Everything You Need to Know about Trade Marks

Whether you are protecting a brand for a large corporation or a small startup, understanding the nuances of trade mark protection is critical. This knowledge not only safeguards the brand’s unique identity but also ensures you are not inadvertently infringing upon another brand’s intellectual property—a misstep that can lead to costly legal battles and damage to the brand’s reputation.

Tesla‘s struggles serve as an example of the importance of securing intellectual property rights early on. Elon Musk’s initial hurdle in obtaining the Tesla trade mark illustrates the potential challenges and costs that can arise when a desired trade mark is already owned by someone else.

In Tesla’s case, “Tesla Motors” was already registered in 1994 by Brad Siewert, long before Elon Musk’s company planned to use it. When Musk’s team approached Siewert in 2004, they discovered that negotiating for IP rights can be a complex and costly endeavour. The unwillingness of Siewert to sell the IP rights initially might have been a strategic move, knowing the potential value it could hold for Musk’s burgeoning electric car company. Eventually, the negotiation concluded with Tesla acquiring the trade mark for $75,000—a figure that pales in comparison to Tesla’s market capitalization at the time, which was around $60 billion. This transaction highlights the relative low cost of securing a trade mark in comparison to the overall value it contributes to a brand’s equity.

The struggle did not end with the trade mark; securing the domain name posed another significant and costly challenge. The tesla.com domain was not in the hands of Tesla until over a decade after the company was founded, costing an astounding $11 million. This demonstrates the critical nature of digital real estate in the modern business landscape, where a domain name can be as valuable as a trade mark, if not more so, in establishing a brand’s online identity and presence.

Tesla’s trade mark tale is a reminder of the importance of intellectual property in establishing and maintaining a brand’s identity. It should capture the attention of any business, big or small, underlining the necessity of proactive and strategic intellectual property management.

Let’s delve deeper.

What is a Trade Mark?

In order to effectively protect a trade mark (or otherwise referred to as a “brand”) and avoid possible infringement, you need to understand the basics of IP law and what could be done to best protect your rights. A trade mark is anything capable of being graphically represented, with the main purpose of distinguishing the goods and services of one business from those of another. In the context of marketing, it is an expectation, a promise, a relationship. Like a brand name, it is infused with audience relevance, competitive differentiation, sustainability, credibility, graphic potential, and personality – but there’s more to it.

Trade marks are badges of origin, serving to identify and advertise their owners’ products and services in a competitive marketplace, guarantee consistent quality, and even indicate manufacturers’ acceptance of responsibility. It is the embodiment of the relationship that is cultivated between the brand and its audience over time. Consumers come to associate a particular level of quality, experience, and satisfaction with a trade mark, which in turn, fosters brand loyalty.

Different Types

Trade marks come in various forms, each with their unique characteristics and purposes. Here’s a more detailed look at the different types to garner a better understanding of how to apply each in protecting your brand and preventing infringement:

  • Word marks – These are textual characters that represent a brand. Think OMO detergent and MRS BALL’S chutney. These might be business names, brand names, slogans, or even sub-brand variants. Although a trade mark can also be a normal word found in the dictionary, it must serve the purpose of distinguishing products and services of different parties from one another and should not directly describe the goods or services in respect of which they are used. A perfect example is the trade mark APPLE which is descriptive of a type of food but does not describe electronic equipment.
  • Devices – These include logos and other visual symbols associated with a brand. For example, the distinctive logo of “Nando’s” or the iconic combination of numbers like “Levi’s 501” jeans. Letters can also serve as device marks if they are represented in a special form, such as Woolworths’ “W,” Facebook’s “f,” or Netflix’s “N”. In the case of single letters, the mark’s distinctive value will be in the visual representation or distinctive styling.
  • Signatures– There are actual signatures that have become synonymous with a brand or a person. For instance, “Picasso”, “Taylor Swift”, or “Jack Daniels” are all signatures used on products or packaging, recognised as signs of authenticity and origin.
  • Service marks– Similar to word marks, these are used to identify services rather than goods. For example, “OUTsurance” uses the suffix ‘surance’ to allude to their offering in the insurance sector.
  • Shapes– Some products are recognised by their unique shape, like “Toblerone” chocolate bar; known for its distinctive shape as a series of joined triangular prisms. The shape itself is a symbol of the brand.
  • Containers– These are the unique shapes or designs of the containers that contain products. An example is the “OLMECA Tequila” bottle, which features distinctive engravings that make it stand out from other bottles.
  • Packaging/get-up– This refers to the overall look and feel of a product’s packaging. A classic example is the “McDonald’s Happy Meal” box, which has a distinctive appearance that children and adults alike can easily recognise.
  • Colours– Certain brands are strongly linked to a specific colour, to the extent that the colour itself functions as a trade mark. “Tiffany & Co.’s” iconic robin’s-egg blue hue, known around the world today as “Tiffany Blue”, is a primary example of a colour that is intrinsically linked to the brand.
  • Trade dress – This encompasses the visual appearance, including the shape of a product or its packaging, that signifies the source of the product to consumers. The shape of “Guerlain’s” 3D lipstick design is an example where the distinctive design elements of the product shape are protected as a trade mark.
  • Sounds– These are distinctive sounds that, when heard, are associated with a particular brand or product. The “BMW” horn or “Harley-Davidson’s” engine sound can serve as trade marks. However, the bar for registration of a sound is extremely high and the public must be able to recognise it as an indicator of origin, without any other context.

