Dangers of Using Unregistered Trademarks

DANGERS OF USING UNREGISTERED TRADEMARKS AND BENEFITS OF REGISTRATION

What is a trade mark?. Different authorities have given the meaning of a trademark. The Trademarks Act 2010 of Uganda defines a trademark to mean: a sign or mark or combination of signs or marks capable of being represented graphically and capable of distinguishing goods or services of one undertaking from those of another undertaking.

For every successful and time tested corporate brand (trademark), that everyone wants to associate with, behind the scenes, a lot of effort and resources have been sunk into intricate trademark development and aggressive protection. Company brands and trademarks are amongst a company’s valuable assets. A study done by the UK’s IP office reveals that an estimated 6% of most company investments are spent in company brand protection.

Branding starts and centers around your use of distinctive images, symbols, colors and styles, and caricatures, which most appropriately separate and preposition your goods, or services as unique from others on the same market, giving both a protection to your customers and also acquiring brand image and build up brand loyalty amongst your consumers.

Dangers of using unregistered trademarks

Until a name or logo is registered as a trademark, you cannot be certain that it belongs to you. If another person or business registers the mark first, you may find yourself in the highly inconvenient and very costly position of becoming embroiled in litigation and potentially having to withdraw your products, redesign your packaging and marketing literature, and pay damages or an account of profits to the registered trademark owner. Besides the quantifiable costs, you could also risk any goodwill that you may have established in the brand name over the years, over a product that you have painfully taken years to create, just because you didn’t take the extra step of registering it.

Available research from world intellectual property organisation shows that over 80% of SMEs fail to register their trademarks. The majority think that it is not important to their business, with others citing lack of time, lack of understanding of the process of registration and costs associated with registration. By failing to register their trademarks, these businesses are not only damaging their brands and reputation, but also put their businesses at risk and in the end, loose out in the market battle.

Benefits of trademark registration

When you register your trademark, you ensure that you are in a position to prevent others from using or registering a similar one and that is the key to maintaining a strong brand.

Section 34 of the Trademarks Act 2010 is to the effect that a person may not institute proceedings to prevent or to recover damages for an unregistered trademark. Section 35 saves the right of action against a person for passing off goods or services as the goods or services of another or the remedies in respect of the right of action.

Protection under section 35 is only afforded to an unregistered trademark where a mark has acquired a substantial reputation. Even then, the hurdles to be over come in order to succeed in enforcing those unregistered rights against a third party, and the associated costs, are such that many businesses are inhibited from taking the legal action, and those that do, often fail.

By registering its trademark, a business greatly improves its ability to prevent a third party from using or seeking to register conflicting marks, and to seek appropriate remedies, such as an injunction and or damages, in the case of an infringement.

Trademark registrations are also valuable, transferable assets, which can be used as negotiating tools in business transactions and as security for financial transactions. Intellectual capital is recognised as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for market dominance and continuing profitability of leading companies. It is often the key objective in mergers and acquisitions.

 What to consider while developing a good trademark

Before coming up with the appropriate idea of a trademark, ask yourself, what your particular brand is and what word best expresses your brand. Also imagine what typography conveys the feeling of your brand. For example, what colors are consistent with your brand’s personality?. Your trademark can include a graphic, and if so, choose graphic expression which will best complement your brand. Finally, ask yourself the hard question on whether the trademark helps distinguish your brand from the competition?.

It is important that every business, however small, urgently puts in place an effective and proactive trademark development and registration strategy to ensure that all its brands are properly protected, and that those it enters into contract with to use the those brands are not going to land them in trouble with other trademark owners.

The use of effective trademark watching and monitoring procedures is also fundamental to the maintenance of a strong and enforceable trademark in the market; it helps to identify potential sources of conflict, including potential infringers, and prevents the dilution of one’s trademarks.

Where to find help

You should seek the advice of a trademark attorney for help in developing or implementing your trademark protection strategy. The trademark attorney should be in position to guide you through the trademark selection and registration process and advice on all aspects of the protection and enforcement of your trademarks.

Angualia Daniel
Managing Partner
M/s Angualia Busiku & Co. Advocates
Plot 3 Parliament Avenue, Raja Chambers
www.lawyers-uganda.com
Email: angualia@lawyers-uganda.com
Mobile Telephone: +256774477656
(Trademarks, company and investment law)