Brands are more than mere names for goods or services. They convey value, create recognition, and strengthen customer loyalty. As intangible assets, brands can generate significant corporate value and simultaneously serve as a strategic instrument to secure market positions and manage competition.
Developing a brand is not only a creative task, but also a strategic and legal one. Distinctiveness, conflict checks, a well-thought-out definition of the goods and services listed, and the strategic orientation of the territorial scope of protection are key success factors and can lead to significant problems if neglected.
Starting point: Distinctiveness and protective capacity
A key requirement for the registration – and thus the protection – of a trademark is its eligibility for protection. A trademark must possess sufficient distinctiveness. This means it must be capable of distinguishing the goods and/or services of one company from those of other companies. Purely descriptive terms, such as "apple" for fruit or "fast" for courier services, are not suitable for this purpose and are therefore not eligible for protection. Trademarks that are not eligible for protection can be used by anyone and therefore fail to fulfill essential trademark functions. In contrast, invented terms or originally designed word or image marks generally possess high distinctiveness and provide a good basis for brand development.
Avoiding collisions with older trademarks
A significant risk in brand development is the potential conflict with existing trademark rights. The principle of priority is crucial here – the older trademark takes precedence. Trademark conflicts are so critical because the owner of the older trademark rights can not only prevent the registration of the newer trademark, but – and this is far more serious economically – prohibit the use of the newer trademark at any time.
The following scenarios of a trademark conflict must be considered:
- Identical trademarks for identical and/or similar goods/services regularly lead to a conflict.
- Similar trademarks can also be problematic if there is a likelihood of confusion. The likelihood of confusion is assessed according to legal criteria, including aspects such as the similarity of the marks, the proximity of the goods and services, and the distinctiveness of the earlier mark. Even the mere possibility that the target audience of the mark might mentally associate the two marks can be sufficient to establish a trademark conflict.
It is therefore crucial to check potential trademarks for possible conflicts with older trademarks – especially in the complex area of similar brands – right from the start of brand development. The later the conflict is discovered, the greater the damage.
Definition of protected goods and services
Trademark protection is limited to the goods and services listed in the application. Subsequent expansion is not possible after registration. Therefore, defining the goods and services for which the trademark seeks protection is of paramount importance. A strategically sound selection thus includes both the goods and services currently relevant to the trademark and complementary or potentially interesting goods and services to safeguard the future development of the trademark. For German trademarks and European Union trademarks, a grace period for use applies, according to which use of a trademark is only required after five years from registration to maintain its legal effect. This allows for tactical flexibility by broadening the scope of protection to also consider medium- and long-term development opportunities.
Territorial limitation of trademark protection
Trademark protection is territorially limited. National trademarks are only effective within their respective countries. For the European single market, the EU trademark is a suitable option, as it offers uniform protection in all EU member states. Furthermore, international registrations under the Madrid System can secure trademark rights in other countries. The choice of protection area should be guided by the company's current and planned market strategy, with foreseeable sales plans being secured early on through trademark protection in the target markets – due to the priority principle and the associated precedence of the earlier trademark.
Conclusion
Developing a brand requires careful legal and strategic planning. If implemented meticulously, a brand becomes a valuable asset and a crucial building block for a company's sustainable market positioning. Conversely, shortcomings in brand development can lead to serious problems with brand usage, even resulting in a complete ban on sales under the brand.