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To register or not (Part II/II): 5 Reasons why you should register your trademark

25/03/2021

In this series, we explain why you should conduct a proper analysis before each trademark registration. While in Part I we focus on reasons why it does not always make sense to register a trademark, we will show you today when and why you should register your trademark. 

1. It gives you the freedom to operate 

One of the main reasons even smaller businesses opt for trademark protection: You can sleep easy when using your brand. You do not have to be afraid of third parties claiming your brand infringes their trademark rights because a trademark grants you the right to use it for certain goods or services. Even an unjustified claim for trademark infringement (and those are pretty common) is an unneeded distraction and can result in high legal costs. An even worse outcome could be that the claim indeed is justified, which might even lead to a need for rebranding and claims for damages. A registered trademark lets you shrug off such claims easily.  

2. You deter others from registering similar trademarks 

The second benefit you get with the registration is deterrence and often you don’t even have to do anything for it: People who want to find a new name for their business or product will generally search potential names on the internet, and often they end up on the websites of trademark registries. If they see your trademark, they will normally refrain from using your brand because they want an individual brand for themselves and know they could get into legal trouble. The registration provides your brand with improved visibility and thus prevents others from trying to use or register confusingly similar marks. 

And even if they do not notice your registration and simply start using your trademark: As long as you get aware of their use, you can simply write them a letter and let them know they infringe your rights. If you can attach an official trademark registry excerpt to such a letter, you will be in a much stronger position and the recipients will think twice whether they want to continue infringing your rights. 

3. You can enforce your rights easily 

Of course, there will always be bad-faith actors. People may intentionally copy your brand or use confusingly similar signs for their products or services to profit from the reputation you built up already. Or they might infringe your rights because they accidentally came up with the same brand and now refuse to rebrand even though you had the brand first. 

In such cases, a trademark will be extremely valuable. A registered trademark strengthens your negotiation position and often is the decisive factor if court action is inevitable. Especially if you use your brand in connection with goods, a trademark can be priceless. 

If you suspect the import of goods that would infringe your trademark, you can apply for assistance at the Swiss Federal Customs Administration. They are authorized to act for you if it is suspected that transferred goods would infringe your trademark rights in Switzerland and can refuse the clearance of such goods.  

Nowadays important as well is the power of private market players: Online marketplaces like Amazon or social media giants like Facebook or YouTube remove listings infringing your brand relatively easily if you can prove the ownership of the trademark. If you cannot prove ownership, however, you might have a pretty hard time getting such unwanted content removed. 

4. It helps you build up your brand 

For many companies, brand building is the most important reason to register a trademark, especially if they are in the B2C-business. 

A trademark ensures you have exclusive rights to your brand for certain goods and services and if you intelligently defend your scope of protection, you can ensure that no one else uses a brand confusingly similar to yours. Having a clever strategy to protect your trademark is one of the most important parts of brand building. A trademark guarantees you the right to take legal action and potentially claim damages from infringers. Through regular monitoring of the relevant trademark registries and the market in general as well as through the prosecution of infringements you can defend yourself against the dilution of your brand. 

A trademark is basically a representation of everything your brand stands for. It not only plays an important role to attract consumers to your products or services but it also guarantees the quality and value of your offerings. 

5. You can monetize it

A trademark is a valuable business asset – it can be used to generate income in various ways: 

  • Exploit your brand value: if you place your trademark on a product, users who are familiar with your brand know what they can expect of this product, even if they never used this specific product before. Therefore, a trademark can significantly increase the value of your whole product portfolio: think for example of the vacuum cleaner producer Dyson who managed to successfully expand its business to hand dryers and hair stylers. 
  • Generate licensing revenue: if you do not want to expand your product line yourself, but still want to generate additional recurring income, you may think of licensing your trademark to others. Starbucks coffee shops, for example, lose revenue during the pandemic as people work from home and don’t get their daily coffee from their stores. In a smart move, they licensed their trademark to Nestlé, who now produces Starbucks-branded capsules for your home office coffee machine, of course not without paying generous royalties to Starbucks.   
  • Trading: you can also sell your trademark. Such transactions are often part of larger acquisitions, but it’s also possible to transfer only a single trademark. Needless to say, such a trademark ideally has a strong brand identity. Coca Cola for example did not only buy the mineral water manufacturer Valser to acquire their technical know-how and access to its water sources, but it’s fair to assume that the great brand reputation incorporated in the Valser trademark played a vital role in its decision to buy the Swiss firm. 

Conclusion

While there are situations where trademark registration isn’t recommendable, trademarks can be an extremely valuable business asset and a registration at the right time can save you a lot of money and nerves later on. It guarantees you the freedom to operate under your brand and protects you against the claims of others. Moreover, you can use it to gain a certain level of exclusivity and build up your brand. And last but not least, you can use trademarks to efficiently turn your brand into profit, be it through licensing or trading. 

It is a complex cost-benefit analysis to assess if and when a company should register a specific trademark. While there are a few rules of thumb, e.g., that in B2C it often is more important than in B2B, an individual assessment of each case is the best way to see whether it is worth the investment. You can do an internal cost-benefit calculation which includes the registration fees and future costs for defense strategies or let an expert do it. The most important step, however, is to recognize the need to do a proper assessment and ask yourself whether you should register or not. 

By Thomas Kuster

Legal Counsel

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