What is a trademark?
Trademarks are used in commerce for distinguishing your goods and services from others.
A trademark can be any word(s), slogan, logo, sound, stylization, smell, colour, that can identify and distinguish your goods or services from those of others.
Trademarks can be formally Registered ® or you can have an unregistered trademark signified by “TM” in superscript.
An unregistered trademark only has effect where that mark has established reputation, e.g. a Nelson business using an unregistered trademark may not be known outside Nelson and so another business may be able to setup in Auckland with the same trademark without infringing. In contrast, a registered trademark gives the owner the right to stop unauthorised use of that trademark anywhere in NZ.
Registered trademarks are also far easier to enforce than unregistered trademarks.
A trademark is registered with respect to particular goods or services that the trademark will be used for, e.g. Cadbury has registered trademarks for chocolate but not cars.
Why register a trademark?
The brand of a business may have enormous value. Having a registered trademark helps you protect that value.
There are many reasons why trademarks can be valuable and we’ve outlined a few below.
Protecting your brand
Owning a trademark gives you the right to stop others using the trademark.
Every business owner understand the importance of branding. A brand distinguish you, your business and your products from others. A brand enables your customers to quickly identify your products and they will be less likely to look for alternatives if they know your brand. A trademark is a mark used in commerce, i.e. a brand.
Registering trademarks gives you an option for protecting that brand value and deters others from using the same or similar trademark in their own business.
Trademarks can convey intellectual and emotional attributes and messages about you, your company, and your company’s reputation, products and services.
A trademark is an asset and can be used in the same way as other assets, e.g. sold, licensed, used as negotiating tool or used as an asset to secure finance.
Trademarks tend to increase in value over time as the reputation of the brand grows. The monetary value of a Trademark is tied to its reputation and the goods or services it related to.
A trademark can be owned perpetually as long as it’s continued to be used in commerce.
Trademarks are relatively inexpensive to obtain and offer potentially huge value. The potential cost to your business of not obtaining a trademark are orders of magnitude higher than the cost of a trademark which in NZ may cost as little as $100 in official fees.
Our recommendation is that regardless of your market, if you’re in business and have a distinctive brand you should consider applying for a registered trademark.
Helps your business
Having a registered Trademark can also assist in:
- trading on online platforms such as Amazon
- exporting from China and other countries
- Tackling cyber-squatting and resolving domain name disputes
Trademarks are assets that add value to your business and can help improve the sale price of your business should you want to exit.
What makes a good trademark?
Not all things can act as a trademark. This section outlines what you can and can’t trademark and what makes a good trademark.
What you can’t register as a trademark
Each country sets rules about what can and can’t be used as a trademark. In general, trademarks can only be registered for marks that can be used to uniquely distinguish your goods and services from those of others.
A few of the main reasons why you can’t register trademarks are:
- Merely descriptive of the associated goods or services e.g. “Nelson Auto Services” for a mechanic in Nelson
- Deceptive or intending to mislead, e.g. “Nelson Auto Services” – for a florist
- Offensive – such as racist, sexist or other offensive language and imagery e.g. “F#$K Auto Services”
- Laudatory marks e.g. “Good Auto Services”.
- Conflicting with an earlier trademark, e.g. you cannot register a trademark for “Apple” for computers as “Apple” have already registered that trademark.
The Intellectual Property Office of New Zealand (IPONZ) has more detail on requirements here.
What makes a good trademark?
A good trademark is something that can uniquely distinguish you, your company or it’s goods and services from those of others. To do so a good trademark should be:
Distinctive – this means it should be different to other trademarks for similar goods, services and industries.
Non-descriptive – don’t try and describe your goods and services with your trademark. You can always accompany the trademark with a separate slogan or descriptive text to tell your customers what you do e.g. register “Mint” as your trademark for auto services not “Mint Auto Services”.
