If you were asked to list the most important assets of your business, what are the first things you would think of? Your staff? Your premises? Or perhaps your stock? One asset you should never overlook, or underestimate, is your goodwill.
Goodwill is what brings you repeat orders and new business. Existing customers know your name and refer you to others. When you say, 'It has taken years to build up my business,' you probably mean, 'It has taken years to build up my goodwill.'
Goodwill is generally embodied in a name, and it is vital for every business to protect their ability to use that name.
Consider the consequences of having to change your business name. This might happen because another company, perhaps in another part of the country or a slightly different market, lays claim to that name, has a registration, and is able to stop you using it. Or perhaps another company starts trading under a name so similar to yours that customers are confused and you lose orders. And if the new company trades at the lower quality end of the market your reputation could suffer as a result.
Protecting your name is crucial if you want to preserve your goodwill. The system allowing you to do this is Trademark Registration. Trademarks are not just logos or brand names like 'Virgin' and 'Coca Cola', but any 'sign' that indicates the source of goods or services, including a form of packaging or even a sound.
Trademark rights are not merely the preserve of major corporations. A local bakery operating under the name 'Jackson's,' for example, can register that name as a trademark and it will be just as valid as Burger King or McDonald's. In the UK, about 500 trademarks are registered each week.
Why register a trademark?
Although your business has a common law right to stop someone stealing your name and 'passing off' their business as yours, this can be very difficult to prove and the legal actions involved are costly. It is far better to take preventative measures and register your trademark from the outset.
Here are some of the benefits.
- The Trademarks Registry will issue a certificate confirming your rights to the mark. You will have the right to prevent others from using the same or similar mark on the same or similar goods or services. The Courts recognise these rights and in the case of a legal action all you have to prove is that the competitor's mark is similar to yours and that he is operating in the same area.
- Your trademark is entered on a Register that is routinely searched by companies looking for new names or products. If your mark is on the Register, the searching company will adopt a different name and potential conflicts will be avoided.
- A registered trademark is a useful asset with a monetary value. Registered trademarks are regularly bought and sold, occasionally for substantial amounts of money.