When you’re setting up your business, there’s probably a mountain of paperwork you’ll have to fight through before you get started.
It’s understandable why many business owners overlook trademarks for fear of even more work, but it’s a critical step.
This is because registering their business name can help smaller businesses protect their reputation and future revenue.
Trustmark: Lord Sugar used Trademark Wizards for all of his trademark applications and is now a director of the company
We speak to Oliver Oguz, managing director of Trademark Wizards, a company used by Lord Sugar that he subsequently invested in.
He tells us about the importance of registering a trademark before starting a business, and whether it is really necessary to purchase one for a website.
Do you need to file a trademark before launching your business?
Trademarking may seem like a daunting prospect, but it’s actually relatively easy – it costs £200 and should take around four months.
It’s an extra step that can prove invaluable to business owners as it helps them protect themselves from counterfeiting and potential future legal battles.
Without registering a trademark for your brand, there’s little you can do to protect what you’re selling.
“People put a lot of time and effort into building brands, especially family businesses, and then people just copy their names. People always take a shortcut and find a name with a good reputation,” says Oguz.
“They find the information online, they see if they have a trademark, and if they don’t, they’re happy to file that trademark and start using the mark.”
People invest a lot of time and effort into building brands, especially family businesses, and eventually people just copy their names
Oguz adds, “Sometimes it’s blatant intrusion, people without any shame, just carbon copy articles. Other times they may use a mark that is similar in relation to identical goods.
“This can lead to some confusion, because people think the two companies are connected.”
Every lost sale because someone bought goods from another company and thinks they belong to you is one too many.
Fortunately, more and more small businesses are realizing the threat of counterfeiting and are registering their trademark.
‘I’ve asked people why they register trademarks and sometimes they say it’s because they’ve burned their fingers in the past. They will never let that happen to them again,” says Oguz.
Lord Sugar and Oliver Oguz, general manager of Trademark Wizards
If you have already started without a trademark and at some point you are forced to file one to protect the mark, someone else may have filed a trademark in your name.
In this scenario, the small business will have to fight to get the trademark back, or try to cancel the filed trademark to protect their own name.
To cancel the trademark, you have to rely on something called unregistered rights.
‘You have to prove that you have a reputation, so there is a burden of proof there. You have to prove that you have good will, you have to prove that the person you are complaining about is misrepresenting themselves,” explains Oguz.
‘Then you have to prove that there is a chance of damage. That procedure costs a lot of money, while you could just have had a trademark registration and waved for it.’
You can, of course, start trading before the application is processed. This is because of the so-called priority period, which means that when you file your application, you will be protected worldwide for six months, as long as you file your foreign trademarks within that period.
The trademarks are updated retroactively, minimizing the chances of someone hijacking the brand.
Check the name BEFORE starting your business
While there are plenty of contenders out there wanting to piggyback on established companies that don’t have trademarks, some companies make simple mistakes before launching.
“I think people confuse trademarks with company formations,” says Oguz. “They think once they set up the company and they have a limited liability company, they own the brand.
“Sometimes people even think that just because they own the domain name, they own the name.”
Be Protected: Owning a domain name does not mean you own the rights to your business name, so it is important that those with online businesses register a trademark
If it turns out that there is an existing trademark for something related to your brand, you could face dire consequences. That’s why it’s so important to do proper due diligence before launching.
If you infringe someone’s trademark, the other party is entitled to various remedies, including forcing you to stop using the trademark altogether.
They can also get mandatory transfer of domain names and social media handles and can claim up to £500,000 in damages.
‘I think that people who start a company often don’t check whether other previous trademarks have been registered.
“Maybe they search Google, or they go to Companies House, don’t see the company name and think that’s okay. Then they launch the brand and get a strike letter from someone with the brand.’
Do you need to register a trademark for a webshop?
If you run a small business online as a sideline, trademarking may not have even crossed your mind.
But like any business, your reputation is at stake and you should consider whether you could lose sales to someone with a similar brand.
“If you knit someone a sweater with a pattern, you might not [file a trademark]. But you have a store, an address, a username and that’s your brand.
When people write reviews about your store and service, it needs to be protected,” says Oguz.
When you file a trademark application, there are different classes of goods.
“If you had a store, you would protect your brand for retail services related to knitted scarves. At the same time, you would probably also protect your brand for the scarves themselves.
“What could happen if you had an Etsy shop with a good reputation for making scarves is someone would start a brand of scarves and put your name on it.
“People will think the brands are related because the goods and services are closely related.”
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to compromise our editorial independence.