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The importance of trademarks in branding

November 06, 2021
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Image source: https://blog.ipleaders.in/voluntarily-cancel-trademark-registration-india/

This article has been written by Suvigya Buch pursuing the Diploma in Intellectual Property, Media and Entertainment Laws from LawSikho. This article has been edited by Zigishu Singh (Associate, Lawsikho) and Smriti Katiyar (Associate, Lawsikho). 

Introduction

Andy Warhol once said that, “A Coke is a Coke, and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it and you know it.” The Brand that we so lovingly know as Coke today would not be as big a business if it was not for the importance of trademarks in its branding.

Trademark is a  symbol that can be used as a legal means to protect the intellectual property associated with an identifier of a business. Examples of this could be signs, labels, logos or designs to represent a service or product which is made by an individual or a company. They help consumers to differentiate the services or products of one enterprise from the other in order to avoid confusion. In the long term, they also help create goodwill of a company and attach value to the name of the brand or company. A trademark is a medium to communicate almost everything about a particular brand to the consumers and helps in raising awareness of the brand. Trademarks and brands have now become one of the most valuable business assets and exceeds the value of a physical business asset. The existence of a trademark allows an enterprise to be different from its competitors and places awareness and dependability on such a brand. Registering a trademark comes with numerous privileges, the most important one of them being that no one would be in a position to exploit their brand name or logo and if they do so, they would have to compensate the owner of the brand and trademark in monetary terms. The scope of Intellectual Property today has been booming as more and more people and corporations have started to realize its importance. The need for a significant need on branding and commercial appeal has led to shift in focus from the obsolete ways of conducting business to laying more emphasis on the intellectual property of a business which is more concrete and a measurable element of brands and its products. This article talks about the relation of trademarks when it comes to branding of a particular product.

Branding and trademarks

The term ‘brand’ was first used by shepherds in order to place burn marks on their livestock in order to distinguish them from other shepherd’s livestock. Following this, after the Industrial Revolution, manufacturers realized that all the goods that were being sold all around the globe needed to be distinguished from one another and have their product appear unique. This led to the manufacturers labelling their goods and services into a brand which could be protected under trademarks. Thus, the invention of brands took lead and soon became an important part of the corporate landscape. The trend of globalization has given impetus to the importance and significance of brands in the world we live in. However, the process of creating brand recognition is an expensive process and can be taken up by mid-sized and large sized companies only. The concept of trademark provides the owner of a business or an enterprise with the exclusive right in order to prevent it from being used by others in a similar way or by exploiting the reputation of the original brand.

In this article, we will study the relationship of trademarks and brands together as a commercial process and how they complement each other. Quite often, an enterprises’ trademark is mistaken to be seen with its brand or trade name. A trade name is the term under which an enterprise pursues its business and must be differentiated from the enterprises’ legal or registered name. When we bring in marketing of brands, a trademark has two main goals, one of which is to represent the enterprise and create as much awareness as they can in order for the public to recognize the brand and its business operations. This can be implemented by creating a brand name which reflects the goods or services that the enterprise is dealing with and visually by creating a logo. A stunning example of this could be the logo and branding of the ‘M’ from McDonalds. The second goal is for the brand to offer the promise to meet the needs and requirements of a client for the quality of the goods and services to be conveyed to the consumers. For an individual to know how reliable a brand is, the marketer has to ensure that the brand creates some trust and awareness among the general public. This can be done by personal contact with the clients to understand and support their enterprise by way of  brand communication or branding.

In legal terms, a trademark is meant to protect intellectual property which is associated with the identity of an enterprise. As discussed above, a trademark is used to distinguish one brand from another and can take the form of a slogan, word, logo, symbol and several other elements. Recently, smell or a sound has also been included to be protected under trademarks. This kind of legal protection is imperative for any enterprise to protect its rights, core values, brand strategy, its identity etc. The only condition revolving around intellectual property protection is that the enterprise must be unique and that no market competitor can duplicate it. The ability to differentiate one good from another is the original function of the trademark. Other roles include quality function, which means to ensure positive attributes and values of the brand and the communication function, which refers to advertising and communication to the public at large. Brand function relates to the image, identity, culture and presence of a brand which cannot be achieved with the absence of trademarks.

The introduction and protection of an Intellectual Property into a business needs a hefty investment which needs to be made by the business or enterprise. ‘Brand Equity’ refers to the economic value of a protected and an established brand. Numerous surveys have proven that consumers choose a commodity or service to purchase from a well-known and an established brand that from a brand that is not very well known among the group of consumers. With the help of brand recognition, consumers can make decisions about their purchasing choices with great ease and reduce the chances of complexity of the decision to buy a particular commodity. A well-known brand has the chance of increasing its campaigns and ensuring safe margins which will potentially extend the brand to many more avenues of its services. The term and phenomena of brand equity is a part of an enterprises’ assets which are intangible in nature and show a rising number in the share of an enterprises’ value which can be converted into monetary terms.

In the 21st century, the corporate world has made a large shift from almost no protection of a business to using trademarks which could consist of logos or symbols which help identify a product which helps strengthen a business or an enterprise. Today, we see owners of various companies investing in Intellectual Property in a bid to protect their brand and identity in a globalized world. This can be implemented by using their brands’ communication and strategies to increase their purchasing power.

Conclusion

Thus, it can be concluded that trademarks are a healthy tool of marketing to promote brands that are involved in the buying and selling of various goods and services. These tools have been used to accelerate economic advancement of various countries. Trademarks help in generating more income, value and surplus in the economy. Therefore, trademarks and brands are very closely knit and cannot be separated. A positive brand image with the help of a trademark can result in good business for the company whilst also providing legal protection for the brand in question. The rights of each owner of a business can be secured with the help of trademarks and can also be fought for in case of infringement or exploitation of the brand. People today associate every popular brand by its symbol or logo and thus place their reliance on a particular company before making any sort of purchase. This does not help the business of the company which is providing for the goods and services but also helps the consumer make a sound decision of what they want to purchase and more importantly from which brand. It also plays an important role in increasing awareness among the public about a particular brand and places reliability and credibility on it. The right to own a brand and trademark is available to every owner of a business or an enterprise.


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