LESSONS FROM THE WORLD INTELLECTUAL PROPERTY DAY CONVERSATIONS: FUNCTIONS OF TRADEMARKS AND THE POSSIBLE IMPACT ON SMES
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A great trademark is appropriate, dynamic, distinctive, memorable and unique.
A trademark is any sign, combination of letters, images, or symbols used to distinguish the goods or services of one party from those of another competing party in the market. Following our blog series on lessons taken from our World Intellectual Property Day conversations; this piece will seek to highlight some key functions of trademarks and how SMEs are likely to be impacted by the same.
Key Functions of Trademarks
A trademark’s primary function is to be a badge of origin. It differentiates goods or services of one entity from those of competing entities in a given market.
As a result of differentiation, trademarks encourage competition among entities which provides for a fairer market space.
Trademarks serve to provide consumers with quality assurance. This in turn contributes in defining the image, goodwill and reputation of a company’s goods or services in the eyes of consumers.
Trademarks are often used to advertise goods or services. The mark represents the good or service and also helps identify its respective producer.
Trademarks also provide an incentive to companies to invest in maintaining or improving the quality of their products in order not to deceive customers and ensure that goods or services bearing the trade mark have a positive reputation.1
Impact of Trademarks and Trademark Protection on SMEs
From our conversation on WIPD, we noted that all the enterprises had registered trademarks. The entrepreneurs recounted the value they found in their trademark and why they opted for registration. For Nature’s Touch LLP, their trademark assisted them in differentiating themselves in the market. It positioned them and their products differently from other skincare product. From this, they were able to create some brand loyalty as their customers could trust the products bearing their trademark. Regarding seeking registration for their trademark protection, Natures Touch LLP noted that it has helped with their social media marketing and as a strategy it contributes to their brand value. Additionally, with a registered trademark, it is easier to enforce your rights against unauthorized use of your mark by third parties.
Seeking trademark registration for Lishe Living Nutrition Clinics, was their way of obtaining a ‘seal of approval’ for them and their products. In the market there are many other nutritionists working on various products, the trademark assists in differentiating Lishe Living Nutrition Clinics as a unique brand. Other than differentiating their services, trademarking also worked to assure their consumers of the quality of service they would receive. In her own words she said,
“When someone hears that a particular person is a ‘Lishe Living’ nutritionist, what they try to convey is that this person actually uses evidence based solutions in rendering individualized medical nutrition therapy.”
Let’s Drift, however, had an unregistered mark but were in the process of obtaining registration. In the words of Alex Kamau, sometimes in business, it is not necessarily the person who builds the best product who necessarily wins but rather the person who is able to ‘differentiate themselves from the herd.’ Unregistered marks are, basically, marks that have not been registered. Unregistered marks can still serve the purpose of distinguishing goods or services, however in cases of infringement or unfair competition, enforcement can be extremely challenging. In Kenya, Section 5 of the Trademarks Act, CAP 506, provides that no person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark. In other words, though registration of a mark is not compulsory, it is prudent as it gives one a wider set of remedies in case of infringement.
Trademark protection allows one to set themselves and their products or services a part from competitors. Trademark protection, especially through registration, for one’s products or services is an important part of building and scaling a business.
1 Trademarks: An introduction to Trade marks for Small and Medium -size Enterprises; Kenya Industrial Property Institute <https://www.wipo.int/export/sites/www/sme/en/documents/guides/customization/making_a_mark_kenya.pdf>