Suggestive – while not necessary, a good trademark may be suggestive or allude to the quality or other characteristic of the goods or services e.g. “SleepyHead” for beds and bedding.
How do you register a trademark?
We’ve included some general information below on the trademark process.
Create a shortlist of trademarks
The first step is to create your trademark. Have a read of our section on what makes a good trademark and brainstorm ideas for trademarks that meet the criteria for good trademark. Work through your ides to make a shortlist of trademarks that you like.
It’s important to conduct searching for existing trademarks and businesses before you commit to a trademark to determine if you will be able to register the trademark. Searching should also include domain name searching to determine if the domain name that you want is available for that trademark.
You can conduct searching for existing registered New Zealand trademarks on the IPONZ website. You will need to conduct general internet searching to locate any unregistered trademarks, domain names or businesses currently using the same or similar trademarks.
If you are considering operating in other countries you can search using the Global Brand Database which is a free searchable database of trademarks from many countries.
Conduct this searching for each potential trademark on your shortlist and identify which ones have potential conflicts. Now make a decision on which trademark(s) you want to pursue.
Obtaining a trademark may seem like a simple process but it is very easy to make mistakes. We have helped numerous people who have applied for their trademarks themselves only to find they made critical mistakes that resulted in extra costs or lost opportunities.
Common mistakes include:
- applying for a descriptive trademark;
- using a trademark that is the same or very similar to an existing trademark;
- not defining the goods and services effectively;
- not using the best form of the trademark for the application;
- thinking that minor spelling changes will avoid infringement and enable them to obtain a trademark.
We therefore highly recommend seeking advice before making an application. It often costs far less to use a professional than dealing with the issues arising from making mistakes.
You can either apply for a trademark yourself at IPONZ or use IPiphany or another professional to file your trademark application.
The process and timing of events after making an application vary by country but typically involve:
- Examination – in most countries trademarks are examined to check that all the requirements have been met, this includes conducting searching to identify any potentially conflicting trademarks.
- Acceptance – once the application no longer faces any objections in the examination phase the intellectual property office will issue a notice accepting the trademark application.
- Registration– once all requirements are met after acceptance the trademark will be registered and a certificate issued.
Once you have a Trademark
Once you have a registered trademark you can take action against anyone who infringes the trademark, i.e. if they are using the trademark in commerce for the same or similar goods or services for which the trademark is registered for.
You should mark your trademark in your marketing material and packaging with the ® symbol indicating to others that the trademark is registered, e.g. IPiphany®
A trademark must be renewed every 10 years to be kept in force. If you don’t use the trademark it may become vulnerable to cancellation.
Warnings and MythBusting
There are many common mistakes made by people when it comes to trademarks, these can lead to lost opportunities or huge costs.
File an application first
File a trademark application before you commit to using the brand in your business. You will then find out if you can register the trademark and avoid the need to re-brand. It can be costly to change your brand once you’re established
Don’t tell your competitors
You should apply for your trademark before telling your competitors about your brand. If not, they may file the application first and prevent you from obtaining the trademark.
Seek advice on infringement
Determining whether or not your trademark can be registered or infringes another trademark requires expertise. Seek advice before making a decision.
For example, don’t think that by changing spelling you can avoid infringement, e.g. Coka-Colla still infringes Coca Cola®
These are some common myths you’ll hear about trademarks.
- “I have NZ Companies Office registration so have secured my name” – NO, a company registration doesn’t give you any rights to prevent that name being used as a brand by others in business, or indeed stop others from registering a trademark for that name.
- “Change it by 20% and I won’t infringe” – NO, determining if a trademark is infringed has nothing to do with percentage similarity. There is no percentage rule.
- “I have trademarked my idea, book, invention, movie… etc.” – NO, a trademark is for marks that are used in commerce and cannot protect an idea, book, invention or movie. There are other forms of Intellectual Property for those things.
- “Only words and logos can be trademarked” – NO, trademarks that have been registered include combined marks (word + logo) smells and colours.