How to trademark your startup on a budget

As a startup you never have enough resources to do every business activity perfectly.  That’s the life of a startup.  


There are many parts to business you can make up as you go along, but one challenge that you shouldn’t take lightly is intellectual property.  Intellectual property includes patents, trade marks, design rights and copyrights.  

Ignoring these can derail your business even if you do everything else right.


So does that mean you need to employ a trade mark lawyer to help you navigate the maze of trade mark law?  Not necessarily.  As a startup on a small budget, you have three options. 

  1. You don’t spend any money on trade marking and accept the risks that come with that decision.  
  2. You hire a trade mark lawyer to give the perfect advice.  But the advice may use a significant part of your startup capital, leaving you with little money for other business activities.  
  3. You don’t spend the money on a trade mark attorney but instead put in time and effort to understanding trade mark law and the application process.  

This article will tell you which option is best for you.  It will tell you what you need to know about trade marks and includes links to high authority sites, so you can read further. 


Ultimately my aim is to give you sufficient information to allow you to feel confident enough to register your own trademark.  I am not a trade mark lawyer, but an entrepreneur with a background in intellectual property management, who has gone through the process before.   
Let me assure you, applying for a trade mark is not difficult, especially if you choose a straight forward name.  And as a startup you are in the lucky position to be able to choose such a name.


So let’s dive in.

 

What is a trade mark?  

A trade mark is a sign or a symbol used by one trader to distinguish products and services from similar ones provided by other traders.


The words “trade mark” and “brand” often get confused in the general media, so let me explain the difference.  A brand exists only in your customer’s heads.  It is the perception of the quality and features related to a name.  A trade mark by contrast is a representation of that brand in the form of a name or symbol.


As a business your most important consideration is to serve your customer well and to build your brand.  I have written previously about the meaning and importance of branding.
So when you put all that effort into creating a successful business and recognisable brand, you will want to protect it legally.  This is what a trademark does.  It is the legal wrapper around your idea, which is the brand.


There are many things you can trade mark in a business.  You could trade mark the company name, for example Unilever, or a product range like Dove.  Unilever owns the Dove brand as well as a many other brands.   


As a startup you need to consider which name you want your customers to focus on.  If you are selling services it will be your company name. If you are selling products, your customer is more likely to encounter a product or brand name, so you should choose to protect that instead.  If you have sufficient budget you can register both.


It is important to realise, that registering your company name with Companies House gives no protection at all in trade mark terms.  The only thing registration with Companies House achieves is to stop others from registering the exact same name with Companies House.


If you want to prevent others from using your company or brand name, you have to register a trade mark.  In the UK the organisation that issues trade marks is the Intellectual Property Office (IPO).  Registration in the UK will protect your trade mark in the UK only.

 
If you want to protect your trade mark in other European countries as well as the UK, you can apply for a European Union Trade Mark.  The European Union trade mark was called the Community Trade Mark until March 2016.

   
A third alternative is to register an international trade mark with the World Intellectual Property Organisation (WIPO).   This offers the widest geographical protection, but is only useful if you are actually trading in these countries. 
For most startups, registration in their own country will be enough to begin with.
Trade mark laws vary slightly across different countries.  This article will help you to understand UK trade mark law and application in the UK.

 

What is the purpose of a trade mark?

Trade marks help customers to identify the right products or services.
They are a badge of origin and guarantees customers certain qualities related to a product.  Good quality associated with a trade mark will lead to repeat business; whereas poor quality acts as a warning to customers. 

 

What can you protect with a trade mark?

In principle you can protect everything that you can represent graphically:

  • a word
  • a logo
  • a jingle,
  • a tag line,
  • a colour
  • packaging  
  • and more.  

In reality only the name or a logo are relevant for startups.  You can protect other trade marks later when your company produces income and you are more certain which words or images are relevant to your business and won’t change over a long period.


The unregistered trade mark

You can use a trade mark even without registration.  If you are the first person to use a trade mark, you gain the rights to the mark as soon as you start using it to sell goods or services. 
You should use the TM or SM symbols to highlight that a word or symbol are a trade mark for your business.


An unregistered trade mark is free, but gives very limited protection.

   
It is not a criminal offence to use a name which is identical or similar to an unregistered trade mark. You will therefore find it hard to defend your unregistered trade mark in court.  
Lawsuits of this type are costly and the results are uncertain, because you have to prove that a competitor damaged your business by trying to “pass off”.  Passing off means the competitor was pretending to provide the same quality as you and mislead your customers.

 

The registered trade mark

A preferred option is to register your trade mark. 


