Tag Archives: china and trade mark

Trade Marks

Why Trademark? Essential Thinking Inspired by The Road Less Stupid

Trade MarksIn the book, “The Road Less Stupid: Advice from the Chairman of the Board” Keith J. Cunningham describes how smart people do dumb things. Business is an intellectual sport, yet many entrepreneurs and business owners cause themselves problems due to their “excessive optimism and emotional belief in magic pills, secret formulas, and financial tooth fairies. (All balloons look good when they are filled with hot air.)” says Cunningham.

The key to getting rich (and staying that way) is to avoid doing stupid things”.

I notice people’s tendency to freely spend on magic pills, secret formulas, and financial tooth fairies as Cunningham describes them while postponing or overlooking obvious steps to protect their business. People want to buy things that promise them a way to make money, but something like ownership of intangible assets that will secure the foundations of their business is neglected. It’s boring intellectual property which they don’t even want to take the time to understand, let alone secure and protect.

Trade mark registration and brand protection are basic first steps to take, there is no sense in postponing or putting this off, and I’d suggest that anyone looking to think better should revisit this subject with an open mind

But do note Maynard Keys’ observation that “Most people, when confronted with a choice of changing their thoughts or proving there is no need to change, get busy on the proof.”

 

Trademark Registration and Brand Protection

I have just spent a few thousand pounds extending my Brand Tuned UK trademark registration to the EU and USA.

You may wonder why I would bother to do this. The name is nothing particularly special, the brand name is not generating any money for the Azrights business as yet, and we’re on the cusp of a serious world recession, so nobody wants to be throwing money around.

However, it’s a name I’ve checked is available to me to use and I want to secure my rights in it. It might be worth explaining my thinking in case it helps you to make decisions for your business.

I’ve seen how much inconvenience, hassle and expense people go through when they don’t take this basic step of protecting the brand name they’re using in key markets for their plans.

As a general rule, it costs ten times as much to deal with the complications that can arise when you don’t protect your name than the cost of registering the name in the first place

Names and trademark registration are very similar to the ownership of physical property and should be thought of in the same way.

If you simply squat on land on which you are developing properties and don’t secure ownership of the legal title, your tenure would be insecure. You could have the rights taken away from you or otherwise lose them. Someone else or events outside your control might shatter your peace and enjoyment of your property.  Do you want to risk that with your brand?

Who wants to pay stamp duty and solicitors’ fees that are part and parcel of transferring the title to land? Given the choice, I reckon many people would postpone this cost and avoid the expense of acquisition. However, they go through the buying process with physical property largely because they understand that it’s a necessary aspect of owning land, of building on the land, and developing their life or business around ownership of that land.

While the same applies to names that we use in business, this is less well appreciated.

The first step is to secure rights in a name by registering a trade mark in your home market. If you simply use a name without registering it, then you set yourself up for costly litigation if someone else also starts using the name or registers the same or a similar name first, making it difficult for you to co-exist.

While people commonly register their own trade marks, I wouldn’t recommend it unless you take a lot of time to understand how to do it properly. In the same way, I wouldn’t recommend registering your land yourself even though it’s as seemingly straightforward to do so now that we have the land registry system in place for physical property.

Cost of Ownership

If you use an experienced lawyer to do the work for you, the total cost might be £1,000-£2,000 including official fees (that is, the equivalent of stamp duty) in the UK. You could save on legal fees and just pay the official fees (stamp duty). However, based on the number of poorly registered trademarks I’ve seen, it’s not worth the saving to do your own registration. Ultimately, you want a piece of paper you can rely on when it comes to enforcing your rights in your name, not just a piece of paper.

The trademark registries in all the countries worldwide are online and make it seemingly easy to register your rights yourself, but if you want to be properly protected get the best lawyer you can afford to do the drafting and scoping of your trademark for you. Just accept it as the price of owning your brand name.

That first registration gives you 6 months’ protection worldwide meaning you get priority protection in most countries provided you go on to extend your registration to your chosen markets worldwide within this 6-month window.

I had registered Brand Tuned in the UK, and the 6 months’ time window expired on 14 June to extend that protection to other countries of my choice worldwide.

Why Extend Internationally?

For Azrights, a trademark I registered in 2006, I hadn’t bothered and have still not bothered to extend the protection beyond the UK. The fact that I’m bothering with Brand Tuned is indicative of why there is no universal strategy for trademarks. Much depends on your plans for the business.

