An intellectual property (IP) that safeguards the reputation of your company is a trademark. You are granted the only right to use a trademark in your industry when you register it. There could be several repercussions if you don’t secure the intellectual property associated with your brand or with another company. You could, for instance, run the risk of financial or reputational harm. This article will guide you through some conceivably hazardous situations that could result from “weak trademark” use or from neglecting brand protection for businesses.
Strong Vs Weak Trademark
A distinctive trademark is one that is strong and unusual. As a result of the trademark’s little likelihood of causing consumer confusion. when you apply for a trademark, The more distinctive your trademark is, the less likely it is that your application for trademark registration will be denied. Because its very nature reveals how it differs from all others, a strong trademark also has a minimal possibility of being legitimately stolen or utilised by a third party.
A weak trademark, according to IP Australia, is one that is “descriptive” and has already been used by others to describe their products or services. A poor trademark’s generic nature makes it “difficult and expensive to try to control and protect.”
What Harms Might Be Irreparable?
Lost sales are a traditional type of damage that can be compensated financially. As a result, they are useless in obtaining a preliminary injunction unless the amount of such lost sales is substantially unknown, which is less likely to be the case if the defendant’s misleading items compete with and so replace the plaintiff’s purchases. When the plaintiff’s products are in direct competition with those of the defendant, lost sales are also more likely to occur since customers can easily swap one for the other, supporting the plaintiff’s claim of injury. However, over the course of the twentieth century, trademark law was expanded to protect non-competing items, which typically don’t directly result in lost sales.
The lack of a materiality criterion in trademark law also had an impact on how courts conceptualized—or rather, did not conceptualize—harm. Consumer injury from confusion isn’t necessary since courts often don’t require plaintiffs to demonstrate that customers care about the uncertainty at issue, notably who sponsored or endorsed a product or service rather than who created it or delivered it. However, there might not be any loss to the trademark owner if consumers are not harmed. According to recent study, materiality varies among various products.
While customers frequently increase their willingness to pay for sports collectables or indicate that sponsorship is important to them, they are far less interested in other products, such as those that accidentally include a trademark owner’s name. This finding suggests that, in many instances, the only real injury to the trademark owner resulting from confusion is a loss of licencing income, which should be compensable through monetary damages in the same way as copyright and patent losses are.
Naturally, each situation is different, but the following are some ways you could experience the financial burden of a trademark infringement:
- Customers prefer to purchase things straight from competitors than from you. Your brand loyalty may be damaged as a result, which could lose you repeat business. Low-quality products that pass for yours damage your reputation.
- Customers may shun your business in the future as a result, thinking you produced low-quality goods and overcharged for them.
- Customers are unsure of what your business does or how to get in touch with you. That can result in a decline in sales and harm to your reputation due to unfavourable comments.
It can harm the reputation of your brand
You run the danger of harming your brand’s reputation if you do not appropriately defend it. If you don’t safeguard your brand, other companies might copy your branding strategy. This can cause rival companies to offer inferior products or services under your name. Over time, the result could harm your reputation.
You Might Be Taken For A Ride
Your company runs the danger of having its brand exploited by another company if your brand is not adequately protected. Without protection, your rivals may use your reputation and hard work to their own advantage by utilising your branding. There are legal repercussions for engaging in this behaviour because the law views it as “passing off.” You run the danger of being unable to pursue your rights without sufficient brand protection, though.
It Lowers the Value of Your Brand
The most valuable asset in your company is its intellectual property. You run the danger of losing the value of your brand if you don’t safeguard it. A smart strategy to gradually raise your brand’s worth is to trade mark it. Unfortunately, if you don’t safeguard your brand, it can end up costing you money.
You Might Receive a Notice of Infringement
If you unlawfully utilise someone else’s trademark, they may take legal action to protect their rights. Your receiving a “cease and desist” letter in the form of an infringement notice is the first stage in this procedure. Only in cases where there is a solid legal foundation for charging someone with trademark infringement can you issue a cease and desist letter. Receiving this letter obligates you to stop using or offering for sale the goods or services you infringed upon, even if you were unaware that you were doing so. Your financial situation may suffer as a result of this.
You could have to attend court
Someone else may seek a court order to try to stop you if you receive a cease and desist letter but still infringe on their trademark. Additionally, they will be able to request compensation based on either their loss or your profit as a result of the trade mark infringement. Going to court is expensive and might damage the reputation of your company.
Products May Be Seized From You
You run the danger of having your items seized if you import things that violate someone else’s trademark while doing so. The Australian Border Force may be asked by a trade mark owner to stop the entry of counterfeit goods. Following that, they have 10 days to file a lawsuit against you. A substantial financial loss to your company may result from having its goods seized. In order to avoid trademark infringement, it is crucial to confirm that the goods you are importing do not violate anyone’s rights.
If you ask trademarking lawyers, they say “A brand could either be strong or weak. Seeing the symbolism and text of the trademark may prompt the identification of a brand if it has a strong positive meaning”.
As a result, the trademark, which denotes the brand, is frequently mistaken with the brand, which is the reputation of a product and its producer. In reality, the manufacturer wants consumers to become confused in this way.
Take Coca-Cola as an example (please). The popular cola drink’s composition was altered by Coke a number of years ago. And a lot of consumers found it really repulsive. As a result, the trademark was unimportant and the brand deteriorated. In response, Coke reintroduced “Classic Coke” to the market. Even today, authentic cane sugar-based Coca-Cola made in Mexico is still offered as an alternative to the corn syrup-based trash you usually get in local U.S. stores. It was irrelevant what was trademarked. But the flavour most definitely did.
The most unusual (and unsuccessful) use of trademarks on the Internet has resulted from the hoopla surrounding them. I frequently come across what I assume to be trademarked terms and symbols that tell me absolutely nothing about the company vying for my patronage.
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