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Aleck Ncube
A TRADEMARK is a sign capable of distinguishing the goods or services produced or provided by one enterprise from those of other enterprises. Any distinctive words, letters, numerals, drawings, pictures, shapes, colours, logotypes, labels or combinations used to distinguish goods or services may be considered a trademark. In some countries, advertising slogans are also considered trademarks and may be registered as such at national trademark offices.

What are trademarks for?

The main function of a trademark is to enable consumers to identify a product (whether a good or a service) of a particular company so as to distinguish it from other identical or similar products provided by competitors. Consumers who are satisfied with a given product are likely to buy or use the product again in the future. For this, they need to be able to distinguish easily between identical or similar products.

The value of trademarks

A carefully selected and nurtured trademark is a valuable business asset for most companies. For some, it may be the most valuable asset they own. Estimates of the value of some of the world’s most famous trademarks such as Coca-Cola or IBM exceed 50 billion dollars each. This is because consumers value trademarks, their reputation, their image and a set of desired qualities they associate with the mark, and are willing to pay more for a product bearing a trademark that they recognise and which meets their expectations. Therefore, the very ownership of a trademark with a good image and reputation provides a company with a competitive edge.

Why should your SME protect its trademark(s)?

While most businesses realise the importance of using trademarks to differentiate their products from those of their competitors, not all realise the importance of protecting them through registration. Registration, under the relevant trademark law, gives your SME the exclusive right to prevent others from marketing identical or similar products under the same or a confusingly similar mark. Without trademark registration, your investments in marketing a product may become wasteful as rival companies may use the same or a confusingly similar trademark for identical or similar products. If a competitor adopts a similar or identical trademark, customers could be misled into buying the competitor’s product thinking it is your company’s product.

This could not only decrease your company’s profits and confuse your customers, but may also damage the reputation and image of your company, particularly if the rival product is of inferior quality.

Given the value of trademarks and the importance that a trademark may have in determining the success of a product in the marketplace, it is critical to make sure that it is registered in the relevant market(s). In addition, it is much easier to license a registered trademark to other companies, thus providing an additional source of revenue for your company, or may be the basis for a franchising agreement. A registered trademark with a good reputation among consumers may also be used to obtain funding from financial institutions that are increasingly aware of the importance of brands for business success.

Protecting trademarks

Trademark protection can be obtained through registration or, in some countries, also through use. Even where trademarks can be protected through use, SMEs are well advised to register the trademark by filing the appropriate application form at the national trademark office. Registering a trademark will provide stronger protection, particularly in cases of conflict with an identical or confusingly similar trademark. The services of a trademark agent are often very useful for the registration of a trademark.

Is the registration of the trade name of your company sufficient?

Many SMEs believe that by registering their business and its trade name at the registrar of companies, this name would also be automatically protected as a trademark. This is a rather common misconception. It is important to understand the difference between trade names and trademarks. A trade name is the full name of your business, such as: “Mungas Investments Ltd” and it identifies your company. It often ends with Ltd, Inc. or abbreviations that denote the legal character of the company.

A trademark, however, is the sign that distinguishes the product(s) of your company. A company may have various trademarks. Companies may use a specific trademark to identify all their products, a particular range of products or one specific type of product. Some companies may also use their trade name, or a part of it, as a trademark. They should, in that case, register it as a trademark.

Who is authorised to apply for trademark registration?

In general, any person who intends to use a trademark or to have it used by third parties can apply for registration. It can be either an individual or a legal entity. While it is not compulsory, it is highly advisable, as registration provides the exclusive right to prevent unauthorised use of the trademark.
What are the main reasons for rejecting a trademark application?

While selecting a trademark it is helpful to know which categories of signs are usually not acceptable for registration. Applications for trademark registration are usually rejected on what are commonly referred to as “absolute grounds” in the following cases: Generic terms: For example, if your company intends to register the trademark CHAIR to sell chairs, the mark would be rejected since “chair” is the generic term for the product.

Descriptive terms: These are words that are usually used in trade to describe the product in question. For example, the mark SWEET is likely to be rejected for marketing chocolates as being descriptive. In fact, it would be considered unfair to give any single chocolate manufacturer exclusivity over the word “sweet” for marketing its products. Deceptive trademarks: These are trademarks that are likely to deceive or mislead consumers as to the nature, quality or geographical origin of the product.

Marks considered to be contrary to public order or morality. Words and illustrations that are considered to violate commonly-accepted norms of morality and religion are generally not allowed to be registered as trademarks. Flags, armorial bearings, official hallmarks and emblems of states and international organisations are excluded from registration.

Applications are rejected on “relative grounds”. When the trademark conflicts with prior trademark rights. Having two identical (or very similar) trademarks for the same type of product could cause confusion among consumers. Some trademark offices check for conflict with existing marks, including unregistered well-known marks, as a regular part of the registration process, while many others only do so when the trademark is challenged by a third party after publication of the trademark. In either case, if the trademark is considered to be identical or confusingly similar to an existing one for identical or similar products, it will be rejected or cancelled, as the case may be. It would, therefore, be wise to avoid using trademarks that risk being considered confusingly similar to existing marks.

Selecting or creating an appropriate trademark is a critical step, as it is an important element of the marketing strategy of your business. In the next write up, I give a step by step process of registering a Trademark.

-Aleck Ncube is an Intellectual Property Scholar. He can be contacted on [email protected] or follow me on Twitter: @aleckncube