A registered trade mark is more likely to put people off using your name without permission and makes it easier to take legal action against them if they do.  Trade marks are a form of personal property.  This means anyone who uses it without your permission can be prosecuted.  If it comes to a court case, you have to do nothing more than to prove that your trade mark was used without permission.  The use without permission is called infringement in legal terms. 


A registered trade mark should be used with the R symbol, denoting it is registered.
Trademarks are a company asset.  If your business becomes successful your brand name, registered as a trade mark, becomes an intangible asset.  This can be sold or licensed.

Trade mark theft can be prosecuted.

 

Should you register your trade mark?

A registerd trademark gives you exclusive rights to the use of the name.  It also makes it easier to protect legally.


If you don’t register your trade mark, you run the danger of somebody else registering your name.  


And there is the peace of mind a trade mark provides.  Following your trade mark application, the IPO searches previously registered trade marks in your field. Your application will only be successful if you are not infringing on someone else’s trade mark.

 

Should you trade mark a name, your logo or both?

Registering a word as a trade mark has the highest value and gives you the strongest protection.  If your company or brand name is suitable you should trade mark the word rather than the logo.  


Logos are easier to trade mark than words, but for the trade mark protection to be valid, you must always use the logo in exactly the way it was registered.  You can’t vary the fonts or proportions. 


If you trade mark a logo you should make sure it contains your brand name.  This will give you further choices in the future. 
For example, your brand name may not be eligible for registration at first because it does not fulfil the criteria for registration.  However, over time you will expose your customers to your name in part through the consistent use of your logo.  As a result, your name itself may become eligible for registration. Trade mark lawyers call this “acquired distinctiveness”.  
The term “distinctive” is hugely important in trade marking and I will explain it further in the sections below.

 

What words are registerable as company names?


You can trade mark any name that is not already registered or is similar to one already registered.  After your application, the IPO checks your proposed name and looks for similar words in the registry.  If the IPO finds a similar registered word that could cause confusion, it will reject your application on “relative grounds”.  Relative grounds means, your name is too similar to an already registered name. 


Another reason for refusal is “absolute grounds”.  
Absolute grounds for refusal will apply if your name is:

  • Not distinctive
  • Suggests quality, quantity, value, intended purpose, geographical origin, time of production or other characteristics of the goods or services
  • Consists only of signs which customers would expect to see in the industry
  • Uses a protected emblems (e.g., royal crown)


Distinctiveness of words in trade marking

So let’s tackle the term distinctiveness.


The easiest way I know to envisage distinctiveness is by doing a simple test.  

Ask yourself, “would a decent honest trader want to use the word in the course of his business?” If the answer is no then the word is distinctive in your industry.
If the answer is yes the IPO would not grant exclusive use to just one trader.  

The word would not be distinctive.

 

Word distinctiveness is the most important concept in trademarking

 

The more distinctive a word is, the easier it is to trademark.


Words can be distinctive because they are made up (or fanciful), an example is KODAK.  The word KODAK had no meaning until a company started to use it as its company name.

 
A word can also be distinctive because it is arbitrary.  The word has a meaning, but people in the industry don’t use it.  A good example is Apple, a word not normally used in the computer industry, other than to refer to the company Apple.
In the food industry on the other hand the word Apple has meaning; it’s a fruit. Therefore you would not be able to trade mark the word Apple in the grocery category.  The word Apple in this case is generic.

 
The scale of distinctiveness has on one side fanciful words and on the other side generic words.  Between the two extremes you would find words that are suggestive and descriptive. 


Suggestive words are those that hint at the character or feature they provide, for example BurgerKing. 


Descriptive words signal the quality or nature of a thing, for example BestBuy.  The IPO would not allow trade marking of descriptive words, because it would prevent other traders from using the words to describe their own products.

If you want to trade mark suggestive words, beware that they are harder to trade mark than distinctive words.  Descriptive words are harder still, and generic words can never be trade marked.

 

Trade mark search

Before you apply for a trade mark you should carry out a thorough search to make sure your mark is not already in use.


First, search the Internet to rule out that the name is already in general use.


Next, you should search the Intellectual Property Office’s database of trade marks.  Simply put your name into the search tool and see the results.

 
You may find that your word is already registered, but in a different class.  

If your name is already taken, but used in a different class, your application can still be successful.  The classification system exists, so the same words can be registered as long as they don’t create confusion in the public.  
For example the name “Green Thumb” is trade marked for lawn care services (Class 44) as well as advertising (Class 35) by another company.  Both companies could register the same words, because they serve different customers and confusion is unlikely.

