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Legal Strategies for Brand Building Competitive Business Leverage through Intellectual Property

 

ITIPress.org - Gerald S. Duty/ Attorney At Law

It is common for small businesses to underestimate the value of trademarks, copyrights and other intellectual property and their role in creating business opportunities and enhancing an enterprise’s valuation.  Most businesses, whether they are selling goods or services, have invested heavily in building a reputation.  Such a reputation can become a valuable business asset and just like any asset, should be protected and managed to maximize its value.

The main purpose of creating intellectual property is to create brand loyalty and differentiate products or services.  However, these properties, successfully used, can also create opportunities for franchising or licensing agreements, the creation of joint ventures, the sale of assets to other firms or even opportunities to obtain financing based on the value of the marks or other properties. Such opportunities begin with a marketing plan and a strategy to legally protect and maintain the marks.

Federal Registration of Trademark

In the United States, trademark rights arise from the use of the mark in commerce rather than its registration.  However, there are significant benefits that companies receive from registering their trade or service marks with the US Patent and Trademark Office (“USPTO”).  Obtaining such a mark grants the owner national priority over all but prior local users and guards the door to your expanding throughout the United States.  It also protects against competitors utilizing confusingly similar marks anywhere in the country.  Failing to register may confine your use of the mark to its present scope.

It is best to register a mark before it is used in commerce.  It is much less costly and time consuming than redesigning logos or changing names after discovering that somebody already has registered a similar mark.  Once you have successfully registered a mark, it is important to maintain the registration by continuously using the mark in commerce, policing the market for violators and reviewing the use from time to time to ensure that the mark has not evolved in such a way that it is no longer protected by the original registration.

Trade Secrets

Almost every business has proprietary confidential information that gives the business a competitive advantage in its markets, be it client lists, business methods or other trade secrets.  These secrets cannot generally be protected through patents or trademarks, but sufficient effort should be expended to ensure that such matters stay within the company through the use of confidentiality agreements, non-compete agreements or other contractual methods.

International Protection

If you wish to expand your company’s activities to foreign markets, international protection should be sought.  Since trademark registration in multiple countries is quite costly, one should determine the type of protection needed based on the company’s business plan.  If manufacturing activities will be undertaken in one country but the products will not be sold or marketed in that country, less protection is needed in that country than in one that will be the target of marketing efforts, for example. 

The Madrid Protocol

Many countries are signatories to various multinational intellectual property accords that allow for multi-country registrations.  One of the most important of these is the Madrid Protocol.  Companies established in nations that have ratified this treaty may apply for registration in any number of member countries though a fairly simple procedure.  The United States recently ratified the Madrid Protocol, effective November 2003, opening this option to American companies.  Other member countries include those of the European Union, Australia, China, Japan, some Eastern European and African countries among others.  The only member countries in the Americas at this time are the United States, Cuba and Antigua and Barbuda.  The absence of most Latin American countries is said to be due to the fact that the permissible languages for Protocol filings are English and French.  Spanish may be added in the future.

The basic procedure for Madrid Protocol applications is as follows.  The registrant begins by either filing a conventional trademark application in his home country or by relying on an existing registration there.  The registrant then files an international application with his home country, (for American companies at the USPTO), designating one or more member countries in which trademark protection is sought.  This application is forwarded to the World Intellectual Property Office which grants the international registration and forwards the application to the national offices of the appropriate countries.  These offices then process the application, treating it as a national trademark application and conducting the typical procedures required under national law.

When the day comes to sell out of a business, many business owners find that the most valuable part of their business is the intellectual property rights they have registered, maintained and exploited.  As traditional streams of commerce expand due to technological advances and the lessening of legal barriers to markets, the importance of intellectual property should only increase and business owners who take adequate steps to build a strong brand will be duly rewarded.

"Don't do business with your friends. Make friends with the people you do business with."- Unknown

 

 

 

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