Why trademarking the name of your small business is vital, by Lord Sugar’s expert

When you’re incorporating your business, there’s likely to be a mountain of paperwork to battle through before you launch. 

It’s understandable why many business owners overlook trademarking for fear of creating even more work, but it’s a crucial step. 

This is because registering their business name can help smaller businesses to protect their reputations and future earnings.

Seal of approval: Lord Sugar used Trademark Wizards for all of his trademark applications and is now a director of the company

We speak to Oliver Oguz, managing director of Trademark Wizards, a firm used by Lord Sugar which he subsequently invested in. 

He tells us about the importance of filing a trademark before the launch of a business, and whether it’s really necessary to get one for a website.

Should you file a trademark before you’ve launched your business?

Trademarking might seem a daunting prospect but it’s actually relatively straightforward – it costs £200 and should take around four months.

It’s an extra step that could prove invaluable to business owners, helping them to protect themselves from counterfeiting and possible future legal fights.

Without registering a trademark for your brand, there’s very little you can do to protect what you’re selling.

‘People invest a lot of time and effort into building brands up, especially family businesses, and then people end up just copying their name. People always take a shortcut, and find a name with a good reputation,’ says Oguz. 

‘They find out the information online, they’ll check to see whether they’ve got a trademark and if they haven’t, they’ll happily file that trademark and start using the brand.’

Oguz adds: ‘Sometimes it’s blatant infringement, people with no shame whatsoever, just carbon-copying goods. Other times, they can be using a mark that is similar, in relation to identical goods. 

‘This could lead to some confusion, because people will think that the two companies are linked.’ 

One sale lost because someone has bought goods from another company thinking they’re yours, is one too many. 

Fortunately, more and more small businesses are wising up to the threat of counterfeiting and are registering their trademark.

‘I’ve asked people why they register trademarks and sometimes they say it’s because they’ve had their fingers burned in the past. They’re never going to let that happen to them again,’ says Oguz.

Lord Sugar and Oliver Oguz, managing director of Trademark Wizards 

If you’ve already launched without a trademark and you’re forced to file one at some point to protect the brand, you might find that someone else has filed a trademark in your name.

In this scenario, the small business will have to fight to get the trademark back, or try and cancel the trademark that’s been filed in order to get their own name protected.

In order to cancel the trademark, you have to rely on something called unregistered rights.

‘You have to prove that you’ve got a reputation and therefore there’s an evidential burden there. You have to prove that you have goodwill, you have to prove that the person who you’re complaining about is misrepresenting themselves,’ explains Oguz.

‘Then you have to prove that there’s a likelihood of damage. That procedure costs a lot of money when you could have just had a trademark registration and waved it in front of them.’

You can, of course, start trading before the application has been processed. This is because of something called the priority period, which means when you file your application you’re protected around the world for six months, as long as you file your foreign trademarks within that timeframe.

The trademarks will be backdated, minimising the chance of someone hijacking the brand.

Check the name BEFORE starting your business 

While there are plenty of chancers out there looking to piggyback off established companies who don’t hold trademarks, some businesses are making simple mistakes before they’ve launched.

‘I think people confuse trademarks with company incorporations,’ says Oguz. ‘They think that once they’ve incorporated the company and they have a limited company, they own the brand.

‘Sometimes people even think just because they own the domain name, that they own the name.’

Get protected: Owning a domain name doesn’t mean you own the rights to your company name, so it is important that those with online businesses register a trademark

If it turns out there is an existing trademark for something related to your brand, you could face serious consequences. This is why it’s so important to do proper due diligence before you launch.

If you infringe on someone’s trademark, the other party is entitled to various remedies, one of which is forcing you to stop using the brand entirely.

They could also get the compulsory transfer of domain names and social media handles, and can claim up to £500,000 in damages.

‘I think when people start businesses, they often don’t check to see whether other earlier trademarks have been registered. 

‘They might do a Google search, or they might go to Companies House, not see the company name and think that’s okay. Then they launch the brand and get a cease and desist letter from someone with the trademark.’

Do you need to register a trademark for an online shop?

If you run a small business online as a side hustle, trademarking might not have even crossed your mind.

However, as with any other business your reputation is on the line and you should consider whether you could be losing sales to someone with a similar brand.

‘If you’re knitting someone a jumper with a pattern you might not [file a trademark]. But you’ll have a shop, a handle, user name, and that’s your brand. 

When people are writing reviews about your shop and service, that needs to be protected,’ says Oguz.

When you file an application for a trademark, there are different classes of goods. 

‘If you had a shop you would protect your brand for retail services connected with knitted scarves. At the same time, you would also probably protect your brand for the scarves themselves.

‘What could happen if you did have an Etsy shop with a good reputation for making scarves, is someone could set up a brand of scarves and put your name on it.

‘People will see think that the brands are connected because the goods and services are closely related to each other.’

This post first appeared on Dailymail.co.uk