As a startup, you and your team may spend a lot of time, energy and other resources developing your corporate name, symbols and logo. Naturally, you may want to safeguard these key elements of your brand. Trademark protection exists for this purpose.
A trademark is a form of intellectual property that protects the use of various names, symbols, logos or other manners of identifying a company’s products and services.
Start-ups can obtain trademark protection in two ways—under the common law (i.e. through use) and under statute (i.e., through government registrations). You can create common law trademark rights without incurring any legal costs simply by using a distinctive name, symbol or logo to identify your products and services. If you want to obtain a statutory trademark, then you will need to file an application with a national trademark office (in Canada—the Canadian Intellectual Property Office). While trademarks are not as expensive to obtain as patents, you will still have to pay filing and maintenance costs. Like patents, trademark registrations tend to be granted on a country-by-country basis, which increases costs. (Some notable exceptions exist. For example, in Europe, you can obtain a European trademark that provides coverage over multiple countries.)
Generally, startups should obtain trademark registrations for only those items (known as “marks”) that are likely to have a reasonably long shelf life. For example, it doesn’t make sense to obtain a registration for a marketing tagline that you might use for only six to twelve months because the registration process will outlast the tagline. Or if your company tends to change individual product names frequently or if you have a large number of product names, then it may not make economic sense to secure trademark registrations for each of these. On the other hand, if you have product family names that you plan to use for a long time, it stands to reason to trademark those names.
Because of the costs involved, a startup will probably only obtain statutory trademark protection for a limited number of key marks in a few jurisdictions. For Canadian startups, this usually means Canada and the U.S. Since trademark rights (even statutory rights) can only be maintained through use, it makes little sense to register in countries where you don’t yet use the mark. Therefore, wait with seeking trademark protection overseas until you are ready to become active in those markets.
Do investors care about trademarks? Yes and no. On the one hand, trademarks are certainly less a prerequisite for external investment than other forms of registered intellectual property, especially patents. Nevertheless, founders should address a startup’s trademark strategy as an element of its overall intellectual property development and marketing efforts. If the founders’ strategy is tightly integrated with the venture’s actual business objectives and risks, they can earn significant credibility points with potential investors.
This article was produced by James Smith and Shane MacLean and is made available through the generosity of Labarge Weinstein Professional Corporation.