Three important steps towards a better brand strategy

15.06.2020

Siim Kinnas, intellectual property specialist at Enterprise Estonia

Whether your brand, logo or slogan is famous because it's been shown on TV and even children can recite it in their sleep, or you're still on a journey to wider recognition, it's a good idea to think about protecting your intellectual property by registering it as a trademark.

Trademark applications are most commonly used by Estonian businesses to protect intellectual property, and experts at Enterprise Estonia consult clients on the topic fairly often. In my trainings and consultations, a number of questions are frequently asked that should be addressed before registering a trademark. I will highlight some important aspects that pave the way to having a successful brand strategy and that help prevent and properly deal with any issues regarding your brand.

Registered trademarks are protected ONLY in the countries where they're registered

This is the main thing to keep in mind: a registered trademark protects your products only in the countries where the trademark is registered. An exception is the European Union trademark, which is protected in all member states of the European Union. In most countries, trademark protection lasts for at least 10 years, after which time it can be extended almost indefinitely. Registering a trademark is not successfully crossing the finish line, but the beginning of a marathon.

Since a trademark registered in Estonia is not protected in any other country, not in Finland, China or Germany, I recommend thinking beforehand about where you mainly want to sell your products or services in five or ten years.

You should also consider registering the trademark in the country of production. Last year, Enterprise Estonia consulted a client who used a subcontractor in a third country to manufacture the product and its packaging. The order was filled and the client was happy, until they coincidentally visited the country and saw a product identical to theirs with labels in the local language on the shelves of local stores. The subcontractor had noticed that the brand of the attractive product hadn't been registered as a trademark and continued production for the local market after filling the order, making a quick buck at the expense of the Estonian business. If they had protected their intellectual property by registering a trademark, the client could've profited significantly more because of the local market.

Think about China, because China is thinking about you

It's also important to pay close attention to China's large markets. Although it's often thought that they always get away clean with copying brands in China, it's not 100% true. In the early 21st century, China set a strategic goal to transform from mainly working as a subcontractor to the original manufacturer, and they've since worked hard on building a system to protect intellectual property. Copying intellectual property registered as a trademark in China can have serious consequences if the owner of the trademark follows local regulations to protect themselves. However, copying a brand with no trademark protection is generally not illegal in China or any other country. 

In China and most other WTO countries, the 'first come, first served' principle is followed in trademark registration, no matter who actually uses the brand first. Even if you try to enter China's market with your niche Estonian-based product, you shouldn't be too surprised if you receive a firm letter stating that a product with the same name and logo is being sold there and demanding you to change your brand. It's also possible that they'll offer you the chance to buy the rights to your own brand; however, it definitely wouldn't be cheap. Even though malicious trademark registration was banned in China last year, and it's even punishable, it's rather difficult to prove malicious intent.

So you should register your brand, product design, utility models and design attributes before the Chinese enterprises happen upon your brand and start copying it. Even though many businesses might ignore China's markets right now because others are more profitable, the situation may have changed in five years and then it's too late to act.

It's every man for himself

It's often mistakenly believed that registering a trademark automatically protects the brand, product or design from copying. In reality, no one but the owner of the brand will seek out possible trademark violations in stores or on the market. If the alleged infringer doesn't stop using your brand after receiving your demands, and your brand is registered and protected as a trademark, you as the owner of the brand have the right to take the violation to court and use your registration application as evidence. After listening to both parties, the court will decide if a violation has been committed, if you'll receive compensation and how much the compensation will be.

Draw up an action plan for developing your brand strategy and registering trademarks in order to detect possible violations and be prepared for these kinds of situation. You can demand that the infringer stop copying your brand, but if no concrete actions follow, they will continue without fearing the consequences of their actions.

A story of how a Finnish competitor copied the exact design of a small house, which is registered as a trademark by an Estonian business, recently made headlines. Although the owners of the design wrote to the Finnish company on the topic, they never received an answer. So the Estonian company decided not to pursue the matter to court and let them continue.

A trademark is, first and foremost, a business tool. If the money spent on your trademark doesn't help you gain profit or avoid competition on the target market, it's not a good investment. Business owners who want to stand for their rights in a thought-out manner are welcome at Enterprise Estonia. Pre-consultation on intellectual property is free and it definitely helps businesses make better decisions regarding their brand and protecting intellectual property.

If you're interested, you can read more about the intellectual property consultation here or contact me via e-mail. 

The project is co-funded by the European Regional Development Fund.

Siim Kinnas
siim.kinnas@eas.ee 

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