What Startups Need to Know About Trademarks

There are countless demands on new startups, but one that is all-too often overlooked is trademark protection.   There are doubtless many reasons why this is the case, but if more startup owners looked a little deeper into what a trademark is and does, that will likely change.

Trademarks are a key indicator of source and quality, which makes them as valuable an asset as your product.   If you’ve developed something unique and you’re first to market, it’s inevitable that someone will develop something similar.  But the fact that the product is initially associated with your trademark will make your competitor’s product a cheap knockoff of the original, at least in the eyes of the consumer.   Conversely, if you’ve introduced something that is similar to an existing product, your trademark will be a key part of the marketing strategy that will help you overtake them.

The most important trademark to be initially protected is your company name, followed by the name of your product or service (unless they’re identical).   The first step of that process is to conduct a search to determine whether the mark already belongs to someone else.  This needs to be done before you spend time and money on incorporation and sales materials.

Once a mark has been cleared trademark applications should be filed with the U.S. Patent and Trademark Office.  As your company begins to take off, you should start exploring avenues of foreign protection, because a U.S. trademark will only protect the mark in the United States.  Although the process of protecting your trademark overseas may seem daunting, it is important to note that one application can be filed to cover the entire European Union.

In addition, if you’re producing your product in another country, you should also seriously consider protecting your trademarks in that country.  The U.S. is a  “first to use” country, which means that the first user of a trademark automatically obtains rights in the mark.  However, the majority of countries in the world are “first to file” countries, in which the first applicant of a trademark can obtain the right to use it even if you’re the rightful owner.   In many cases, whoever obtained the rights will demand an absurd amount of money to turn them over to you.

 

Seth Heyman
Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.