Registering a trademark: why is important for startups

Registering a trademark is a key aspect for every new company that is established and for startups, but why is it so important?

The registered trademark is part of the category of intangible assets of a company, and as such, it is subject to protection.

In our legal system, most of discipline regarding trademarks are contained in the Industrial Property Code (“CPI”), and in some provisions of the Civil Code, as well as by legislative instruments of European Union and international conventions to which Italy is a member.

What is a trademark

The trademark, in law, indicates any sign, symbol or logo which can be represented graphically, words, drawings, letters, numbers, but also sounds, shape of a product or its packaging, combinations or chromatic shades, if it is suitable for distinguishing the products or services of one firm from those of others. 

Usually, the trademark is affixed to the product or is in any case visible using the services of a specific company.

Furthermore, trademarks can consist of any sign that can be submitted and registered in UIBM (Ufficio Italiano Brevetti e Marchi) or other trademark register of a foreign country, to be defined with clarity and precision. On this topic, a misconception which often occurs is to assume that a logo, used in a business activity, is always a brand. 

In fact, logotypes, as graphic representations, fictional or not, used in a business activity can be subject of a trademark registration or be used as trademark. However, it would be wrong to consider that all logos can enjoy the protection granted by our trademark law, in fact, there are numerous conditions and requirements that must be respected in order that entrepreneur can benefit the relevant legal protection.

For the individual brand, however, two concepts must be clarified immediately: what is a strong brand and what a weak brand.

A brand is weak when:

• trademark with a weak distinctive capacity typically it is a trademark composed of descriptive signs or with evident conceptual adherence to the distinguished products.
• minor protection: for the weak trademark, even slight modifications or additions are sufficient to exclude confusion.

A brand is strong when:

• brand with a strong distinctive ability and able to impress itself in the mind of the consumer, that is typically it is a brand made up of signs with no conceptual adherence to the distinguished products
• extension of protection: in fact, all modifications, and variations – even if significant, relevant, and original – that leave the substantial identity of the type persist are to be considered prohibited.

Why registering a trademark is important? What are the benefits?

Registering a trademark allows the owner to get numerous advantages over competitors:

• More effective protection in respect of commercial value of a brand – Registering a trademark allows the owner to exploit the investments made to launch and establish their product or service on the market. In this way, in fact, the owner acquires the rights in the entitlement to make exclusive use of trademark, although it is however possible to grant an exclusive or non-exclusive license to third parties., preventing third parties from appropriating or using identical or similar signs in the same market segment and acting against trademark registration applications, which conflict with his own rights. 

• It creates a protection perimeter in favour of owner, protecting him from competing trademarks and preventing counterfeits by third parties – Registering a trademark allows the owner to defend himself against competing signs on the market that could confuse consumers or damage the owner reputation. The ownership of a registered trademark, in fact, constitutes a title to file a counterfeiting action based only on title, claiming the violation of his rights. Therefore, the registration of trademark allows an easier protection for the owner against third parties.

• It constitutes a title that can be a source of income and a subject of commercial agreements with third parties – Registering a trademark creates a commercial value that can be exploited by the owner, who can license the trademark or sell it entirely to other subjects. In addition, trademarks can be used to access finance.

Summarising, registering a trademark confers several rights, advantages, and powers to the owner:

• Exclusive Use – Right to use the trademark to distinguish the products or to license it to third parties.
• Reaction – Right to prevent unauthorized third parties from using an identical or similar trademark.
• Reassignment – Right to obtain the reassignment of an internet domain name identified to its own brand.
• Customs – Right to block counterfeit goods at customs.
• Internet – Right to prevent third parties from using your trademark as a keyword in internet search engines.

Registering a trademark: Who can

Not only the entrepreneurs who will use it directly, but also those who, even without the qualification of entrepreneur, intend to acquire an exclusive right on a sign and then allow its use to others or even sell it, can obtain the registration of a trademark to third parties.

The interested party can request registration by making a postal deposit, or by going directly to the Chamber of Commerce. If in possession of a digital signature, the applicant party can also utilize the electronic filing. Currently, the only entities who can represent the interested parties before the UIBM are industrial property consultants registered in the Italian Industrial Property Consultants Institute (the agents) or lawyers registered in a Bar Association (the representatives).

