Thanks to the startup culture, we see more and more companies being registered day by day. The past few years have seen a significant increase in the number of small business registration, and this is mainly due to the technological revolution that has taken place in the past decade.
Starting a business has become easier than it was a decade or two ago. Although there are a lot of newly founded companies, there seems to be no increase in the number of trademark registrations.
In fact, new business owners still ponder upon the decision of whether to trademark their company name or not. They believe that since they have a company with the same name, they don’t need to do so. Let’s see the difference between company registration and trademark registration, as well as their importance.
The Basics of Company Registration
Suppose you have formed a company “ABC”, and you have registered it with the local authorities in your country. That seems to be enough, right? Now, you may simply get on with your business affairs, thinking that you have completed all the necessary steps.
The question is, how does this protect your company and, most importantly, the product or service you are working on? Registering your company locally means that the rights of company ABC only belong to you in your respective industry and the country.
You may be able to stop another person from registering a company with the same name in your domain, which is beneficial for you. You may also be able to prevent them from registering a trademark on the name “ABC”, as you have registered it before them.
But the protection of a company registration will only get you so far. A business name registration will only guarantee you to use “ABC” as the name of your company, but it won’t protect your intellectual property, or services and products when you start selling them in the open market.
If another person or entity registers a trademark on the name “ABC”, they can legally stop you from associating this name with your products and services.
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The Basics of Trademark Registration
For instance, let’s say you have a restaurant registered with the name “David’s Pizzeria” in New York. Legally, there can’t be another David’s Pizzeria in the same city as yours.
Let’s say there is another restaurant by the name of “Big David’s Pizzeria” and they find out that your hottest selling pizza is called “Chef David’s Special”. They go ahead and register a trademark on the dish name, and they now own the rights to this name.
What will happen now? The owner of Big David’s Pizzeria will be able to send a legal notice to you stating that you need to change the name of your dish, otherwise you are liable for prosecution by using their name and committing trademark infringement. This is the power of trademark registration.
This is a general example. Let’s consider trademark registration in another perspective to understand it more clearly. Let’s consider a scenario where you want to market and sell your products and services to a country other than where you have registered your company.
In this situation, you will have no legal protection, and it will be much more difficult for you to conduct business, especially since your company isn’t registered in the other countries. If you think you will register your trade name in every country you wish to do business with, then you are exposing yourself to thousands of dollars in expenses, as well as legal regulations that are difficult to understand and fulfill.
While selling and marketing your products in another country, you have to be extremely careful about not infringing on another person or company’s trademark with your products. Moreover, you won’t be able to protect your intellectual property if someone decides to infringe upon it, since you haven’t secured your trademark registration. They can also use your company name in the same way.
So, it is always a wise decision to get your company name and products protected through trademark registration. Not only will it grant you the complete and sole rights and authority to market your brand, but you can register it within multiple countries much more easily.
It will also become much easier for you to stop other companies from stealing your trade name, and they won’t be able to deliver similar products and services in the same market, as they will be committing trademark infringement.
Lastly, you will also be able to save a lot of money by opting for trademark registration, as it will not only protect your company name and products, but it will also save you from getting embroiled in legal battles over trademark infringement, which can easily set you back thousands of dollars.
Company registration involves you registering a certain name with the local authorities, and this helps you secure your company name in your industry and the country in general.
You may not own the rights to your company name worldwide, and other companies may be able to use it globally. Moreover, company registration only protects your company name, and not your products or services.
On the other hand, trademark registration refers to securing a trademark for your company name or your products, which make them your intellectual property. You can secure a trademark to prevent other companies or people from using your intellectual property in their business, sales or marketing.
Moreover, they can’t use the name for their products or services as well. A trademark registration can be done in multiple countries, and it is also more cost-effective. A trademark can be registered for a name, product, design, or even a concept, so that other people don’t come up with something similar in the open market.
Company vs Trademark Registration – Which One Should You Choose?
So, which one should you go for? Basically, company registration is a mandatory step that you have to take if you want to do business, whether in your own country or worldwide. Trademark registration is still an optional step, and most businesses don’t need it, especially if their products and services are largely generic.