The Impact of Trade Marks on the value of Yorkshire’s Businesses
19th March, 2024
The importance of managing the intangible assets of a company, such as brand recognition and intellectual property, cannot be understated.
Depending on the report you read, the intangible assets account for anything from 50% to 90% of a business’s worth, with a 2022 report by Aon, in partnership with The Ponemon Institute, confirming that companies value intangible assets more highly than tangible assets.
Ward Hadaway recently recognised Yorkshire’s fastest growing businesses at a glittering ceremony in central Leeds where the combined turnover of the fastest growing 50 businesses in the region was £2.5 billion. For these businesses, the message is clear: the value of your company lies not only in its physical assets but significantly in the intangible, which is why legal safeguards are vital.
Trade marks are a significant component of a company’s intellectual property, but numerous well-established brands find themselves under-protected, posing a risk not just to their brand identity but also to their competitive edge and market value. All too often, this lack of protection is starkly exposed only when the brand is encroached upon by unscrupulous businesses seeking to profit from its success.
Sonia Burgess, a trade mark attorney at Ward Hadaway, discusses some key areas where businesses can fall down when it comes to protecting their trade marks .
Updating your brand and ensuring compliance
A business may have brand protection in place, but a rebrand obviously creates something new. That’s why it’s crucial that businesses undertake pre-filing searches for conflicting brand names and, assuming that the searches are clear, ensure that they then register the new brand quickly prior to launch. Integrating trade mark searches and securing protection should be standardised procedures for businesses introducing a new brand or product, but often these steps are taken only as an afterthought when significant investment has already been made in respect of the new brand name. The potential reputational damage and cost associated with launching a brand which is then challenged in the marketplace can be huge.
Broadening protection beyond the business name
A common oversight for many businesses is protecting the company name but neglecting product names, or vice versa. The protection needs to extend beyond the surface, covering the entire suite of trade marks associated with the business and not just the overarching banner. This includes not only the names of the products and services but also any unique slogans, logos and even distinctive packaging designs that are synonymous with the brand.
For example, a tech company that diligently trade marks its corporate name but overlooks the software titles it develops can run into problems. Without trade mark protection for these product names, there’s a risk of other entities using similar names, potentially leading to market confusion and diluted brand strength.
Businesses often arrive at a brand name ” because it does what it says on the tin”. Unfortunately, this generally means that it is a descriptive title and will therefore be very difficult to protect as a trade mark. It is important that short term and long term commercial and legal factors are carefully considered at the brand inception stage, taking into account the long term intangible asset value of the mark.
Businesses often evolve, expanding their product lines or entering new markets. As such, the trade mark strategy should be revisited regularly to ensure all aspects of the brand are comprehensively protected. Furthermore, a brand which has been used extensively on the marketplace may become capable of securing registered protection, even if it was previously deemed too descriptive or non-distinctive.
International trade mark protection
For Yorkshire businesses aiming for global reach, it’s crucial to secure trade mark protection in every country where they plan to operate. Trade mark laws differ widely worldwide, and a UK-registered trade mark doesn’t confer protection outside of the UK.
In many places, the ‘first-to-file’ principle applies, granting rights to whoever registers the trade mark first, not necessarily the original user. This system can lead to ‘trade mark squatting’ where individuals register trade marks in their country to sell them at a higher price to the original owner. Failure to protect a trade mark in all countries in which a business operates, or intends to operate, may ultimately result in entry barriers in certain countries. This can have a hugely detrimental impact on brand consistency across markets, and on a company’s growth plans and reputation.
Act against infringement
Encountering trade mark infringement is a direct challenge to a brand’s integrity. The ® symbol shows that a trade mark is legally registered, and that the owner is prepared to enforce its rights.
The registration provides a clear indication to competitors and the wider market of a particular company’s legal ownership and the exclusive right to use the mark in connection with the goods or services listed in the registration. It serves as a deterrent to potential infringers by highlighting that any unauthorised use may be subject to legal action, including claims for damages and injunctions against further use.
As we navigate the complexities of the digital age and international markets, the diligence in safeguarding our trade marks ensures that our brands remain distinctive and competitive, fundamental ingredients to stability and growth, and as a key intangible asset can contribute to maximising the ultimate value within our businesses.
To discuss your business trade mark and copyright protection, please get in touch with Sonia Burgess for a no obligation conversation.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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