So: you’re starting a business, or perhaps you already have your business up and running. You most likely have taken pains to protect yourself and your new business in a number of ways – perhaps you have formed a corporation or LLC to insulate you from business liability. You’ve probably gotten insurance to protect the business from various risks. Maybe you’ve hired an accountant to ensure you don’t run afoul of the IRS. Think you’ve thought of everything? You haven’t.
“Branding” is the watchword of business today, and you probably didn’t embark on your new business without lots of head-scratching and staring into space while deciding how to create a suitable and valuable brand for the enterprise. Once you arrived at a brand concept, you probably made plans to invest lots of energy, time and cash into promoting the brand, whether through traditional media or through the newer social media methods.
But if your branding efforts stop short of protecting the fruit of all those efforts by registering your trademarks, you very well may fail to create a lasting and thriving brand. You also will bypass an opportunity to create lasting value in your enterprise.
Whether you are a startup or an existing business, return on investment is a necessary component of any business expenditure these days. Protection of your intellectual property is no different.
So, what is the ROI in registering your trademarks?
Brands create customer loyalty, and registration of your brand helps guarantee that competitors cannot steal your customers by masquerading as YOU. In uncertain economic times, there may be no currency more valuable than customer loyalty.
Registration allows you to use the federal registration symbol – ® – on your packaging and marketing materials. Seeing that little ® can suggest to potential customers that you are a reputable company.
Registration may also help when seeking financing. In these days of tight credit, lenders may value your trademarks and other IP more highly as collateral if those assets are registered and maintained as part of an organized intellectual property portfolio.
Registering your trademarks can make it easier and more expedient to license those marks to others for use on other goods or services. Licensing has two benefits: first, it extends the “reach” of your brand, and second, it creates an additional revenue stream.
Registering your trademarks can make your business more desirable to potential purchasers or marketing partners, since it means you have a federally-protected right to sell your branded products on a nationwide scope. It also can help you command a higher purchase price in the event of a sale of the business.
I don’t mean to suggest that these are all of the benefits of registering your intellectual property – they aren’t, by any means. Rather, these are just some that you may not have thought of. The bottom line is that all businesses have public identities, and thus all businesses have trademark concerns. It’s no coincidence, moreover, that the most successful businesses tend to be the ones that value their brands enough to invest in protecting them from the start.
What are your thoughts on state trademark registrations and common law trademark? Are there businesses for whom a unregistered common law trademark or state trademark registration is “good enough”?
Hi Devin, thanks for reading and commenting.
I generally have avoided state trademark registrations for several reasons. First, many state trademark statutes don’t even purport to grant exclusive rights as a result of registering your mark.
Second, whatever rights *are* granted are going to end (of course) at the state line, and there are not many businesses in the Internet age that do business solely within the borders of one state. By the time you go to the trouble of getting three or four state registrations, the client probably would do better costwise just to go federal.
If the client really can’t afford a federal application or a federal application has been refused registration, then state registration(s) may be a logical answer (if the client really wants to have a registration of one sort or another, that is.)
Common law trademark rights are not a bad thing, especially where “amplified” by broad-scale Internet use of the mark – provided the client takes the appropriate steps to notify the public of its claim of trademark rights. You’d lose the benefits set forth in my primary post, but to borrow from an old WENDY’S commercial, “rights is rights.”