Please note that all information below pertains only to US-based businesses.
In industries where there is strong competition, companies strive to differentiate themselves from their competitors. One of the most important differentiators is branding. A brand encompasses many of the external interactions that a company has. Are employees motivated because the company treats them well? Are customers happy because the company delivers excellent quality and customer service? Are vendors happy because the company is good to work with and makes payment on time? The more that external stakeholders like your company, and hence the brand, the easier it is to increase profits and reduce costs.
Every year, BrandZ and Millward Brown Optimor calculate the value of brands based on their global value. Number one in 2012 was Apple, with a brand value of $185B. Google and IBM round out spots two and three, with brand values of $113.7B and $112.5B respectively. The first step to establishing a valuable brand is to consider the implications of acquiring a trademark for your business.
First of all, is it necessary to have a registered trademark to operate a business? It is not, because just by using a trademark in a certain geographical region, you will have common law rights to this trademark. Let us use the example of a company called Infineon Design, a company that offers graphic design services in the states of California and Oregon. Because you are already in business, even if another company registers the Infineon Design trademark later on, they cannot force you to change your name. However, it is completely possible that a company in Florida could start using the Infineon Design name. If you do not have a registered trademark, you cannot stop them from using your trademark, even though they are not related to you.
There are a number of benefits from registering a trademark, which will be enumerated below. The cost of registering trademark, including legal fees if desired, will tend to be in the hundreds of dollars, so the benefits of having a registered trademark will oftentimes outweigh the costs.
Nationwide Rights
By owning a registered trademark, you will have the right to expand your company and utilize your trademark nationwide. New companies will be unable to use your trade mark, although you may want to research to find if there are companies already using your mark on a common law basis.
Securing Domain Names
When consumers look for information about a company, they expect to find a .com domain name that matches your company. For instance, InfineonDesigns.com would be an expected website for our aforementioned design company. What happens if somebody has already registered your domain name? If you own the trademark, you can start a dispute via the Uniform Dispute Resolution Procedure (UDRP). You can also file a lawsuit in a Federal Court to try to seek the transfer of this domain name. Historically speaking, UDRP arbitrators have looked very favorably on trademark owners.
Working with Distributors
If you want to work with resellers or distributors, owning your trademark will help you control your brand. If you neglect to register your trademark and a reseller registers it first, the reseller will be able to force terms on you in order for you to continue using your own trademark. They could for instance prevent new product from being shipped into the country, or they can license the trademark rights to 3rd parties.
US Customs Enforcement
Once your trademark is registered, you can register your mark with the US Customers and Border Protection service. Once registered, Customs officers can block goods from entering the USA if they bear your registered trademark but are not authorized by you.
Enforcement in US Courts
Sometimes it is necessary to file a lawsuit against entities who are using your trademark without protection. If you have a registered trademark, then the burden of proof is on the infringing party to show that they are using the trademark legally. If you do not, then you will need to prove that your trademark is valid and that the other party is infringing upon your rights. In addition, US trademark law defines remedies for willful infringement, which may include monetary compensation on damages, and repayment of attorney fees.
Use of the Circle-R symbol
Once companies have a registered trademark, they are able to use the ®symbol as part of their logo. TheTMtrademark logo on the other hand can be used whether or not the trademark is registered.
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