The prerequisites and requirements for registering a trademark

For registering a trademark successfully, all signs suitable to distinguish the products or services of a company from those of other companies, and which can be represented in the RIBM register in such a way as to allow the clear and precise determination of the object of protection conferred to the holder, can be registered.

Furthermore, Italian legislation requires for registering a trademark, that it has the requirements of novelty, distinctiveness, and lawfulness.

Types of trademarks according to the nature of signs 

The current regulation contains a sample list of the signs that can be registered, that is: the words, including names of people, drawings, letters, numbers, sounds, the product shape or its packaging, the colour combinations, or shades.

Furthermore, it is forbidden to register as a trademark:  

• people portraits 
• names other than the applicant’s one. 
• well-known signs if consent is not given by owner. 
• signs consisting solely of the shape or a characteristic imposed by the nature of product, or which are necessary to obtain a technical result, or which gives substantial value to product. 
• ensigns and other symbols of public interest, as well as signs which damage the image or reputation of Italy. 
• geographical indications.

Novelty 

Signs which are not new cannot be registered, i.e.  if identical or similar signs are already on the market to distinguish identical or similar products or services to those for which registration is requested. The legislation specifies that signs which are:

• identical or like a sign already known, not purely locally, as a trademark or distinctive sign of identical or similar goods or services, if there is a risk of confusion for public, even if only potential, which may also consist in an association risk between the two signs.
• identical or like a sign already known, not purely locally, such as firm, denomination or company name, sign and domain name used in the economic activity, or other distinctive sign adopted by others, if there is a risk of confusion for the public, even if only potential, which may also consist in a risk of association between the two signs.
• Identical to a trademark already registered by others in the State or with efficacy in the State for identical products or services.
• identical or like a trademark already registered by others in the State or with effectiveness in the State for identical or similar products or services, if there is a risk of confusion for the public, which may also consist in a risk of association between the two signs.
• identical or like a trademark already registered by others in the State or with effect in the State, for identical, similar, or non-similar products or services, when the earlier trademark has a consolidated reputation in European Union or in the State and when the use of subsequent one without a lawful ground would unduly take advantage of the distinctive character or reputation of the earlier sign or would harm them.
• identical or like an already well-known foreign trademark whose reputation also influences the Italian territory or a significant part of it.

Distinctiveness 

The sign cannot consist exclusively of signs that have become commonly used in current language or in the constant uses of trade and cannot consist exclusively of generic names of products or services or descriptive indications which refer to them. The only exception is the hypothesis in which the sign, before the application for registration, has acquired distinctive character.

Lawfulness 

The sign cannot be against public order and must not violate the provisions of the law.

Conclusion

The requirements for registering a trademark can be summarized as follows:

• New – The trademark must not be identical or like other trademarks registered for identical or similar products or services.
• Representativeness – The trademark must be clearly represented, so that the object of protection is clear and certain for the authorities and the public.
• Not harmful – Not to constitute a violation of exclusive rights of third parties.
• Original and not generic – The trademark must possess the so-called distinctive capacity, i.e., generic, or merely descriptive names cannot be registered.
• Truthful – The trademark must not contain elements capable of deceiving the public, regarding the geographical origin, the nature or the quality of the products or services.
• Lawful – Not contrary to the law, public order, or morality.

Before registering a trademark do the clearance searches 

Before proceeding with the presentation of registering a trademark, and so, with the application, and even just starting the use of a certain distinctive sign, it is necessary to verify that identical or similar trademarks have not already been registered, for identical or similar products or services.

Such a check, commonly called clearance search or availability search, shall take into consideration the territory for which protection is to be requested and the products / services for which the trademark is to be registered.

It should be noted that UIBM, unlike other Offices, does not carry out any prior clearance search on trademark registration applications. This means that, even if the registration procedure ends with granting the trademark, without therefore third parties submitting comments in the period between the publication of application and the final granting, this does not exclude that third parties may subsequently request the invalidation of trademark registration deemed to conflict with their rights in force prior to the filing of trademark application.

