The importance of intellectual property to start-ups

Intellectual property (or “IP”) rights can provide protection for some of the most valuable assets of a business.

A business can derive value from its IP in numerous ways, including:

  • building a strong brand that attracts both customers and investors
  • selling or licensing its IP to other parties, generating additional revenue; and
  • using its IP as security for loans and other investment.

IP rights promote innovation and incentivise investment, along with discouraging copying.

IP can be vital to the success of your start-ups, yet is often overlooked. Given its importance in creating and preserving a brand it is worth taking the right steps at the start of a business’ life to protect your IP.

What’s in a name?

Choosing a business name is a significant step for start-ups. The right name can enhance your brand by conveying messages about your business’ qualities to the rest of the world.

Having invested time and effort in choosing a name, the best way to protect the integrity of your brand is to register it as a trade mark.

What’s a trade mark?

Trade marks are signs that are a “badge of origin” for your business, in that they enable consumers to distinguish your products or services from those of other traders.

Trade marks are not limited to words, but can also include numbers, slogans, shapes, sounds, logos and colours, or a combination of any of these.

Trade mark rights are territorial. When seeking protection, businesses should consider all relevant countries where products or services are being (or could be) offered. Trade mark applications will need to be made to local Intellectual Property Offices.

Can I register my name or brand trade mark?

The answer is yes, but, to be registrable, a trade mark must meet certain requirements:

  • Capable of being represented graphically (in essence this means you must be able to represent it on paper).
  • Distinctive for the goods or services for which it is intended to be registered.
  • Not identical or confusingly similar to existing marks registered for identical or similar goods or services.

Why register? Obtaining a trade mark: a two-stage process

If you don’t register your trade mark, then someone else can, endangering your business’ goodwill and reputation. Whilst it is still possible to take action against others when your mark is not registered, this is more complicated and expensive. Registration is much more straightforward as it gives you the automatic right to take legal action against parties using your brand without your consent. It also allows you to put the ® symbol next to your brand, acting as a warning sign to others.

The process of registering a mark can be broken down into two stages.

  1. The search phase Firstly, to avoid wasting time and money at a later stage, it is critical to ensure that you will be free to use the mark. Carrying out a trade mark “clearance search” enables you to check whether there are any existing registered trade marks or applications that would prevent you from using your brand name. In addition to clearance searches, it is worth doing general internet searches and checking other databases such as Companies House to find out whether there are any identical or similar marks already being used for the goods for which you intend to register. In the digital age, it is also essential to check that the domain name you would like to use is available.
  1. Applying to register a trade mark – UK or European Union Trade Mark? You can choose whether to apply for a UK national trade mark or a European Union Trade Mark. A EUTM offers you protection throughout the EU with one single registration, however it is an “all-or-nothing deal”: you must get it all for all Member States or not at all. This means a lot more due diligence in the initial search phase.Registering a standard UK trade mark costs approximately £900 and registering a EUTM costs in the region of £1,700. In addition, the timeline for registration of a EUTM is longer than for a UK trade mark.

Deciding which type of trade mark is suitable for your business will depend on whether you plan to operate exclusively in the UK, or if you envisage trading in multiple EU states.

Post-registration: using and maintaining your trade mark

Unlike some other IP rights, there is no time limit on protection to trade marks, as long as renewals are carried out (usually every 10 years). Importantly, the mark must also be validly used in substantially the same form as it was granted. If you decide to update your branding and make changes to how you use your mark, it is wise to seek advice on whether new trade marks applications are necessary.

Finally, as well as using your own trade mark correctly, be alert to others using or attempting to register identical or similar marks and consider whether action is required. There are many trade mark “watching” services available which will monitor any third parties that might infringe your mark.

Finally some best practice tips:

  • Choose new trade marks carefully to ensure they meet registration requirements
  • Avoid descriptive words and slogans that run the risk of being generic
  • Check that the domain name you wish to use is available
  • Carry out due diligence to make sure the marks you wish to use are not already being used by others
  • Register your trade marks in key jurisdictions. This acts as a warning to others
  • If you discover any of your trade marks are being misused, take action immediately.