Because goodwill is your name and all things your name encompasses, you must adequately protect yourself against infringement. Consider this: a businessman in your local area (Area A) finds a home renovation company. He develops and starts selling a tool of his own design, which he calls ‘Benson’. The product is a hit in the immediate area and its popularity increases along with the name of the company.
A businessman from the neighboring city (Area B) visits the home hardware store in his area and buys the ‘Benson’, and decides that he could make a profit from another man’s idea. He opens his own renovation business in the neighboring town and sells his own version of the ‘Benson’.
And yet, as he did not receive permission to reproduce the ‘Benson’, he was unaware of the original method of manufacture, and his own ‘Benson’ is a failure. Your store is out of service and several of your customers are suing you for being injured by the use of your product.
Certainly, the entrepreneur was doomed, as he stole the idea for the invention in the first place. In fact, this is something that happens frequently in small businesses around the world. However, your own failed business sends ripples of repercussions to the entrepreneur in your area. These repercussions include:
- Consumers from Area B traveling to Area A will not buy a ‘Benson’ due to its bad reputation.
- Consumers in Area B do not realize that the two companies are in fact not affiliated and therefore refuse to buy a ‘Benson’.
- The entrepreneur from Area A cannot expand his business to Area B because his product already has an undeserved bad reputation there.
- The Health and Safety department in Area B decides to visit the business in Area A to ensure that the product does not have the same faults as the defective product.
- The media picks up the stories of injured consumers and televises them: Potential consumers condemn the Area A product.
- The Area A business is at risk of closing due to a lack of business it receives due to an undeserved bad reputation.
Any of these situations could occur because the entrepreneur in Area A did not protect his goodwill. The entrepreneur could have registered his trade name and the product name in order to gain the power to protect himself from infringement by the rogue entrepreneur. If the entrepreneur tried to open his own store and sell the same product without explicit permission, the entrepreneur in Area A would have the right to take legal action to protect his good name. Therefore, his goodwill would be protected.
The government is not responsible for the preservation and protection of your trade name. In fact, this is your own responsibility as a business owner. Just because you own a business with a unique name does not mean that you are protected from infringement. The best way to protect your company, product, service or brand name is to register it as a trademark.
Too many companies forget to protect their goodwill against infringement – this is because business owners believe that registering and protecting trademarks is too costly for them. Consider this: Trademark registration protects your business on a national scale and can include your trade name, designs, logos, slogans, and packaging, as well as other material that is unique to your business. When you are a trademark owner, you are protected against infringement for ten years and then indefinitely with renewals every decade.
Trademark registration can be simplified with the consultation of an experienced trademark attorney. Your attorney can assist you in the process of completing your applications, as well as in combating any legal action taken by your competition. You can even apply for international registration if you are an export company.
Once your trademark has been registered, you essentially get a monopoly on that name within your country. Trademark protection is simple: When your trademark is registered, you can prevent other companies from registering names similar to yours that could lead to confusion. You can also take immediate legal action in case another party infringes on your trademark rights.