Why is it important to know the different types?

Each element of the trade mark serves to add a layer of distinctiveness, acting to uniquely identify and strengthen the trade mark, like a silent salesperson. It’s important to understand the nuances of each type to ensure that the correct form of protection is sought and that the IP rights can be effectively leveraged.

The case of the Lindt Easter Bunny and the company’s attempt at trade mark registration, perfectly illustrates the importance of understanding the different types. Having been marketed for over 30 years, and with more than 500 million sold in Germany alone, the company figured that it had established the shape of the sitting bunny as distinctive enough to be eligible for registration. When the trade mark registration application was unsuccessful, the company filed for registration of the distinctive gold foil wrapping. Supported by market research which showed that 70% of the consumers surveyed associated the gold with the bunny, Lindt was successful in its registration the second time around.

Why Register a Trade Mark?

Unregistered trade marks are protected by the common law, but these rights are harder to prove. This is because evidence of your common law rights needs to be adduced to be proven, while a certificate of registration is proof of your registered rights in a trade mark and can be relied on without additional evidence, as long as it remains in force. So, if a lot of money is being invested in a brand, or the brand owner intends to use the trade mark/s for a long time, it is advisable to register them.

Reasons to Register your Trade Mark

Registration has many benefits for your brand, in that it:

Assists with the enforcement of the exclusive rights to use a trade mark;

  • is proof of the owner’s rights;
  • gives notice of these rights to others in the market;
  • facilitates attack and defence if this is necessary; and enables commercialisation and licensing.

However, it is important to remember the principle of “use it or lose it” in trade mark law, which serves to ensure that the industry is not limited by allowing marks that are not used to remain registered and potentially prevent others from using that trade mark or a trade mark that is similar thereto. If a trade mark is not used for a continuous period of 5 years or more after registration it can be attacked and removed from the register on the grounds of non-use It cannot remain on the register as a “defensive” trade mark if the owner does not truly intend to use it but, as long as it is used, it can be renewed every 10 years in perpetuity.

Trade Mark Classification

The international trade mark classification system, also known as the Nice Classification, is a critical tool in the registration and management of trade marks globally. Established by the Nice Agreement (1957), this system categorises trade marks into 45 distinct classes – 34 for goods and 11 for services – each encompassing a different category of products or services. Why is classification so important? The purpose of classification is to streamline and standardise the trade mark registration process across different countries, making it easier for businesses to protect their marks internationally. It’s impossible to register in every single class. You can’t have a monopoly over your mark in every category because it is unlikely that a trade mark will be used for all conceivable goods and services. As such, registering a trade mark in the correct class and for the applicable “items” (specific goods and/or services) can be tricky, and the appropriate mix of general terms and specific items secures both validity and offers a broad scope of protection.

Be aware that trade marks often apply across classes via “line extensions”, like “Adidas” shin guards, backpacks, swimming goggles, and hockey sticks; in addition to the traditionally recognised “Adidas” products, or a range of branded sauces (think “Spur” barbecue sauce), that might be sold outside of a company’s own stores.

The ‘R’ vs the ‘TM’

The ® symbol (an encircled sign), often seen in advertising and on products, is a notification that a particular word, phrase, symbol, or design is a registered trade mark. While the use of this symbol is not mandatory for enforcing IP rights, it serves as notice to third parties that the owner of the trade mark claims registered rights.

When a trade mark is registered, the rights to that mark are legally enforceable regardless of whether the ® symbol is used. This means that the trade mark owner has exclusive rights to use the mark on the goods and services for which it is registered, and these rights can be enforced in a court of law. If another party uses the mark without permission, creating a likelihood of confusion as to the source of goods or services, the trade mark owner can pursue legal action for trade mark infringement.

However, the use of the ® symbol does have practical benefits:

  • Public Notice: The symbol acts as explicit notice to the public and potential infringers that the mark is a registered trade mark. This can prevent accidental infringement by making others aware that the owner has formally secured its trade mark rights.
  • Legal Advantage: In some jurisdictions, the use of the ® symbol can have legal benefits. For example, in the United States, the use of the symbol can increase the quantum of damages that a trade mark owner can receive if they win an infringement lawsuit.
  • Deterrence: The presence of the ® symbol can deter potential infringers who might otherwise use the mark, as it indicates that the owner is vigilant about protecting its intellectual property rights.
  • Enhanced Protection: Using the ® symbol can help in establishing the owner’s claim to the trade mark in a legal dispute and may also be relevant in cases of counterfeit goods.
  • International Considerations: While the use of the ® symbol is recognised in many countries, the implications can vary internationally. In some countries, improper use of the symbol for a mark that is not registered can have legal consequences.

In cases where an owner does not use the ® symbol, they can still enforce their rights against an infringer. The owner can seek an interdict (an order to prevent further infringement) and may also claim damages from the infringer.

