Does Lack of Professional Advice Lead to Unnecessary Trade Mark Registration?

When a key player in the Government’s plans to strengthen the IP framework, encourages business owners to file their own trade marks, explaining this is to help them afford trade mark registration, I wonder what’s going on.

Many lawyers educate the public about the value of taking legal advice. So, it is somewhat surprising for a Government funded entity to communicate the message that legal advice may be dispensed with. For example, on the IPO website it says “some applications may benefit from professional advice” implying not all of them do.

What is really going on here? IP law is not a straightforward topic, and in my experience all business owners benefit from professional advice. So why does the IPO put this in doubt?

The IPO offers a wealth of information on its site www.ipo.gov.uk. As a firm we suggest clients use the resources available for preliminary information, so that their time with us can add maximum value. But when it comes to drafting, searching, or making informed decisions about trade marks and broader IP issues, we absolutely recommend taking professional advice as does every other IP lawyer I know.

As far as government organisations go, the IPO is fantastically helpful. They are quick to respond, thorough, and staff are an absolute pleasure to deal with, so it saddens me to find myself levelling criticism in  their direction. But as a solicitor who advises SMEs on Internet, and IP matters, including trade mark filings, I am absolutely sure that encouraging SMES to file their own trade marks often doesn’t do them any favours.

Some downsides of DIY trade marks

Some people who file their own applications are unsuccessful in securing a registration. Take a look at the refused marks. Many either have fundamental errors which could not be resolved, or if they could be resolved, the business owners didn’t know how to do so or lacked time to deal with it. Often applications fail because the mark is descriptive and incapable of functioning as a trade mark.

I’m even more worried about those who succeed in securing registration because the scope of the applications is often inadequate to cover the activities of their business. What is a serious issue is that these entrepreneurs’ success gives them a false sense of security. Some even go on to file their own Madrid applications via the WIPO website. Filing more widely on the basis of what is often an inadequate UK base application compounds the problem. If their applications are drafted by professionals there may be some recourse if they turn out to be unsuitable, but if they themselves drafted the form as laymen, they have no come back if their business suffers as a result. Certainly they would not be able to complain that it was the IPO’s fault as the IPO is careful to avoid liability. It will not review people’s application forms before they file.

Possible clue

The courts don’t suggest parties adopt a DIY approach to advocacy, and the DVLA don’t recommend that you pop the bonnet on your car at home to prepare for your MOT. Although its heart is in the right place, and there is no disputing that any effort to inform the public about trade marks is worthwhile, the overall approach of the IPO does not seem to be in the best interests of the applicants themselves. If the IPO’s motivation is really to help start ups then why not give them a discount on official fees instead?

The fact is that it is in the IPO’s interests to encourage SMEs to file trade mark applications. A couple of years ago the IPO made 100 redundancies due to the reduced number of filings in the recession. So, on the face of it the IPO does have a conflict of interest. If it encourages taking advice then people would go to advisers who may not necessarily recommend trade mark registration.

In pushing trade mark registration as it undoubtedly does, the IPO is not helping start ups. It’s adding to their costs and depriving them of the opportunity to consult lawyers who might suggest that they need not apply for a trade mark at the beginning unless they have a name they want to own (and which is capable of being owned).

Indeed, many start ups choose descriptive names and these are just fine for getting the business off the ground. The name tells potential customers what the business does, and as it’s descriptive, nobody else will be able to register it. Later, if the business succeeds, it should brand itself with a good name and have it professionally registered.

You don’t need to register a trade mark

I doubt the IPO is making it clear to start ups that they don’t need to register a trade mark. Indeed judging from the below case, the IPO is likely helping businesses with descriptive names to find ways to register whatever they can, quite regardless of whether it’s an important brand element for them to register.

When would the IPO suggest taking professional advice then?

One business I know well, chatted to an IPO representative at a business start up fair, and then proceeded to file two trade mark applications for marks they felt would succeed through the registration process. These were not much used as trade marks within the business, and therefore low priorities for registration. The names the business did use for its products and services were too descriptive to register as trade marks. So, these other names were seized on for no better reason than that they might succeed in being registered.

Unbeknown to the business, they have a serious problem on their hands in not having a distinctive brand name they can trade mark.

The business was so successful it had already licensed its format in a couple of countries and was set to expand more widely internationally. The business simply did not appreciate what it means to not have a name it can own. Any professional would advise a rebranding in light of the business’ intention to licence globally. Otherwise, it would be missing out on owning a valuable IP asset.

Independence is key

The fact that this business spoke to an IPO representative and walked away none the wiser about the importance of consulting a professional and instead engaged in wasteful trivial trade mark registrations speaks volumes about the undesirable consequences the IPO’s current policy is having. Unless the IPO distances itself from helping applicants to file their own marks, it is reducing the quality of its IP awareness raising activities.

This particular business is successful and could easily afford to pay a legal representative for advice.

Cutting costs

So the current IPO policy is not helping entrepreneurs to see there is more value to be obtained from taking advice than just securing a trade mark registration. For many, registering a trade mark is not essential initially, but, where trade marks are important (for example, for a fashion label applying its brand to clothes) then getting it right is crucial. Such businesses should be encouraged to get legal help because a professionally drafted trade mark will be better than one they can produce themselves, and it’s an investment they are making in their business. If they need to cut costs, then let the business itself decide what to cut. It is not necessarily a smart move to cut out professional legal costs.

And if 80% of businesses fold in year one, then let them decide in consultation with their professional advisers whether a trade mark registration is appropriate for them. If they don’t even have a suitable name, I’d suggest they cut out expensive branding and websites too until they’re more established. Starting out cost effectively and thinking carefully about what you spend money on is a sensible approach. An example of a business that adopted this strategy is Distilled. It was known by a different name in its first 18 months and rebranded when it knew the business would be viable.

The IPO – A Competitor

Personally I now see the IPO as my competitor. Sometimes I think: Surely there must be competition rules to protect us against unfair competition from a government funded entity? An entity that influences businesses not to consult lawyers except in rare cases, and advises them that when they do want to consult someone: “Professionals who belong to the Institute of Trade Mark Attorneys and the Chartered Institute of Patent Attorneys are especially useful in helping you obtain and understand your IP rights”. How does the IPO justify making such a statement. I would love it if the Law Society took this up with them.

Surely it depends what sort of IP need a business has. In our knowledge economy where intangible assets are signficant to most businesses, not just to inventors or creatives, it’s likely that many start ups are in need of other types of IP advice. Those setting up web based businesses (and websites are a bundle of IP rights) have copyright issues and need appropriate contracts and lawyers who understand the internet. IP Solicitors such as my firm, are probably more able to help them with their typical IP needs than other types of IP professional. But by directing everyone in need of trade mark or other IP help to ITMA and CIPA the IPO is not necessarily helping people to find the best person for the job.

Solicitors are skilled and experienced professionals. The IPO does not need to protect the public against them. The IPO should instead focus its energies on helping the public to distinguish between regulated professionals who are insured and are answerable to professional bodies from others who prey on inventors and creatives with their various IP services.

The UKIPO has a huge responsibility in this area, and should take care when making recommendations that they don’t unintentionally mark out one group of professionals as being more useful than another when they have not offered sufficient explanation to allow readers to choose what is right for them. So, in my view the IPO needs to make some changes. It should encourage SMEs to take professional advice, and should avoid favouring one profession over another. This is particularly important in light of the IPO’s impending consultation reported in IPKAT to identify how lower cost IP legal and commercial advice can be provided to SMEs