The Real Cost of NOT Registering your Trademark

We can all see the appeal of saving unnecessary expense, especially in today’s money-conscious climate. But what is the real cost, and therefore loss, to your business of not registering your brand identity or trademarks?

There is no legal obligation to register a trademark before using it. However, without the benefit of such protection, you are limited in what action you can bring against others who may be diverting your custom or affecting your business in some other way.

You are also limited in what defences you can rely on when accused of acts of infringement from owners of later-filed registered trademarks.

For franchisors, or potential franchisors, trade mark registration is crucial for the smooth running of a franchise, while prospective franchise owners should make sure that the brands they buy into are adequately protected.

Use of an unregistered mark might prevent someone else registering a similar mark – at least in the UK. But if they do succeed in getting a registration, your business could be restrained from expanding both in the products and services being provided and the geographical scope of where these might be purchased. The cost to your business could be very serious.

Enforcement of unregistered trademark rights is provided via the common law tort of “passing-off” in the UK, which provides a remedy where a business has been trading under an unregistered trademark for many years and a rival business starts using the same or similar mark.

As a result, passing-off cannot be used to protect a trademark that is new, with little reputation, or where no trade in the UK has taken place. Bringing a passing-off action can be very costly and equally uncertain in its outcome.

But with a registered trademark, the owner has a five-year period following the date of registration to put a registered trademark into use. It is much easier to take legal action when you have a registered trademark and if counterfeit goods are involved, Trading Standards and the Customs authorities will be quick to help you.

Can you save money by filing a trademark application yourself? Many people try, and some companies offer a DIY filing service, offering no advice and with applicants doing much of the work themselves. From our experience, there are so many pitfalls with the drafting and filing that self-filed applications rarely give adequate protection and, in the worst cases, the applications are simply invalid.

Good advice really is an essential investment: you wouldn’t consider doing your own office or factory conveyancing. You might save a few pounds with a DIY solution, but if you get it wrong, the rights at the heart of your whole business model could be in trouble.

An application to register a trade mark can be filed at any time, even several years after starting use of a trademark. Don’t rely on unregistered rights, and don’t try to do-it-yourself.

If you are an established franchisor or considering franchising your business, please register today to take advantage of our FREE advice and guidance.