Trademark Registration Can Set You Apart in a Poor Economy

A trademark is a valuable asset of your business and needs to be protected.  In a poor economy there is more incentive for bad actors to counterfeit your goods or try to trade on the goodwill generated by your name.  Trademark registration is one way to reduce the time and expense necessary to stop them in the tracks.

• Trademark registration is important to protect your most valuable asset.
• This is especially true in a poor economy when infringement and counterfeiting is more prevalent.
• Statistically, trademark filings increase when the economy becomes more volatile.

Protecting your trademark should be one of your biggest priorities

In a prior article, I stated that trademark filings go up in poor economic times because setting oneself apart from their competition is more important in a competitive market.  Also, there is good data that show that companies who implement a comprehensive IP (trademark & copyright) strategy see an increase in revenue.

Arguments against this position

A reader contacted me and asserted that in poor economic times brand loyalty is less important because people are going to purchase more economically prices goods and that they will be less likely to pay more for brand loyalty.  The reader also posited the argument that because there are essentially two separate classes of consumer, things like product counterfeiting have little to no actual economic impact.  The reader uses the example of the individual how buys a Rolex for $50.  The purchaser knows it’s not a real Rolex, and likely would not purchase a real Rolex; therefore, there is little to no dilution / tarnishing / loss of sales on Rolex.

The impact of global counterfeiting on trademarks is substantial

Respectfully, I must disagree with this reader.  The reader’s argument does not consider the impact of global counterfeiting on everyday lower cost products.

For example, recently over 11,000 counterfeit auto parts were seized (see: http://article.wn.com/view/2011/01/30/Counterfeit_spare_parts_seized/ ); additionally, counterfeit music CDs and Movie DVDs are a regular occurrence, worldwide.  If this example is too remote, there were also $280 million worth of fake goods seized in Dubai in November 2017.

You don’t need to have a trademark like Gucci or Nike to benefit from trademark registration.  In fact, the threat of triple damages and attorney fees is even more useful for smaller companies.

We need not be talking about the difference between a Rolex and a fake Rolex, where both parties know the product is fake and there is minimal dilution of the brand, for there to be a significant impact on financial livelihood of the legitimate company.  What about the consumer who simply wants to fix their car, or purchase an album or movie. With internet commerce frequently used for the sale and purchase of goods, consumers rely on brand names and the confidence instilled by those brand names.  Counterfeit products do indeed affect the legitimate trademark holders’ bottom line in terms of lost sales and loss of reputation.

How does counterfeiting harm businesses?

Companies spend substantial funds on quality control so that they will have an excellent product and thereby an excellent reputation. It would be short sighted to ignore a company’s most valuable asset, their name and reputation.

I don’t deny that there is a certain logic to the reader’s argument, however, it simply does not track with the facts of an increase of US trademark filings, more proactive enforcement of trademarks and copyrights by their owners and increases in revenue in companies who implement comprehensive trademark strategies.  The reason for this is that companies want to set themselves apart in a more competitive market.

Trademark filings by year

In recent years the numbers for US trademark filings currently stand at:

2009 * 265,800

2010 * 368,041 (note the significant increase in filings from the previous year after the housing market collapsed).

2011 * 397,926

2012 * 413,782

2013 * 432,622

2014 * 454,361

2015 * 503,288

Ultimately, protecting a company’s trademark by registering it, is not simply an additional cost, but rather a tool to protect against losses of revenue and reputation and can even increase profits.

Whether the economy is good or bad your trademark is your most important and most valuable asset.  If you want to file a trademark and protect it, you will want to consult with a trademark attorney who can protect your rights.

Contact an attorney with Veritas Business Law, LLC for a free consultation.