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Why a Small Business Should Register A Trademark

June 28, 2022 · 3 min read

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We’ve usually got an understanding of a trademark concept by example. Amazon, Apple, or Microsoft have protected trademarks, and thus you cannot just name your online shop a New Amazon, or put the Microsoft logo on software packages that you develop.

Perhaps, that’s why many SME owners consider trademarks as something ‘for the larger’ and postpone the registration of their trademark. In this article, we are going to address the issues of the importance of trademarks for small businesses and when it might be urgent to register them.

A Value of Trademarks for Small Companies

A trademark is a result of two actions taken by your company. First, you created a unique name, logo, or tagline that you will use in commerce. Second, you reported it to the government to be legally protected.

Thus, a trademark gives you protection from copying and legal certainty. The main reason to register a trademark is to protect your company’s uniqueness from potential problems, as in the following situations:

  • Your competitor or any third party uses the same sign to sell the same goods or services as you. Basically, it takes a part of your profit.
With the registered trademark, conflicts of this kind are resolved faster and easier. Assessing possible penalties for trademark infringement, the other party will most likely stop using your brand. At least, you will have the right to get compensation.
Trademark protection works even if a counterparty uses not the same, but a similar name or logo that might confuse an ordinary customer. This mixture may be unintentional, since you’re all in the startup environment, for example. Anyway, the trademark will be your best argument to close the dispute.

  • Cybersquatters register an internet domain name that is identical to your company’s name or tagline. It takes your traffic and cybercredibility.
As an EU trademark owner, you can use one of the legal procedures like ADR and ICANN or, at the very least, go to court and win. Without the trademark, it would be more difficult to protect your name. Mostly, brand holders just buy a domain from cybersquatters at an inflated price.

Given that cybersquatters are attackers among many other groups on the internet, you have to be vigilant. It’s up to you to undertake a preventive step. A registered trademark will show attackers that you’re not an easy target.

  • Somebody registers a trademark that’s similar to your logo. Then this company requires you to stop using their trademark.
It doesn’t matter whether it happens intentionally or unintentionally - you risk losing your logo at all. Of course, there is a procedure to challenge the registration of this trademark. But it’s not a piece of cake to prove that you actually were a proprietor of this ‘non-registered use-based trademark’.

Besides, ‘a scope of protection [of non-registered trademarks] is not uniform’. And some EU Member States including convenient jurisdictions such as Estonia or Cyprus and big markets such as France or Spain do not protect unregistered trademarks.

Trademarks, Google and Brand Building

Another reason to register a trademark is to supervise the advertising creatives of your opponents. There is a specific policy at Google Ads that regulates trademarks appearance in search advertisements and keywords.

In general, Google does not restrict trademarks as keywords neither for corresponding nor for competing with your company’s products and services. But there are some exemptions. For instance, it’s prohibited to use a trademark as a keyword if an ad results in an ‘adverse effect’.

If a net user may get the impression that there is a connection between the trademark owner and the advertised product, then there is a harmful effect, and a count will issue a decision to stop using it in such context.
Away from the infringements, a trademark is as important for brand building. A trademark is the formal side of a brand.

In the 2019 Intellectual Property SME Scoreboard, 48% of businessmen mentioned among the reasons that a trademark increases the image of a company and chances for financing.

The money you spend for trademark registration is your investment in the company’s name or logo. Then, as the company develops, the trademark accumulates all the efforts put into the reputation, product, and customers.

Then the trademark acquires its value and can be sold as a separate asset or be separately evaluated in an investment deal. Trademarks can become a new direction for your business if you’re interested in franchising or licensing.

An Urgency of Registering a Trademark

Since there are no deadlines to register a trademark, many small business owners postpone this procedure for a perspective. However, there are some reasons to do it right now:

  • the average procedure of a trademark registration takes 6-9 months depending on several factors such as opposition will be filed, etc.

  • SME Fund reimbursement that you can apply to and receive a 75% refund of the official fee for trademark registration is available until December 16, 2022.
NB! the total fund may run before the end of the program.

  • if you are a startup, you may need a registered trademark for an investment round.
On Enty we see how important it is to save your resources and energy on the development of your business. Thus we’ve recently launched trademark registration services for EU companies. The flow is super easy: you send us docs and data, and we take care of all the bureaucratic issues.
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