Knowledge of the registration by the infringer is not necessary for the owner to take legal action. However, using the ® symbol can facilitate a smoother legal process by proving that the infringer was aware, or should have been aware, of the registration.

International Trade Mark Registration

The misconception that a trade mark can be protected globally under a single registration is a common pitfall for brands and businesses. The reality is that protection is territorial, meaning that rights are generally limited to the country or region in which the trade mark is registered. Therefore, it’s critical for a trade mark owner to consider and secure registration in all the territories where they are currently operating or planning to expand.

When initially exploring options, especially during the creative process for developing a logo or brand identity, conducting an informal search using a search engine like Google can be a quick and cost-effective preliminary step. This initial search can help identify obvious potential conflicts with existing trade marks or brands that are already in use. This is particularly useful in the early stages of brand development, where a marketing company or an advertising agency is generating multiple concepts for a client’s consideration.

However, while an informal search can flag some issues, it is not a substitute for a formal trade mark clearance search. A comprehensive search should be conducted by a professional, preferably an IP attorney, who can review not just direct hits, but similar marks, common law usages, and other factors that a simple search engine query may miss. This formal clearance process is essential because it minimises the risk of trade mark infringement and the likelihood of costly legal disputes in the future.

Advertising and marketing agencies often work with clients to develop branding materials, and it is crucial to establish clear terms regarding who is responsible for performing the clearance search. This agreement should be set out at the beginning of the client relationship to avoid misunderstandings or disputes later on.

Once the trade mark is selected, a classification determined, and ownership decided, the application process can begin. Filing the application is the next step, followed by the registration process, which may involve responding to any objections or oppositions from authorities or third parties.

Finally, registration is just the beginning of ongoing IP management. The owner must use the trade mark in commerce to maintain its rights, monitor for potential infringements, and renew the registration as required by law.

Good Practices for Usage

Trade mark genericide occurs when a mark becomes so common in everyday language that it is no longer associated with the original brand, but rather with an entire category of products or services. This phenomenon can strip a trade mark of its distinctiveness and its ability to function as a source identifier in the market, ultimately leading to a loss of IP rights. This is what happened with once proprietary names like “Aspirin” and “Escalator”, which are now commonly used terms for the products they once uniquely signified.

To prevent genericide and maintain the distinctive character of a trade mark, brand owners should consider implementing a strict protocol for proper IP usage. Here are some strategies to maintain a brand’s distinctive character:

  • Vigilant Monitoring: Regularly monitor how the trade mark is used in the market by both authorised users.
  • Taking swift action against unauthorised or incorrect usage is key to preventing dilution of the distinctiveness.
  • Enforce Usage Guidelines: Establish and distribute clear trade mark usage guidelines to all stakeholders, including employees, customers, partners, and the media. These guidelines should specify how the trade mark should be used in different contexts, including digital and print media.
  • Consistent Presentation: Use trade marks consistently in the same style, font, and colour. Avoid altering the trade mark unless there’s a strategic rebranding effort underway, and even then, such changes should be carefully managed.
  • Adjectival Use: Always use the trade mark as an adjective followed by a generic term for the product or service it represents, not as a noun or verb. This helps reinforce the connection between the trade mark and the brand in the public’s mind. For example, use “Kleenex brand tissue” instead of just “Kleenex.”
  • Symbols and Notices: Use the appropriate symbols (™ for unregistered trade marks and ® for registered trade marks) in all communications. This alerts the public to your claim of IP rights and can act as a deterrent to improper use.
  • Educate Stakeholders: Train employees, marketing agencies, and anyone else who uses the trade mark on the importance of proper usage. Regularly reinforce the value of the trade mark and the potential harm of genericide.
  • Promote Correct Use in Marketing: Ensure that all marketing materials, including digital content and advertising campaigns, use the trade mark correctly. This includes not only the brand’s own materials but also those of affiliates and partners.
  • Legal Action when Necessary: If a third party is misusing the trade mark, don’t hesitate to enforce your rights through legal channels. Legal action may include cease and desist letters, negotiations, or, if necessary, litigation.
  • Consumer Education: Educate consumers on the correct use of the trade mark. This can be done through advertising campaigns, informational materials, and even direct engagement on social media platforms.

By adopting these strategies, a company can protect its IP rights from becoming generic and maintain their value as assets. Maintaining a mark’s distinctiveness is an ongoing process that requires attention and action. A trade mark is not just a legal right but a key component of a brand’s identity and its relationship with consumers, and preserving its uniqueness is crucial for long-term brand success. Trade mark recognition is the cornerstone of brand identity and value in the marketplace. It is the means by which consumers identify, choose, and stay loyal to a particular brand over its competitors. Establishing and maintaining this recognition is not a once-off effort but a continuous and rigorous process that demands consistency and vigilance.

For any business, regardless of its size, the strategic use and enforcement of IP rights are critical for safeguarding the brand’s identity and market position. Companies must recognise that their marks are not just symbols but vital components of their commercial identity and the perception of their brand.

By Louise Myburgh.