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Why just relying on common law trademarks right is not a good idea for start-ups?

If you have a business name, product name, tagline, or logo that you use regularly, you may have common law trademark rights—even if you have never registered your trademarks with any governmental agency. An unregistered or common law trademark is an enforceable mark created by a business or individual to signify or distinguish a product or service. Which means an unregistered trademark upto some extent can protect your brand within the scope of your geographical market or practice area.

Most people (including me until few days ago) believe that just a prior adoption and usage of a trade name for their product or services is sufficient to protect their brand in their respective practice areas.

This is true in those cases where you have done all your homework while opening your business with utmost secrecy and no other similar mark exists during adoption and starting the business.

It can be deceiving when someone specifically and intentionally wants to copy your brand name and have it registered before you went for trademark registration. A common law or unregistered trademark is legally weaker in such cases when compared with a registered trademark granted by statute.

Although, since in most countries the trademark rights stay with the person or company that started the business first as per common law right; a person or company that has been granted the registered trademark for similar trade name can be annoying specially in cases where they have filed a trademark infringement lawsuit against you.

Even if you were the first adopter and user of your brand name, the person or company owning the registered trademark has an upper edge to exercise their rights until you invalidate their trademark on the basis of your prior adoption and usage. The only catch in such cases is that when a lawsuit is in place, the judge may grant interim injunction against you till the pendency of the suit. Which means you cannot produce, sell, market or conduct any activity that involves exploitation of the trademark. In India, an average trademark lawsuit can go for more than 1.5 years. So, even if you win the lawsuit after 2 years or so, your market won’t be the same or you will find yourself out of the market.

So, what should be done to avoid such hassles so as to keep your focus on building your business.

  • Always conduct a thorough global trademark search along with common law searches to look for similar brand names.

  • Always apply for a trademark while opening your business. In India, it costs only Rs. 4,500 for trademark applications by Individual/ Startups and Small Enterprises.

  • Once you have applied for the trademark, make sure to start using it as soon as possible. In India, a registered trademark gets cancelled for no usage till after 5 years of approval.

  • Keep yourself updated for any new entity having a similar brand to yours.

  • When someone copies your trademark, make sure to send a notice to the party notifying them of your exclusive right. Not doing so will be used against you in case of a dispute or lawsuit.

  • Also, if someone has been granted a trademark similar to yours, ensure to file a rectification against that trademark. Not doing so will be used against you in case of a dispute or lawsuit.

Always remember, the market is full of opportunities as well as threats. Stay focused and be protected from IP trolls. Don’t let the loop holes in IP law system be a reason for your failures. Brand names are not built in a day !!

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