Start-ups and Loss of Trademark Rights – How You Can Stay Safe

Startups should always make sure that they are extra vigilant when it comes to their trademarks as not being careful enough can result in grave consequences such as loss of trademark rights. This article will help you understand the subject citing real world examples.

Recently social media trendsetter Pinterest lost its right to use its trademark PINTEREST in Europe, which considerably hampered its global expansion strategies.

It lost the trademark opposition battle against the trademark PINTEREST coined by Premium Interest Ltd.

Failure to register the word PINTEREST at the USPTO until 2011 despite launching its business in 2010, lack of supporting documents provided for the application to mature to registration, documents furnished in furtherance of the claim for prior (non-registered) trademark rights in the UK proven unpersuasive, delay in filing crucial evidence towards the end, are some of the reasons Pinterest lost the trademark battle against Premium Interest Ltd.

The situation for Pinterest may turn out to be graver than it currently is, with Premium Interest Ltd. gearing up to register the trademark PINTEREST in Australia, New Zealand, Brasil, Turkey, Malaysia, South Korea, India and Japan.

Closer home, copyright and trademark infringement cases slapped on ‘Flipkart Discounts’ by giant e-commerce company Flipkart and by PayPal against Indian mobile payment app Paytm respectively, are some fresh cases of IP disputes in the current start-up industry.

Rampant trademark infringement instances can be seen in the way start-ups, either intentionally or ignorantly steal and simply tweak reputed trademark names – Bookmyoffer, Groffr, Naukrie.com, Secondshaadi.com, are some glaring examples.

With the start-up boom in India right now, it is likely that a hundred or so start-ups would now mushroom every year, with entrepreneurs trying to make a mark in the same or different field as registered trademark owners.

While there will certainly be some who try to take advantage of established businesses, there is a possibility of start-ups being dragged into trademark infringement disputes as well, if due regard is not given to select, register and protect their trademarks at the very outset. It can lead to cancellation of the trademark and the start-up being directed by the court to shut down its website, as happened in the case of the trademark dispute between pharmaceutical drug icki and domain name ickki.com.

Also Read: Loss of Trademark Rights

How can Start-ups select and protect their Trademarks and business?

1. Solid groundwork and wide-ranging research before the launch of product/idea – Sometimes entrepreneurs get over-enthusiastic about certain ideas and launch start-ups businesses without thinking through the outcome of such haste. These days, with apps and tech-businesses looming large in the start-up space, a lot of such businesses fail in the initial few months. This is owing to not understanding the market and consumer needs well, and offering same/similar products/services as that offered by a relatively successful and reputed player in the particular domain and losing out on the impact scale. It is necessary that your start-up offer something new and unique, in terms of products/services.

2. Pick a good name and a solid mark– The name of the company and the product/service offered has to be unique, compelling and one that does not infringe someone else’s rights. Remember company registration differs from trademark registration, and apply the concept of ‘strength of marks’ in coming up with your trademark.

3. Conducting a Trademark search – A thorough trademark search is required to detect and identify any conflicting marks in the relevant class of goods and/or services. In addition to searching the particular class, a search needs to be carried out in related classes of goods and services as well. Start-ups may feel this is something they can manage on their own, however, while they may themselves carry out independent searches on the internet, Trademark Registry website, through surveys, etc. it is prudent to hire a trademark attorney at this stage itself to execute the process in a hassle-free manner.

4. Secrecy and Licensing – Utmost secrecy during product/idea development is integral to preserving your priority claims over the said product/idea. This can be ensured by keeping the persons involved bound by solid NDAs and careful monitoring that no information pertaining to the business is leaked. Due diligence of technology, as well as obtainment of IP licenses prior to using third party technology or invention, can go a long way in averting litigations along the way.

5. Trademark Registration – Once the trademark search has been carried out and the coast is clear, so to speak (with no conflicting marks found as regards the proposed mark), the start-up entrepreneur needs to file for trademark registration at the earliest. This should be the topmost priority in the to-do list of start-ups as this will give them a necessary head-start in their chosen domain. If you wish to apply for registration overseas, you can do that using Madrid Protocol.

6. Choosing the adequate protection for the product/service – Not all products/services fall in the domain of trademarks alone. Sometimes confusion can arise due to the product/idea being eligible to all three forms of protection under the Indian IP regime. Take the case of designs for example. There is a perpetual confusion as to safeguard to protect it under copyright or design protection (as provided in the Trade Marks Act, 1999). It is important to have expert legal assistance and guidance at this stage, so as to choose the best form of protection that can fetch maximum benefits.

7. Promote your trademark – This one is fairly straightforward; once you have gained acceptance from the Trademark Registry as regards your trademark (after or without going through opposition proceedings), launch advertising and marketing campaigns to spread the word far and wide. The distinctiveness of your mark needs to be etched in the consumer’s mind to make it a success.

8. Use your trademark – You may think you are done sealing your deals on the trademark front, but unless you actually use it after it has been cleared by the Registry, you are bound to lose it somewhere down the line. If you let that go for five continuous years, there is every chance you will lose the game like so many others did.