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  • Writer's picturemec. Rafał Stach

Why is it worth protecting your trademark?

Updated: Aug 14, 2023

A trade mark is a symbol or combination of symbols used to distinguish the goods or services of one trader from those of other traders. A trade mark can be a word, image, shape, sound, smell, or a combination of these elements.


Why protect a trademark?

Today's market is extremely competitive and entrepreneurs face many challenges. In such a situation, having a unique trademark is crucial. It is what allows you to stand out from the competition and attract the attention of potential customers. By making the brand easily recognizable, it is easier to build a positive company image and gain the trust of customers.


Apart from the marketing aspects, protecting a trademark also offers a number of practical benefits. First and foremost, it allows you to protect your business against unfair competition. Registering a trademark prevents other companies from using similar symbols, which prevents customer confusion and protects the company's reputation. It is worth remembering that the market is full of dishonest players who do not hesitate to infringe others' rights. In such a situation, having a registered trademark is the only effective way to protect your business.


Another advantage of protecting a trademark is that it can be used as collateral. For an entrepreneur, this can be crucial when wishing to obtain financing or credit. Many banks will accept a trademark as collateral, allowing for more favourable financing terms.


It is also worth noting that having a registered trademark increases the value of a business. For investors, this is an important factor that influences the decision to invest in a particular company. The trademark, being protected by intellectual property rights, increases the value of the company, which may translate into higher prices for shares or better transaction terms.


Why is it risky not to have trade mark protection?

The risks associated with not having trademark protection can be very serious for a business. Competitors may start using a similar or identical trademark, leading to a loss of brand and a drop in sales. Copyright infringement may occur, resulting in litigation costs and loss of time and Investments in advertising and brand promotion may prove futile as competitors may use the name or trade mark symbol and attract customers.


The jurisprudence of Polish courts confirms that trademark protection is crucial to protect an entrepreneur's investment. In 2019, the Polish Supreme Court decided a case related to trademark infringement by one of the country's largest energy companies. The court awarded compensation of PLN 50 million to the company, which had registered its trademark several years earlier.


Can a trade mark serve as an object of security?

Trademarks can also be used as an object of security, enabling an entrepreneur to obtain additional sources of financing and raise capital to grow the business. They can be used as a pledge with which to secure a loan, and if the company goes bankrupt, the trademark is protected and can be sold to pay off debts.


Can you protect your mark with Metavers now?

Nowadays, a phenomenon that is gaining momentum in the business world is the metaverse, which is a virtual space in which companies can conduct their operations. In such a world, securing your trademark becomes even more important, as there is a risk of someone else using it in this virtual environment, which can lead to customer confusion and financial damage to the company. You can already protect your mark under the NICE classification classes that cover services and goods offered in virtual worlds, which could prove to be a good investment in the future of your business.


Can a protected trademark be tokenised?

It is also worth mentioning the growing popularity of tokenisation, a process of creating digital representations of assets, including trademarks. Trademark tokenisation gives entrepreneurs the opportunity to secure their mark on a new level, allowing ownership to be more easily exchanged and used for different projects. At the same time, however, such activities carry the risk of theft or unauthorised use of the mark, which in turn can lead to serious legal consequences.


This was exemplified in 2018, when the US company Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. and subsequently announced plans to tokenise its business. As a result, the company's shares soared 500%, demonstrating just how important tokenisation can be to a business.


Eurostat data shows that trademark registrations in Europe have increased by more than 10% per year over the past few years. In 2020, more than 190,000 trademarks were registered, a record high. It is also worth noting that more and more companies are starting to secure their trademarks not only at national level, but also at international level, due to the increasing globalisation of the market.


In conclusion, trademark protection is crucial for any business, regardless of its size or industry. It offers many opportunities and benefits, such as easier brand recognition for customers, protection against unfair competition and even the possibility to use the mark as a security object. At the same time, however, a lack of adequate protection can lead to serious consequences, including loss of brand value or financial losses.

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