The IPO trade mark search is simple.

 

The application process

Applying for a trade mark in the UK is straight-forward and can be done online. 


If you want to prepare yourself for the online application, have a look at this postal application form.  It will show you the exact questions that will be asked.


The online application form starts with formalities like name and contact details.


It then asks you for the mark or “series of marks” you want to register.  A series of marks means a number of trade marks which closely resemble each other.  The resemblance must be close; they cannot be different spellings for example.
You can have up to 6 marks in a series.   Two marks are included in the price of one application. 


I would recommend you use the all capital spelling for the one option of your series e.g. COMPANYNAME.  This covers the word in any colour, size or font as well as capital or small letters.


The second option could be to print the name exactly as you intend to use it e.g. CompanyName with capital C and capital N.


The next part is the hardest part of the application process.


You have to decide which class your product or service falls under.  There are 45 classes.  35 classes relate to physical products and 10 to services.  Choose the class that best describes your business.  The price of an application includes one class only.  If your business falls into several classes you can add additional ones at £50 per class to your application.

 
Next, you have to write a description of the goods or services you provide.  The purpose of the description is to inform the IPO what precisely you intend to protect with your trade mark. The IPO will use the description to compare your application to other trade marks to identify a conflict.  The description should be precise enough to satisfy the IPO.  But it should not be too narrow, so your business has room to develop without outgrowing the trade mark too soon.

   
Before registering, you should make a list of all the goods or services you want to provide. Then use this list to find descriptions in this search tool: The Trade mark Next Generation Application Trade mark ID Manual.  This tool is offered free by the US Patent and Trade mark Office.  It will help you with your descriptions and classification.  Once you have read through some descriptions in your category you will be able choose a good description and rule out unsuitable ones.  

 

What happens after applying?


First, the IPO will check for eligibility to register.  It will decide if your proposed trademark breaches any of the rules.  If your trademark is eligible the IPO will then search for conflicting trade marks.  
Within 20 days the IPO will send you an examination report which shows if your trade mark is registerable.  It will also tell you of any confusingly similar trade marks already on the register.


If the IPO decides the trade mark is registerable, it will publish the mark in the Trade Mark Journal to give third parties an opportunity to oppose your application. If nobody opposes within two months, your trade mark will be registered.  

 

Special option for startups: RightStart


The normal application consists of three parts: the eligibility check, the search for conflicting marks and the publication.  It costs £170.   

RightStart allows companies to pay only for the eligibility test and search for £100.

 
If the examiner finds no problems you can continue with your application.   You then pay a further £100 and the IPO will publish your mark in the Trade Mark Journal and register your trademark if no objections are made.


If the examiner does identify problems during the eligibility test and search he will let you know and you can discuss the problem with the examiner.  You cannot make changes to your application at this point.  But it will give you a better understanding if you want to attempt the trade marking process again.


The RightStart alternative is ideal if you want to try the application yourself without a trade mark attorney.  It costs £30 more than the normal route, but gives you the opportunity to discuss your name choice with an examiner if your name was examined and found to be unsuitable. 


 
What if my trade mark application gets objected?


Assuming your application fails because another trade mark owner opposed your application you will have lost £170 for the application (or £200 in the case of RightStart).


On a positive note, you will have discovered that your name would have infringed on another company’s trade mark, which may have caused big problems in the future. 


If another company opposes your application and you think the opposition argument is not justifiable you can file an objection.  However, you may want to opt for a different name which is more distinctive and offers stronger protection.

A distinctive name is easier to trademark.


Maintaining your trade mark


Once you own the rights for your trade mark you must use it or lose it.  


Even large companies are not immune to losing their trade mark as the recent case of Ikea shows.  They registered the name Ikea in Indonesia but did not use it for three years, in which time another company started to use the name and therefore earned the rights for it.


You also need to warn others who use your name unintentionally.  Having your name used by others for their products will weaken your brand and threaten your rights as the trade mark owner.

 
You can set up a Google alert for your name, so you can check any unauthorised use online.


You can deal with infringers by making them aware of their infringement by sending a “cease and desist” letter.  You will need a trade mark lawyer at this point.  

 

You can register your startup's trade mark


I hope I have achieved my aim and filled you with confidence to tackle your own trade mark application.  If you have any questions, please leave me a comment in the box below. 


I have one final thought of encouragement.   
I have found the UK IPO to be very helpful towards companies wanting to register themselves. They can be reached by phone on 0300 300 2000. 
The IPO will offer you free help if you have done your background reading about trade marking.  They may not go into specifics related to your company name choice.  But they will try to answer any questions about the application process.