The clearance search can be carried out free of charge using databases made available by the competent offices. Among these, one of the most useful databases is TMview, made available by the EUIPO, the European Union Office for Industrial Property, which collects the data of the national or international trademark offices participating in the project, including the ‘UIBM, the EUIPO and WIPO. However, it is advisable to rely on specialized firms or consultants for the preliminary study of the trademark application also because the search for clearance allows you to have access to more reliable tools and to make use of the expertise of sector professionals. In fact, given the importance of that search, it is inadvisable and imprudent to rely solely on free of charge databases, as:

• databases are not always up-to-date or reliable as to the contained information. 
• it is not easy, for those who are not consultants, lawyers, or sector professionals, to verify whether the trademark to be filed is or is not in conflict with a trademark earlier registered.
• there may be other prior unregistered rights which could conflict with the application of trademark registration. 

If the search for clearance should show that the sign subject of the registration application conflicts with an earlier right, the consultant or lawyer would also be able to advise the applicant and support him in the most appropriate strategy, whether it would be to negotiate with the owner of earlier trademark, to contest the existing trademark, to continue with the registration being aware of the risks, to renounce registering a trademark or modify it appropriately.

The validity of the trademark only for some specific classes

The registration protects a trademark of certain products or services only with reference and limited to their detailed and accurate description in the registration application, therefore one of the most delicate aspects of registering a trademark, along with the representation of the trademark itself, is the identification of the product classes and the description of the products or services for which the protection is required.

Identification of product classes

The identification of the product class of protection is performed based on the Nice Classification, introduced since 1957 by the World Intellectual Property Organization to provide a reference point shared by several States for the registration of brand names. The Nice Classification is updated annually and is mandatory both for the registration of Italian trademarks as well as for the registration of European Union and international trademarks at WIPO, in addition to the registration in the state’s member of the Nice Agreement and, in several non-member states. The Classification includes explanatory notes, as well as online databases such as TMClass, to allow easier identification of the product class of interest. Nonetheless, this remains an extremely delicate and complex step.

Description of the products or services for which protection is requested

In addition to identifying the relevant product class, it is necessary to proceed with the description of the products or services for which registration is requested. Such a description must be made with precision, to avoid both unnecessarily limiting the required protection as well as extending it improperly.

Conclusion

The identification of the product classes and subsequent description of the products or services involves the delicate and complex assessment of the applicant’s current abilities and reasonable expectations of growth, to avoid registration for classes for which the sign cannot be used and, at the same way, to predict for which products or services it is realistic to expect that the sign will be effectively used in the future.

In any case, therefore, the products or services identified in the registration application constitute the starting point for defining the extent of the protection conferred by the registration itself.

If you wish to extend the protection of your trademark to other products or services in addition to those originally indicated, you must file a new registration application. Similarly, if the owner wishes to reduce the number of products or services indicated in the first filing, it will be necessary to file a divisional application, limiting the product classes or products / services with respect to an application already filed.

Unregistered Trademark 

In Italy, specific protection is also granted to the unregistered trademark that is used in the commercial activity of a company. However, the protection thus granted is more difficult than that offered by a registered trademark, as the burden of proof is heavier for the owner of a “de facto” trademark. Therefore, failure to register a trademark leaves the owner more exposed to competitor activities and entails greater risks for the business.

In conclusion, the following provisions apply to the “de facto trademark”:

• The owner of an unregistered trademark is protected within the limits of pre-use.
• Third parties could register the de facto trademark if it has a purely local reputation. If the pre-user was able to provide proof of national notoriety, then the third party could not register as the novelty requirement would be missing.

What does jurisprudence tell us in relation to the de facto trademark?

The demonstration of the diffusion of the de facto trademark in a relevant context of the national territory, with an intense supply and for a considerable period of time, is necessary so that the prerequisite of the exclusive right in favour of said trademark and the consequent nullity of the trademark subsequently registered can be considered integrated. , while a local pre-use does not entail the right to prohibit the subsequent registrant from using the trademark in the local distribution area, without taking away the novelty of the subsequent registration, which must, therefore, be considered legitimate even in the presence of a previous use of the an important sign of purely local fame.

Conclusions on registering a trademark

If you are interested in Trademark’s registration, please read more on: Trademark’s registration procedure in Italy: a guide for startups and Trademark’s registration procedure internationally: a guide for startups.