Some businesses might not need to extend beyond their home market, while others will need to extend their trademarks to some countries but not others. No business, not even the big household name brands, will be able to afford to register in every single country worldwide. It’s a matter of risk mitigation and knowing what could go wrong in different countries.

At the end of this article I highlight why China is a market that some businesses may need to concern themselves about.

I haven’t bothered to extend Azrights beyond the UK, even though there are theoretical risks I face, primarily because Azrights, though it protects brands internationally, does so as a UK based business. It might attract customers located abroad but the work is always conducted in the UK and then extended internationally using the system provided for international registration of IP.

How Lack of Protection Can Hurt a Business

An example of why it’s important to think strategically when protecting a brand is provided by US online dating website plentyoffish.com launched in 2001. UK competitor “Plenty More Fish” set up in 2006 and in 2007 filed to register a fish logo and the words PLENTY MORE FISH as a UK trade mark. The US site opposed the application but lost because it did not have enough UK subscribers to be able to claim earlier rights in the UK.  It should have registered an EU trade mark as that would have blocked other businesses registering similar names in any country within the EU.

Their failure to do so, enabled another business in the same space to use a similar name and ride off the back of their marketing spend and success. This would never be allowed to happen within a country’s borders because it’s recognised that there would be a negative impact on the revenues of the existing business, not to speak of potential loss of reputation if the newcomer provides a shoddy service which customer confusion will inevitably lead to attribution to the bigger brand.

The Azrights UK trade mark currently protects the business in the EU but perhaps we may think again about whether to secure an EU trade mark given that the UK will be leaving the EU at the end of this year.

Azrights is not an online business. It’s primarily local, based in the UK, so although it would be highly annoying and inconvenient if a new business were to set up in other parts of the world using this name, it’s not a significant enough risk to justify filing internationally.

Why I Registered Brand Tuned Internationally

For Brand Tuned, on the other hand, I have a podcast by that name, and intend to create online products under the name, among other things. If someone else stole the name and registered or began using it in the USA or EU first, they could require me to rebrand in those countries. This seemed a risk not worth taking.

It’s necessary to have a name you can safely build your business around. Not protecting the name in these two markets could be a massive inconvenience for us, and it would be costly to make changes. That’s why I have registered in those markets. I didn’t need to pay much in the way of legal fees (the US lawyer’s fees were quite modest) and we handled the EU application ourselves. So, most of the thousands I’ve had to spend is purely down to the official fees in the USA and EU. That’s like a stamp duty you pay to get 10 years of ownership rights in your brand name.

To add context, mine is a lifestyle business. I’m not intending a big exit or any of the traditional things people associate with international trademarks.

 

China as a Risk for Those Manufacturing or Intending to Sell There

China is now the second largest economy on the planet and has become a key market for businesses worldwide. So, securing ownership of your brand in China should be an important part of your plans.

If you hope to manufacture or sell in China, it needs to be an early consideration to take steps to protect your trademark rights in China.

It is typical for businesses to outsource manufacturing of their products to China, and in doing so license their Chinese partner to use their trademark for that purpose.

In some cases, the Chinese manufacturer, or another entity in China, will hijack the brand, registering it as a trademark and securing ownership of the rights to it in China. Case law on this point is developing, but there is a risk that such a hijacker might bring an action against the manufacturer for trademark infringement, stopping production in its tracks. So, even if you manufacture but don’t sell your products in China, you need to secure local trademark protection.

 

Conclusion

As Keith J. Cunningham uniquely puts it, “the name of Napoleon Hill’s book is Think and Grow Rich. It isn’t “Use Your Gut and Grow Rich” or “Sit in a Dark Room, Om, and Visualize a Sack Full of Money Dropping on Your Head and Grow Rich” or “Do What You Love and Grow Rich.” It’s not about touching yourself, closing your eyes, or relying on fantasy economics (which are only effective in fantasies). And it’s certainly not a “Secret.” It’s THINK! (There are no secrets . . . just stuff you haven’t learned yet.)”

His book is well worth reading if you want to add to your tool belt, knowledge, and insights to support you in being thoughtful about your decisions and decision-making process prior to taking action.

As far as trade marking goes, you need to think seriously about getting your trade mark rights in place. You will have a more effective business if you build it on solid foundations, so make it a priority to secure your rights in your brand name immediately.