It was then that the world woke up to the possibility of using the trademark, now also incorporating the name, the mark, the packaging and the overall appearance, as part of the "marketing" strategy. Brand loyalties also developed with respect to trademarks that became well-known. Some marks became so well-respected that any product they would be placed upon would be guaranteed immediate success. Some others, which were so well-known for a particular product, could not sustain themselves for any other. Whatever be the case, it was soon apparent that the trademark was an immense force behind the success or failure of a business.
Trademarks were no longer mere identity tags on products; they are now indicators of trade origin, guarantors of quality and instruments for marketing. Businesses can no longer afford to disregard the importance of IP, particularly trademarks, for their development and growth. With this, and the advent of the information age, a gradual but effective change took place. The ratio of tangible to intangible assets of business began showing a marked shift in favour of the intangible. By the turn of the last century, by one estimate, about 80% assets of a business could be comprised of intangible assets. IP, particularly trademarks, comprises a large chunk of this.
In some cases, the value of a business' IP exceeds the value of all the cumulative assets of the organisation. Take the example of the trademark Coca-Cola. It has, for years, been the global leader among trademarks in terms of value. By some accounts, it is estimated to be worth 66,667 million dollars! IBM and Microsoft respectively take the second and third spots with values being just over 59,000 million dollars1.
It is no wonder that IP law has seen such tremendous growth and development in the past few years. Also, there has been a concerted effort to not only register trademarks and claim rights over them, but businesses across sectors have made considerable investment in terms of time, money, manpower and energy to actively seek protection for their marks. However, it is still the large corporations with diversified and large trademark portfolios that lead the way in seeking protection for and defending their rights in a trademark. Small businesses, and not just in India but the world over, are less inclined to take preventive measures to contain exploitation of their trademarks.
A major concern for businesses when it comes to protecting their IP is the costs, time and continuous watchfulness that is required to maintain the distinctiveness of a trademark. IP actions, including prosecution of every application and litigation over IP rights, can be time consuming and expensive. This is compounded by the very territorial nature of trademark protection. Registration of a trademark in one jurisdiction only protects the mark in that jurisdiction. In order to obtain world-wide protection, applications have to be filed in all jurisdictions where a business can foresee activity and use of the trademark in the future.
Another area of concern is the internet. The law allows the use of a trademark to two concurrent users in different jurisdictions. Also, in the same jurisdiction, in terms of different goods, a mark may be used. However, on the internet, where a domain name is not just a mere address to access a website, but a manner of identifying the owner of the website, this can present trouble. A bigger concern for businesses is of cyber-squatting, where a domain name representing the trademark of a business is registered in bad faith by an unrelated party, only to seek monetary benefit out of the registration.
Very often, businesses when small and localised tend to seek protection in only their area of operation. However, when it comes time to expand, they find that the mark is being used by other concurrent and often, bona fide users. One cannot also disregard the benefits of a well-managed trademark portfolio in these recessionary times.
IP portfolios can be used as collaterals and as securities to hedge the onslaught of economic downturns and are often the only valuable commodity that a business can rely upon. At times, the value of a trademark may be all that is left, even after a business has shut down.
"Binaca" toothpaste and "Bakeman's" biscuits still have recall value, long after their owners shut shop and moved on.
Therefore, it is imperative for a business, since its inception, to seek protection for their IP rights in all sphere of activity and all jurisdictions where the concern may engage itself. Time consuming and expensive the measure may be, but just a glance at some trademarks and their values today can be sufficient.
(The author is a Partner in Lall Lahiri & Salhotra)
Source: India Syndicate
