Trademarks Management Strategies for Caribbean SMEs
Author: Marsha Simone Cadogan, Barrister & Solicitor, MSC Intellectual Property & Technology Law; Canaan Bridges Consulting
Trademarks are one of the most important forms of intellectual property rights and are highly valued in global consumer markets. While the most valuable trademarks are associated with commodities from the United States, China and Japan, the ability of Caribbean entrepreneurs to leverage trademark rights to regional and global success stories should not be underscored. How can Caribbean entrepreneurs leverage their trademarks to become relevant IP assets in COVID-19 times and beyond?
An Explainer on Trademarks
A trademark is a source identifier that conveys specific meaning about the source of a product or service to consumers in a commercial context. Trademarks can be words, symbols, a combination of words and design or, can be more non-traditional and be represented by a sound, color, smell, hologram or a three-dimensional design. The latter options are registrable if the jurisdiction’s legislation so permits. Examples of non-traditional trademarks include Metro Goldwyn Meyer (MGM) lion’s roar, the Tarzan Yell, BMW’s 4-tone melody sound, and the color red applied to the sole of Christian Louboutin’s shoe. Trademarks can be registered or non-registered. Globally, most jurisdictions recognize some level of protection for un-registered trademarks. However, should infringement occur, the scope of protection for these marks are limited. On the other hand, a trademark that is officially registered with an entrepreneur’s national intellectual property office can safeguard the entrepreneur’s interests on a broader scale, if effectively commercialized and managed. In most countries, trademarks are registered for a period of ten years and renewable for subsequent ten-year terms thereafter.
Beyond Trademark Registration: What Matters
The registration of a trademark is never sufficient to secure its long-term presence in global markets. Trademarks should be strategically monetized and managed to generate revenue and to sustain brand values in global markets. While a registered trademark may provide its owner with rights to use the mark in association with specific goods or services in specific markets, this right is not indefinite, neither is it absolute. The point is, trademarks can be cancelled or revoked, whether this is initiated by competitors, or wholly by administrative procedures. Given these ever-present dynamics, what strategies can you use to effectively manage your trademarks? Here are three ways of doing so:
1. Using the Mark
Many countries are now moving away from requiring use of a trademark as a condition for registration. While use may not be integral to registration, continued use of the mark is still essential for the trademark to remain in existence long-term. In most countries, a trademark can be expunged if within three years of the filing of such an application the trademark has not been used in association with the goods and/or services for which it is registered. What does this mean to you as a Caribbean SME, especially if your market is international? Ensure that you have an active presence in your registration markets. This may mean proof of sales and advertising that tangibly reaches consumers in countries where your mark is registered. For example, if your trademark covers services in more than one classes, it is best that there is sufficient commercial usage of the mark in all registered classes. For example, the restaurant chain McDonald’s lost the right to use the word “Big Mac” in association with sandwiches in the European Union specifically for this reason – insufficient presence of the mark based on sales in the relevant consumer market.
2. Tackling Counterfeits
Counterfeits have a negative impact on brand values. A recent report by the European Union Intellectual Property Office indicates that between 2013-2017, knock-offs decreased right holders sales by 50 billion euros per year. In the presence of budgetary constraints in COVID-19 times, SMEs may find it challenging to deal with trademark infringements on a wide-scale level. At the same time, a strategic approach to trademark infringement is essential, even in pandemic times. For entrepreneurs who have licensed their trademarks (for example, by way of a franchise or licensing agreement) there remains a responsibility to monitor how your trademark is used by licensees and sub-licensees. In addition to this responsibility, trademark licensees also have an obligation to ensure that they take reasonable measures to safeguard the mark against counterfeit uses.
3. Managing Trademarks in Digital Platforms
As more of global commerce shifts to digital platforms, trademark owners will likely need to exercise more vigilance in protecting their marks online. Consistency in how the registered trademark is expressed or appears in digital platforms is one essential point to bear in mind. A business that carries on most of its commerce online and expresses its registered mark in variations that are substantially different from what it was registered as, may compromise the continued registration of the mark. Another issue relates to the increased prevalence of cybersquatting cases since the start of the pandemic. Cybersquatting is the bad faith registration of a domain name to discredit or gain from the reputation of a trademark. If not addressed, cybersquatting may lead to the depreciating of mark’s reputation in its consumer markets. Monitoring how your trademark is used in digital platforms is increasingly integral to the success of a firm’s intellectual property strategy.
With budgetary constraints and uncertainties in global markets, it may be challenging for SMEs to implement trademark strategies in all consumer markets. However, it is also in these times that Caribbean SMEs are likely to benefit long-term from a strategic approach to commercializing and managing their trademarks.