One of the things entrepreneurs hate most are words that suggest cost and no revenue. You know the ones: ‘insurance’, ‘regulation’, ‘audit’ and, dare I say it, ‘lawyer’.
But taking steps to protect from the future theft of key assets should be as natural for any business as it is to have a lock on the front door of your home.
And, indeed, it might cost less than fitting that lock.
Registering your trade mark might also help you grow the business as well as protecting it from theft in the future. New academic research has found that trade mark registration can help businesses of all sizes raise finance, improve company performance, build brand awareness and improve customer loyalty.
However, despite these clear benefits, only 26 per cent of UK businesses, and even fewer SMEs, either recognise or know how to take full advantage of this growing area of opportunity.
So, what are trade marks, how can they be used and what do you need to do to register and protect your intellectual property?
A trade mark is essentially a way of identifying goods or services. It can take a variety of forms including a word (eg: KODAK), a slogan, a logo, a jingle, a colour, a smell, a shape, a sound, letters, a number (eg: Chanel No.5), a form of packaging or a personal name.
Having a registered trade mark gives brand recognition and helps guarantee the origin, quality and consistency of the goods or services.
Not only does this help avoid confusion with others in the same line of business, but it also allows action to be taken against anyone counterfeiting or copying a trade mark for similar goods or services.
A registered trade mark can also be used to raise vital finance. Intangible assets, such as registered trade marks, are increasingly being used as security to borrow cash.
They also provide new revenue streams from licensing and franchising activities. And registered trade marks have a ‘residual value’ so that even if the company stops trading, the trade mark may continue in existence and can be sold on to others.
The new research also shows that registered trade marks are linked to higher company performance.
Companies that protect their intellectual property undertake a wider range of performance enhancing activities, such as research, design and development.
Trade marks also enable their owners to command a premium price in the market that is reflected in their financial performance.
Like any asset, however, a trade mark must always be carefully looked after, using expert professional help where necessary. It costs between £600 and £800 + VAT for a straightforward registration in one class in the UK. Trade mark registrations last for 10 years and are renewable on request.
While the benefits of protection are clear, failure to at least check that you can use your chosen trade mark could be very costly. Just imagine what it would be like to have all your products ready to hit the marketplace: your advertising all in place and your marketing strategy all mapped out, only to find out that someone in your field is already there, using a very similar trade mark.
You may have to scrap everything and start all over again or pay a licence fee to the original owner; at a time when finance is probably very tight. A few sensible precautions at the outset could save thousands of pounds.
In theory, anyone can.
In practice, it is always best to use an expert and members of the Chartered Institute of Trade Mark Attorneys are the most qualified to give the best service. There are many tales of woe of people who have spent money trying to register their mark on their own without properly establishing whether someone else has already done so.
As with that lock on your front door, it is always best to get a reliable and properly trained locksmith to do the work.