Trade Mark Registration is all about Spending and Making Monies
When we talk about trademark registrations, the immediate association is often with the possible substantial costs involved in safeguarding one’s valuable trade mark rights. However, what if we shift the focus to the potential bright future where, after successfully establishing a brand in the market, you can monetize your trademarks by either selling them along with your business, or licensing them to distributors and franchisees in return for a stable income stream. In such scenarios, the initial registration expenses may seem trivial in comparison.
This monetization model is not a novel concept at all, and it requires your meticulous planning and effort, probably with some luck too. Anyway, we have no mood to feed you with some old news. Instead, please allow us to share our own unique journey in relation to making a small fortune from a trade mark registration.
Story Background and What is a Letter of Consent
One day, we suddenly received a letter from another law firm out of the blue. This letter sought a letter of consent from our client, as their client’s trademark application had been rejected by the Hong Kong Trade Marks Registry as it is confusingly similar to our client’s registration. Pausing here, if you are new to trade mark applications, you might wonder what a letter of consent is. It’s indeed a magical document that can significantly enhance the chances of turning a rejected application into a successful registration, as the Registry attaches heavy weight on such consent from the owner of the prior mark. In the world of trademarks in Hong Kong, we say the letter of consent is the King!
Honestly, what would your initial reaction be upon receiving such a letter? Probably most of us would likely have no inclination to entertain such a request. There seems to be simply no incentive to do a favor for others, especially when their mark closely resembles ours. Fair enough! However, we will now take you to think a few moves deeper before you consider if granting a letter of consent or not serves your best interests.
Trademark Conflicts Don’t Always Equate to Business Conflicts!
When applying for a trademark, you must select the classes you wish to cover. For instance, if you operate a restaurant, you’ll apply for class 43 to protect your core interests. But for comprehensive trademark protection, you might also consider class 32 for your signature non-alcoholic beverage. Class 32 is somewhat peripheral in this context.
Now, imagine that there’s another healthcare company in the market with a similar name to your brand. They apply for class 5 (healthcare products) but also want to extend their protection to class 32 (for their beverages, which may or may not be considered healthcare products). This seems reasonable.
Here’s the intriguing part: while a restaurant and a healthcare product retailer may not have significant conflicts of interest, both apply for a trademark in class 32, resulting in a clash of trade mark rights. Nonetheless, it’s unlikely that their target customers would confuse one for the other. From a technical perspective, there appears more room for the coexistence of these two marks. This situation differs significantly from when the marks are identical, potentially leading customers to believe that one enterprise is expanding its business from one domain (restaurant) into another domain (healthcare products).
Suffice to say, in our case, we see some fundamental distinctions on the nature of the businesses of both parties, and we’ve conveyed these observations to our client, and they are shared by our client too. However, this is not yet the end of story, and there are other critical aspects that require attention.
Financial Incentives for All Parties
Our client is in fact a tiny local enterprise. We have therefore dual concerns. First, we believe our client would be pleased to earn some revenue from their trademark registrations. Moreover, if we were to refuse a letter of consent, the opposing party might initiate aggressive actions against our client sometime in the future, even without any valid reasons. This could impose substantial time and financial pressure on our client.
On the flip side, we must remain grounded in reality. It’s almost improbable that the counterparty will extend a lavish lump sum to our client only for a letter of consent to secure their own trademark registrations. We can only make an educated guess that they may be facing limited alternatives, and we want to maximize our advantage in this situation.
Additionally, there are inevitably transactional costs involved. Understandably, the longer the negotiation process, the higher the costs incurred by both parties. This means that being direct when striking a deal is essential. If our negotiation costs are roughly equivalent to or even higher than the amount to be paid to our client, what’s the point for our client to grant a letter of consent, even if their business interests remain unharmed anyway.
Ultimately, after three rounds of negotiation conducted within a short span of time, both parties successfully struck a deal. Our client was able to reap a small fortune of a few times the costs they spent on the registration (after deducting our fees). The counterparty also secured a trade mark registration at reasonable additional cost. We also manage to earn a modest fee but more significantly, we take pride in our ability to execute a meticulously devised strategy that fulfills our client’s commercial objectives to their satisfaction.
Origin’s Approach and Standard
This is our approach to handling trademark issues. We put ourselves in our client’s shoes and strive to achieve the best outcome by combining our legal expertise with a commercial mindset. Our flexibility shines as we craft customized strategic planning by taking into every single detail of the factual matrix to cater to each client’s unique needs. If you like our approach, please don’t hesitate to get in touch with us. We’re here to help you navigate the intricate world of trademarks and seize unexpected opportunities.
Origin is a boutique IP service provider in Hong Kong with global 500 clients. We could always be reached at tsminfo@originbc.com if you have any questions.
