Because goodwill is your name and all things that your name encompasses, you must adequately protect yourself against infringement. Consider this: A businessman in his local area (Area A) finds a home renovation company. He develops and begins selling a tool of his own design, which he calls ‘Benson’. The product is a hit in the immediate area and its popularity increases along with the trade name.
A businessman from the next town (Area B) visits his area hardware store and buys the ‘Benson’, deciding that he could make a profit on another man’s idea. He opens his own renovation business in the next town over and sells his own version of the ‘Benson’.
And yet, since he did not receive permission to reproduce the ‘Benson’, he was unaware of the original method of manufacture, and his own ‘Benson’ is a failure. His store closes and several of his customers are suing him because they were injured from using his product.
Certainly, the entrepreneur was doomed to fail, since he stole the idea for the invention in the first place. In fact, this is common in small businesses around the world. However, his own failed business sends ripples of repercussions toward the businessman in his area. These repercussions include:
- Consumers from Area B who travel to Area A will not buy a ‘Benson’ due to its poor reputation.
- Consumers in Area B do not realize that the two companies are, in fact, not affiliated and therefore refuse to purchase a ‘Benson’.
- The businessman from Area A cannot expand his business to Area B because his product already has an undeserved bad reputation there.
- The Health and Safety department of Area B decides to visit the business in Area A to make sure that the product does not have the same faults as the defective product.
- The media picks up the stories of harmed consumers and televises them: potential consumers condemn Area A’s product.
- The business in Area A is at risk of going out of business for lack of business due to an undeserved bad reputation.
Any of these situations could be due to the fact that the businessman from Area A did not protect his goodwill. The entrepreneur could have registered his trade name and product name to gain the power to protect himself from infringement by the dishonest entrepreneur. If the entrepreneur tried to open his own store and sell the same product without explicit permission, the Area A entrepreneur would have the right to take legal action to protect his good name. Therefore, his good will would be protected.
The government is not responsible for the preservation and protection of your trade name. This is, in fact, your own responsibility as a business owner. Just because you own a business with a unique name doesn’t mean you’re protected from infringement. The best way to protect your business, product, service or brand name is to register it as a trademark.
Too many companies refuse to protect their goodwill against infringement: This is because business owners believe that registering and protecting trademarks is too costly for them. Consider this: Trademark registration protects your business on a national scale and can include your business name, designs, logos, slogans, and packaging, as well as other material that is unique to your business. When you own a registered trademark, you are protected from infringement for ten years and then indefinitely with renewals every decade.
Trademark registration can be made simpler with the consultation of an experienced trademark attorney. Your lawyer can help you in the process of filling out your applications, as well as combating any legal action taken by your competition. You can even apply for international registration if you are an exporting company.
Once your brand has been registered, you basically get a monopoly on that name within your country. Trademark protection is simple: when your trademark is registered, you can prevent other companies from registering similar names that may be confused with yours. You may also take immediate legal action if another party infringes your trademark rights.
