Trademark

Why It Is Important to Register Your Trademark

05 Sep 2017
Trademarks

Companies, especially SMEs and newly incorporated firms, tend to forget about registering their own trademark.

One of the main reasons is the common misconception that registering the company in the trade register, or even just securing a domain name, would be enough to prevent competitors from using the same name. Furthermore, many companies consider the registration as a cost that can be postponed – until something gets wrong. Just a few consider the trademark registration as an investment, that is relatively cheap compared to the strong degree of protection it offers to companies’ most valuable asset: their brand.

Is it really necessary to register your trademark?

In all major South American jurisdictions, some sort of protection is granted to the company whose trademark has not been registered but has been used for some time. However, this protection is limited and only temporary.

Brazilian Law No. 9.279/96 states, for instance, that “any person who, in good faith, on the priority date or the filing date of the application, was using for at least six months in Brazil an identical or similar mark to distinguish or certify identical, similar or related products or services shall enjoy a right of precedence in registration.” That is to say, if a company has been using the trademark in good faith for six months before another company filed for registering the same trademark,  the first company may claim priority. However, this is just a priority. The first company has to proceed with registration: if it doesn’t, and the second company issues to registration, it loses any rights to that trademark.  

In Argentina, on the other hand, unregistered or “de facto” marks have been increasingly protected by case law but the scope of such protection varies from case to case. Judges have granted protection to companies which have used their name in good faith, for a certain period of time for opposing third-parties trademark applications; cancelling trademark registrations; and for preventing third parties from using the same name.This protection, however, is partial and may involve a long judicial route before being granted.

A quick, relatively cheap registration could prevent many hassles and costs.

The advantages of registering your trademark

First and foremost, registration is necessary to prevent someone else – most likely a competitor –  from registering the same name and inhibiting you from using it. The business costs of having to remove your mark from your website, promotional material and packaging could be enormous. Moreover, using someone else’s registered trademark would entitle the other party in issuing a claim for damages against you.

Secondly, you may want to register to prevent a counterfeiter from using your mark – if your company has a strong brand, counterfeiters will probably want to copy it. If you don’t register your trademark, it may be difficult for you to prove that, you are the legitimate owner, and in any case, it is going to be extremely  time-consuming.  Trademark registration is the quickest way to obtain preliminary injunctions from the courts, and recover damages later on.

Third, registration is the only way to prevent your company from unconsciously infringing the other company’s rights. You may not realize that the mark you’ve been using is already registered. What could be the consequences? Having to rebrand, bearing the costs of new promotional materials, and being sued for trademark infringement by a competitor.

Finally, there are significant financial incentives to register your trademark. A trademark is an asset that has monetary value. It can be bought, sold or licensed and you can demand royalties for exploitation to your licensee, for instance, a distributor.

A trademark is one of the most important assets of your company: registration is the necessary investment to protect it.

 

Moeller IP Advisors