“Do I Need a Trademark? 10 Things You Should Know”
“7 Reasons Why Trademarks are Important for Startups”
“Why Trademarks Are So Valuable for Your Small Business”
The above are some headlines easily found and randomly selected from a google search! From a strategic standpoint, business owners nowadays are overwhelmingly advised that they can ill afford the non-registration of their trademarks.
Pausing here, have you ever had a single moment challenging this piece of “good” advice – Do we really need to mandatorily trademark our business name? That must be one of the weirdest topics that ever appeared on the websites of trademark agents. It is just like discussing “why shall we respect teachers on a forum at the Teachers’ Day?” Raising this question says a lot about Trasomark. We are just prepared to talk about any issue which may do you good, DIY Trademark lovers.
Naomi Klein– No Logo
Around twenty years ago, Canadian journalist Naomi published the book “No Logo – Taking Aim at the Brand Bullies”, drawing worldwide attention at no time. “It vividly documents the invasive economic practices and damaging social effects of the ruthless corporatism that characterizes many of our powerful institutions. It tells a story of rebellious rage and self-determination in the face of our branded world, calling for a more just, sustainable economic model and a new kind of proactive internationalism.” (https://naomiklein.org/no-logo/). The author pinpointed that the production costs of the international brands accounted for no more than a fraction of the retailing prices of the luxurious products they offered, thanks to child labour and all sorts of illegal/ substandard/ immoral practices. Instead, the brands saved big money on marketing in maintaining the brand images, and the sky is the limit for star spokesmen fees.
While “No logo” is not necessarily against the trademark system itself, it gives us a timely wake-up call of how we should make better use of the monopoly right offered by the modern trademark regimes.
A Report in Europe
I still vividly remember how shocked when reading a report discussing that trademarks are simply not necessary in general, thus calling for radical reforms in trademark laws. Their arguments run like this. If you pay US$10.00 for a counterfeited “Burberry” scarf with a trademark check pattern at a market, would you go to their nearby flagship store to buy an authentic one at US$400.00? Likewise, if you feel so lucky to buy the said “Burberry” scarf at US$400.00 during the big sales (enjoying a 30% discount off!), would you be pissed off if invited to buy a fake one at US$10.00? As such, the two markets are obviously separated by prices themselves even in the absence of intervention by the trademark laws. The report however went on to suggest that certain products such as drugs, foods and personal care products may receive special treatments, as any (substandard) counterfeits may be harmful to human beings, and that’s when trademarks should come into play.
This report offered us a brand new and interesting perspective on whether trademark laws fit squarely into our modern commercial world. While the “Burberry arguments” clearly has its weight almost non-rebuttable at first sight, our second thoughts indicate otherwise. When you think more clearly, the reals and fakes may not always be separated by prices, notably for household items such as tea bags, screwdrivers, batteries, etc. We believe that trademark law still has its role to play when come to regulating the market.
How a Trademark Helps Your Business
As Naomi rightly put it, international brands squeezed for the lowest production costs (as strikingly low as 1-2% of the retailing prices. Putting aside the moral issues for a moment, isn’t it equally amazing to realize how lucrative a business could be once a brand is successfully built? Why are the customers happy to take up such a huge premium?
Well, the answer is not straightforward but trademark protection certainly plays an important part in it. You will first have to understand that a trade mark is conventionally defined as a badge of trade origin, i.e. to distinguish “Burberry” branded goods/ services from others. Simple as it appears, why do we need trademark laws in the first place? Put it in another way, why is it so important to distinguish the products of “Burberry” from others from a commercial perspective?
Under a vivid market economy, a rich variety of products and services provided by different entities will be made available. So not surprisingly, before Peter was a wall of different branded biscuits when he went for some snacks ahead of the live game between Manchester City and Liverpool. Biased by the red packaging, Peter (a Liverpool fan) randomly selected the “ABC” branded biscuit and found it so tasty. Naturally, his next actions could be:-
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Buy “ABC” biscuit again for the next Liverpool game; and
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Recommend an “ABC” biscuit to his friends.
Logical enough! However, it could well be a very different story if the said “ABC” biscuit has no brand (no ABC) at all! While Peter might still randomly choose the biscuit (solely for its red), it now becomes practically difficult for Peter to recommend the biscuit. At best, Peter can tell his friends about the package’s size, colour and other details. Worse still, there is simply no guarantee that Peter can find out the biscuit from the biscuit wall next time. Without a brand name, it is hard to check with the shopkeepers if the biscuit is out of stock.
Customers always look for products/ services with good qualities. After being repeatedly impressed by your brand, they will recognize and build a connection and trust with your brand. We, therefore, say trademarks primarily help the general customers reduce the costs of searching for good-quality products/ services, and a premium could be charged in compensation for such search cost reduction. Moreover, it is rather difficult for your competitors to take away such a connection/ trust, unless they are allowed to camouflage as if they were associated with you, WITHOUT legal consequences. This is why our trademark laws are so important in facilitating the above trust mechanism in the marketplace.
We hope that you now understand more about what a trademark meant to your business, and therefore be more convinced that getting yourself a trademark would always be a nice start to your business.
