According to the report prepared by the World Intellectual Property Organization [1], an estimated seven million trademark applications were filed worldwide in 2016 – over twice as many as in 2010.
There is a rapid upwards trend which shows that entrepreneurs are increasingly investing in protecting their own brands. Why? Due to the relatively inexpensive manner in which they can battle with unfair competition and raise the prestige of the company. Large companies often react to attempts of impersonation of their brands. This threat can come not only from significant competitors, but also small companies which are not usually a threat to them. In practice, registering a sign as Intellectual Property (IP) is an extremely effective weapon against any potential violations.
As the owner of a sign, you can be confident that you are not violating the rights of another company. You should never run the risk of using signs illegally, otherwise it could involve the loss of hard-earned recognition on the market.
Before your mark is registered and protected, you will need to collect some key information that will allow you to proceed through the whole process, and numerous regulations, relatively painlessly.
1. Is it worth registering your own trademark?
Statistical data from the World Intellectual Property Indicators report shows that, yes, it does. Consumers are much more willing to reach for products and services of brands with an established position on the market. This trend heavily influences modern marketing tools. Mark McKenna presents the mechanisms of consumer behaviour towards a reputable company in his book ‘A Consumer Decision-Making Theory of Trademark Law’. McKenna states that a customer who trusts a company will rarely say “I’m checking!”. If we do not want other companies to use our hard-earned reputation, it is worth protecting these values.
Apple, the international mobile electronics company famous for its aggressive policy towards unfair competition, are a good example of the potential difficulties faced in international trademark registration when they attempted to register the iPad in China. A few years before the creation of the iPad, a Chinese company registered a phonetically identical trademark. It was made in good faith at the beginning, as this was how the company marked its equipment. However, it emerged that this trademark was completely blocking the Chinese market for Apple. After many long court battles, an agreement was reached and the sale of the trademark took place for 60 million dollars.
2. What type of sign to choose?
Firstly, we need to define the territorial scope of which we are interested. Theoretically, protection can cover the whole world, but it is worth considering whether this is necessary. Global enterprises such as Coca-Cola or Apple can easily justify worldwide coverage, but for smaller companies, covering the whole world will most likely prove to be too expensive and problematic. What are our options?
- Register the trademark only in one country. For this purpose, we can go to the national patent office.
- Obtain protection throughout the European Union. This application must be done at the EUIPO. [3]
- Protection may also cover a selected bundle of countries around the world. This can be obtained at WIPO. In this procedure, the protection of an already registered trademark is extended. Therefore, it is possible to initiate an international procedure if you already have a registered trademark regardless of whether it was inside, or outside of the EU.
The application to WIPO starts the registration process in each of the countries that you indicate on the application. It is the patent office of each individual country that grants permission to register. It is possible that you will only get protection in some of the countries applied for. It is worth noting that the WIPO procedure does not apply to all countries in the world – only around 100. In this article I am going to focus on EU area. [4]
Once we make a decision on the extent of territorial protection, we must consider the type of sign required. The two most popular types are:
- Word mark – This is aimed at protecting the phonetic layer of the sign. The method of writing is not relevant. This is a strong type of sign, therefore no one else can use a name that is identical or similar in any way. However, it is more difficult to obtain consent for the registration of such a sign. It must clearly demonstrate its uniqueness and, in addition, the protection will not cover the logo.
- Figurative mark containing word elements. Protection covers both word and graphics. This makes it more difficult to challenge possible violations. It is not enough to only have the word itself, but it must always appear in combination with a specific graphic. The sign is, therefore, weaker than the word mark, but it is easier to get permission to register.
It is possible to simultaneously sign a word and a word-graphic mark, which guarantees the most complete protection. If you’re curious about the other types, see the link here.
3. How to proceed with a trademark examination?
A well-conducted examination is successful in more than 50% of cases. It involves the analysis of characters that are in the databases in terms of similarities to our sign. The chosen patent attorney can take care of the examination. This is certainly the fastest and surest way of examining the trademark. You can also register without doing this report, but this increases the likelihood of the application being rejected.
4. Who can object to us registering a sign?
After the examination period of an application it will be published. This is the beginning of the Opposition Period, which will last 3 months. At this time, third parties who believe your trade mark should not be registered have a chance to object. Statistics say that one-in-five applications are contested [2]. Usually, it happens for two main reasons:
A/ The third party claims an earlier right to the trademark and believes that yours will conflict with it.
B/The third party believes that your trademark should not have been accepted in the first place because it doesn’t meet the basic requirements.
Opposition proceedings are clear. In order to prevent your mark from being registered, third parties must fill in a form and pay a fee of €320.
If you do not decide to register your trademark, you may come across one of the ‘trademark trolls’. This is where companies maliciously buy out likeness signs to make money from them. Do you really want to bear the costs of these associated losses? It’s a risky game.
In 2009, a businessman in China registered the trademark ‘Tesla’ in both Chinese and English languages for the area of China. The sign was mainly used to mark cars, in the same manner as American giant, Elon Musk. Tesla Motors realised this fact at the time when they wanted to conquer the Chinese market with their electric cars. They attempted to buy the rights from the Chinese businessman, but at a cost of 32 million dollars their eagerness was diminished. Hence, the great battle began… Both companies went to court and sued each other for enormous amounts of compensation. This painful dispute lasted five years and ended with a settlement.
5. How much does it cost?
A trademark application may refer to different classes of goods or services. EUIPO is based on the Nice Classification. When submitting the application, it is necessary to decide on how many classes we want to register our sign. This affects the fee, as follows:
- Fee for registering an EU mark in 1st class – 1000 EUR.
- Fee for applications in 1st class (electronically) – 850 EUR.
- 2nd class fee – 50 EUR.
- Fee for each subsequently indicated class – 150 EUR.
6. How can I submit an application?
Electronic applications are most ideal. The fees are lower and the processing time of the application is reduced in relation to the traditional paper applications. You must create an account in the EUIPO system, from which it is possible to keep track of the application status. You will always be kept informed about the progress.
7. How long will it take?
It will take two days for a specialist to carry out the examination of a sign. If your application is well prepared, EUIPO will most likely publish it within 2 weeks. If there are any doubts, this stage may even take up to 4 months. The next stage is a 3 month opposition period. The last stage is registration, which takes approximately one month. If there are no objections or complications, the whole procedure will last from 4 to 6 months. With complications, it can extend up to several years.
8. Does the trademark expire?
The protection of a registered trademark in EUIPO lasts 10 years. Naturally, it can be extended for another period, but it is important to remember to meet the payment deadline. Most importantly, the 10-year period counts from the date of submitting the application, and not from when the decision is issued.
The whole process is not particularly complicated. It can be done from the comfort of your own home. The costs are very reasonable when weighed against the benefits. In the face of such high competition across the goods and services markets, it seems to be a good investment for any company focused on development.
Sources:
- [1] World Intellectual Property Organization https://www.wipo.int/ipstats/en/
- [2] Raport: World Intellectual Property Indicators 2017 Trademarks.
- [3] https://euipo.europa.eu/ohimportal/en/home
- [4] https://www.wipo.int/ipstats/en/
