any signs, in particular words, including personal names, or designs, letters, numerals, colours, the shape of goods or of the packaging of goods, or sounds, that distinguish the goods or services of one undertaking from those of another.
If you have a sign that makes people think of your company when they see it, you might already have a trademark. Famous examples here are a certain "swoosh" of a sports company, the triangular shape of a chocolate bar, the shape of a glass bottle -even when it is not filled with the dark and sweet beverage- and red soles on high heels.
Without mentioning the companies' names, almost everybody knows who I am talking about. And this is exactly what a trademark is: People see it and think of your company.
The only limit is that it needs to be represented in the register clearly and precisely. That is why a smell-trademark for golf balls (the smell was freshly cut grass) did not enter the register, because it could not be represented clearly and precisely.
Of course the possibilities of what can be registered vary between jurisdictions.
There are multiple possibilities for how to register a trademark: nationally with the office of the corresponding country or regionally (like an European trademark EUTM) or internationally (making it easier to bring your trademark to many countries). Tonnes of different rules and laws apply here so we better leave it at this or we might get lost in the IP-rabbit hole.
In order to apply for a trademark you need your sign and your list of goods and/or services you want your sign to protect. This list is structured by the so-called "Nice Classification". A classification of 45 classes ( 1 to 34 for goods and 35 to 45 for services) that covers each and every imaginable good and service. As the classification was established 1957, it is a living document since many goods and services that are in the classification today were not imaginable back then (internet, 3D-printing, etc.). Accordingly, the classification develops with time and each new good or service will find its place in one of the 45 classes. The number of classes is usually highly influential for the costs of a trademark application.
If you have found your sign and determined your list of goods and/or services as well as the office you would like to file your application, you usually have two hurdles to take during the registration process:
Your sign must not be descriptive for the goods and/or services you want it to be protected for; and
There must not be an older trademark that could be confused with yours.
Here is where there are many case laws all over the world so I will only talk about each point in principle. If you want to register the word "milk" for your goods "beverages; yoghurt" and the service of "smoking fish" you most probably will run into problems as your sign will be perceived as being descriptive for your claimed goods and/or services. Or another example: A bitten apple as a sign would certainly cause problems for "fruits", however, not so much for mobile phones or computers.
If you try to register a bitten pear for mobile phones and computers, you most likely will have problems with point two above.
Trademarks are certainly the intellectual property rights (IPR) where startups can do at least a fair part of the preparative work for an application themselves.
Benefits of trademarks:
- Trademarks are rather inexpensive: Take an application for a European Trademark (EUTM), in the simplest case it will cost you EUR850 for basic office fees for a trademark application in one class. If said application is registered, you get protection for the entire EU with just one application. Please be aware that every EUTM has a hole right in the middle: Switzerland.
- You can get trademarks quickly: While patents can take several years, it only takes a few months to obtain a trademark.
- Judges are jurists: Comparing pictures is easier than understanding technical descriptions. The trademark will be a lot more efficient time-wise when enforced. Compared with all the hoops you have to jump through in a patent infringement, trademark procedures are usually considerably less of a hustle.
- The toolbox of trademarks is packed: Be creative and get broad protection. You can get protection for all sorts of crazy ideas: words, logos, colours, the places you put your name, the shape of your product or packaging, sounds, etc.
- The trademark is the Highlander among the IP-rights: It can live forever. If you take good care of your trademarks, they will never lose their edge. Your trademark attorney has all the care instructions.
Of course, not all is easy going with trademarks. There are some points to consider:
Use or loose : Trademarks have to be properly used and said use needs to be well documented for a potential need in a trademark dispute later on. In daily life, this can cause quite a lot of problems.
Nourish and flourish: Trademarks need care. For example, they need to be properly used and they need to be protected from being diluted. Again, ask your trademark attorney for care tips.
Better safe than sorry (and broke): Register more rather than less. This holds true for goods and services and countries. It is very expensive to have proceedings for example in a country where your trademark was registered too late and was "grabbed". It’s considerably cheaper to apply for one country or class too many, than miss one that turns out to be needed and was left out "for saving money".
Trademarks are sometimes considered not as valuable as patents, especially among startups and technology SMEs, which – in my opinion – is very wrong. Trademarks protect the names and sometimes even the coolness a company makes its money with. A successful brand is not possible without trademarks as they help to protect your investments in marketing.
The golden rule is: If you earn your money with a sign (this starts with the company name / logo) the IPR should belong to you.