How trademarks can work as assets for MSMEs

The Government of India supportive policies and various reliefs for MSMEs makes trademarks as the most important IP asset for MSMEs as they now stand a chance to make their mark even more extensively and literally. MSMEs, do understand trademarks, but their understanding on ‘brand’ and the importance of protecting it with trademarks and converting it into an easily transferrable asset is lacking.

How Brands and Trademarks can be useful for MSME’S ?

The intricate part of a brand comprises several elements namely image, character, identity, personality, essence, culture and reputation. By adopting a brand, a MSME products can be easily identified and consequently, provide their business with an unchallenged competitive advantage in the market

Trademark is basically registering a brand name, to stop someone else from using the same or similar brand as the one that has been registered. Trademark serves as defence mechanism to protect an MSME’s brand from loss of reputation, retaining a good trustworthy relationship with your existing and potential customers.

A trademarked brand has the potential to increase in value as an intangible asset to use as collateral to obtain financing from legitimate financial institutions.

The MSMEs must remember that trademark protects their customers/clients from using duplicate products/services, and in such a paradigm, it becomes all the more important that customer oriented MSMEs, either in B2B or in B2C situations, empower their customers to identify their duplicates.

Trademarks are trade-able assets, that is, like other assets of an MSME, the trademark can be sold, licenced or purchased as per needs to/from another MSME or MNC. It is also quite possible for an MSME to sell their entire business [customers and tangibles] while retaining control of their brand names/logos [that is, trademarks], and then license that trademarks to several manufacturers

A pragmatic approach to trademarks for MSMEs

The MSMEs in India, rely on common law tort of passing off to protect their brand name (in a court), products’ name, logos and any other visible sign that allows their customers/clients to identify them in a marketplace. Though this approach, is very cost saving, Yet, what they don’t understand is that every cost saving measure of today, especially in IPRs, may snowball into a potentially infringement in future. In absence of a registered trademark, the aggrieved party cannot launch an infringement suit but can only launch a lawsuit under common law tort of passing off, and proving the prior usage/goodwill/brand of the name(s) to a court of law, and then obtaining an injunction against the infringer.

 

Such a tedious enforcement process could be cut short simply by producing a trademark registration certification to the infringer, who is very likely to not contest a bona fide trademark registration certificate, in a court of law. Further, a registered trademark allows the trademark owner to institute infringement proceedings. Besides that, trademark registration in India is inexpensive for MSMEs, with the government scrapping off half the price of their trademark application fee for registered MSMEs.

How to register trademarks?

Register brand names/trademarks/logos/trade-dress etc. once you are ready to market the product, and before its launch, as the name is less likely to change after this stage.

All trademarks registrations are territorial, that is, a trademark registered in India is enforceable in India alone. If an MSME is inclined to sell their products abroad, they also need to register their trademarks in each of the potential countries. These international filings can be affected either directly or via Madrid Protocol that significantly reduces duration and costs of filing and obtaining trademark registrations in several countries.


Posts