How and Why to Create

A Trademark Strategy From Early On

It can be very beneficial for a startup to conceptualize a trademark strategy during its
early stages of operation. The strategy can improve and adapt with time as the business
of the startup evolves further. However, the strategy also provides additional direction
to the branding process of the business. The strategy should address how the business
can create maximum brand value through registration of trademarks, and lay down
practices on how it can protect existing trademarks from dilution/ infringement. The
strategy serves as guidelines for managers and senior employees of the company.

While the law provides remedies to a trademark owner (or an authorized user) for
infringement or dilution of his trademark, an effective trademark strategy should lay
emphasis on timely identification of possible instances of infringement, in order to
minimise any losses. If infringement is discovered too late, the infringer has an
opportunity to argue that his mark has already acquired an identity with respect to the
products/ services associated with it in the market that is served by the infringer. This
is known as ‘​honest concurrent use​’, and if a court accepts this argument, the
trademark owner will not be able to invoke legal remedies against such infringement.

Pointers for a creating a trademark strategy

Based on the observation of trademark strategies of various successful companies, we

have mentioned certain pointers below:

1. The name of the business entity and its products can be different. For example,
the brand Café Coffee Day is held by a company named Amalgamated Bean
Coffee Trading Company Ltd. Note that the name of the entity can be
independently trademarked if it is used in connection with products. For
example, the names Lux and Pears used for bathing soaps (manufactured by the
company Hindustan Unilever Limited) can be trademarked. At the same time, it
is possible to have a trademark over the name (or a portion of the name) of the
manufacturer as well – for example, ‘Microsoft’ and ‘Windows’ are both
independent trademarks, which are owned by Microsoft Corporation in US.

2. From a valuation perspective, it may be helpful to separate the products or

services into distinct brand names or independent categories (so as to maximise
the value of each product or service, and as a consequence, the total valuation
of the intellectual property). For example, products under a premium range
could be classified into a unique category (say, for example, a ‘Rainbow-Stretch’
series for a range of LCD displays, or Vivanta for a certain segment of Taj
hotels). Or, business whose products have many variants should consider giving
different names to each variant. For example, Vista and Azure are two different
kinds of products, which are eligible for independent trademarks. This has
various advantages:

a. It enables the business to ​sell or license a specific product/category

independently to an acquirer to monetize the intellectual property for the

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 business, while the business continues to utilize the other categories by
itself. For example, Microsoft could license Windows 7 to IBM for
installation in personal desktop computers, but retain all rights on
Windows NT (as a separate trademark) for installation on server
machines.

b. It reduces risk - Not all products may perform equally well. Some
product or service lines may be more successful in their market segment
than others. Having the same brand name for all products can adversely
affect the value of the successful products. For example, Volkswagen
owns about 9 other car brands (apart from the name Volkswagen), such
as Skoda, Audi, Bentley and Lamborghini. These have all been given
different brand names depending on the market segment.

3. You may consider registering trademarks for any unique taglines associated with
your business – e.g. ‘Impossible is nothing’ by Adidas or ‘Yeh Dil Maange More’
from Pepsi. A series mark can also be a useful tool in certain circumstances (see
discussion under the chapter on Registration of Trademarks.

4. If a third party is engaged to perform marketing or other services, e.g. a PR

agency or advertising agency for devising your marketing and advertising
strategy, the contract between the business and the service provider must
specify that all rights in any of the taglines shall vest in the business, and the
business will be free at any point in time to apply for trademarks in respect of
any names or taglines prepared by the agency. This will also be the case in the
event of a joint venture. The contract may also specify (although this may be
difficult to negotiate) that the agency cannot use similar campaigns for
competitors.

5. The trademark strategy should be made with reference to the target market,
because trademark protection is granted by an individual country. Registration of
trademark in India will not grant trademark protection in the US or UK.
Therefore, if a business primarily exports goods or services then it is very
important to apply for and obtain trademark registrations in the countries where
the target market is situated. For this, doing some preliminary online searches
and engaging foreign lawyers may be helpful.

6. It is important to prevent others from registering trademarks in respect

of brand names used by your business. ​If you don’t enforce your trademark
actively, you will suffer financial loss and legal disadvantages too. Trademark law
can grant some kind of legitimacy to infringers in the name of ‘honest
concurrent use’ to others who have innocently started using a similar name, or
protection in the name of a ‘generic word’, that is, a word that has become so
popular that it is essential to describe a particular kind of product itself (and not
just a manufacturer). For example, Xerox can be considered as describing all
photocopying machines, and not just photocopiers made by Xerox.

Under trademark The simplest way to do this is by checking the Trade Marks
Journal (​a fortnightly publication which is accessible for free on the
government website at ​http://ipindia.nic.in​) periodically for public notices of
proposed trademarks – if a mark similar to the brand name is published, you will

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 have an opportunity to file an opposition with the Registrar of Trademarks within
4 months from the publication in the journal.

Separately, it is important track any misuse of proprietary keywords for ads on

sites such as Google. Similarly, internet searches will enable you to discover any
potential infringers or instances of infringement and take action to stop it. See
the discussion in the chapter on Trademark Infringement in Cyberspace.
Businesses with a large trademark portfolio can consider having dedicated
officers for this purpose.

7. In order to create goodwill and notify the public that a particular mark has been
created and is being used by a particular business (but which has not been
registered), it must use the ™ symbol.

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under applicable law.