Why Trademarks are Essential for Startups
Your First Step in Building Value and Protecting Your Brand
By Carole Long
October 1st, 2024
Starting a business comes with countless decisions, but one of the most crucial and often overlooked steps is trademark registration. Whether you're just setting up your shop, launching a new product, or expanding your services, trademarks are a simple yet powerful way to protect and build value in your brand. While you are not required to register a trademark in Canada, doing so can offer tremendous advantages that will pay off in the long run. In this blog, we'll break down why trademarking is essential for startups and share some real-life examples that demonstrate its importance.
A trademark is essentially your business's identity. It could be a name, logo, slogan, or even a distinctive sound or design that sets your product or service apart from others. But here's the key point: just because you came up with a brilliant business name or a catchy logo doesn't mean it's automatically yours to protect.
Without a registered trademark, your rights are limited to what's called "common law trademark rights" in Canada. While this provides some protection, it's pretty limited. You could still find yourself in situations where someone else uses a name that's confusingly similar to yours, or worse, they could trademark it before you do! A registered trademark, on the other hand, gives you stronger, nationwide protection to stop others from using or copying your brand.
Why Should Startups Register Their Trademarks?
Protect Your Brand from the Start
Your brand is one of your most valuable assets. Think about it: all the time, effort, and money you'll spend marketing your product or service could be wasted if someone else claims your name or logo. Trademark registration gives you peace of mind that the brand you're building won't be taken from under you.
For example, take BlackBerry vs. Typo. BlackBerry, a Canadian tech company, sued Typo, a startup that created a keyboard attachment strikingly similar to BlackBerry's signature design. BlackBerry had the design trademarked, which allowed them to protect their IP and force Typo to halt sales. Without that trademark, BlackBerry might have had no legal grounds to defend its iconic keyboard.
Protect Yourself from Infringement Claims
Registering your trademark not only protects your brand from others but also provides a level of assurance that you're not infringing on someone else's intellectual property. It would be a nightmare to invest in your business only to later discover that your brand is too similar to another registered trademark, forcing you to rebrand and lose everything you've worked for.
Build Credibility and Value
When you register your trademark, you're not just safeguarding your brand; you're also creating an identifiable and valuable asset. A trademark can become a key element in your business's overall value. Plus, potential partners, investors, or franchisees will take your business more seriously when they see you've taken steps to protect your intellectual property.
For small startups, the question is often: should I register my trademark now or wait? Registering a trademark in Canada requires time and money, so you want to make sure the investment makes sense. Here are a few signs that trademark registration is a good idea for your startup:
- You're investing heavily in marketing, signage, or packaging. The more you put into promoting your brand, the more important it is to ensure it's protected.
- You plan to expand beyond a single location. Once your business grows, protecting your name across multiple areas is crucial.
- It would harm your business if someone else started using a confusingly similar name or logo, regardless of whether they are a direct competitor.
- You plan to franchise or have partners use your name (for instance, if you are expanding your business into different locations or starting a charity with multiple chapters).
On the other hand, if you run a small personal business in one location, closely tied to your own name or identity, trademarking might not be as urgent. However, if you are looking to grow, the sooner you register, the better!
To highlight the risks of skipping trademark registration, let's look at the famous case of WWE vs. The World Wildlife Fund (WWF). Back when WWE was still called the World Wrestling Federation (WWF), they found themselves in a trademark battle with the World Wildlife Fund, which had already registered "WWF" as their trademark in many countries, including Canada. Despite being well-established in the wrestling world, WWE was forced to rebrand after losing the legal battle.
This is a prime example of how not registering your trademark early can lead to costly consequences, including rebranding, lost recognition, and potential damage to your reputation.
Many business owners hesitate to register their trademarks because of the perceived costs and complexities, but the benefits far outweigh the effort. In Canada, a trademark registration is valid for 15 years and can be renewed indefinitely for a modest fee. When you think about how long that protection lasts, the upfront investment is a small price to pay for the value and security it provides.
Plus, trademarks can even be licensed to others, which is particularly helpful if you plan to franchise or expand your business. Just make sure to maintain control over how your trademark is used—if you don't, you could risk losing your rights.
As a startup, protecting your intellectual property should be a priority, and registering a trademark is one of the easiest ways to safeguard and build value in your brand. Whether you're a tech startup looking to secure your unique design (like BlackBerry), or an entrepreneur who doesn't want to end up like WWE having to rebrand, the benefits of trademark registration are clear.
The bottom line: if you're investing in your brand and planning to grow, don't wait until someone else claims it. Trademarks give you the legal standing and confidence to grow your business knowing that your brand is truly yours.