10 Benefits of registering a trade mark

The value and benefit of registering a trade mark, especially in the case of new businesses, is often overlooked.  Most business owners fail to realise that up to 80% and more of a business’s total value resides in its non-tangible assets.  It is therefore imperative that business owners take the necessary steps to protect their assets from unauthorised use and damages.  One of the ways in which to protect these assets, specifically intellectual property, is through the registration of trade marks.

What qualifies as a trade mark? See our Trade Mark Guide

By registering its trade marks, the proprietor of such trade marks will be awarded and enjoy a number of benefits which include:

  1. The exclusive right to use the mark (monopoly right)

By registering a trade mark the proprietor is awarded the right to exclusive use of the mark in respect of certain goods or services, the right to sue for infringements and granted remedies in respect of the unauthorised use of such marks, and to object to the use or registration of confusingly similar marks.

  1. Registration serves as prima facie proof of the proprietor’s rights to the trade mark

A trade mark registration serves as prima facie evidence of not only the validity of the registration but also the rights conveyed to the proprietor of such registration.

  1. Purevent third parties from making unauthorised use of an identical or confusingly similar trade mark or business name

It is a common misconception that the registration of a company name automatically provides some sort of protection to deter others from making use of an identical or similar trade mark.  The Companies and Intellectual Property Commission (CIPC) has 2 different registers for companies and intellectual property.  Therefore, should one register a company on CIPC’s companies registry, the name of such company does not automatically get added to the trade marks registry.  Failure to register the brand as a trade mark on the trade marks registry makes the company’s brand extremely vulnerable to unauthorised use by third parties.  By registering the trade mark the proprietor of such trade mark can bar others from not only making use of confusingly similar marks but also confusingly similar company names, trade names and domain names.

  1. Registration serves as a defence to any infringement action brought by a proprietor of an earlier registered trade mark

The presumption exists that if a trade mark has been registered it does not infringe on any trade marks currently registered on the trade marks register.

  1. Registration holds a financial and/or tax benefit in certain instances

As noted above, in the majority of instances the greater part of a business’ total value resides in its non-tangible assets.  Should a business’ trade marks therefore have immense value, the proprietor may add the trade mark to the business’ financial statements.  Should the proprietor not register the trade mark, the proposed value of such trade mark may be disputed by the relevant authorities (eg. SARS).

  1. Hypothecation and security:

A registered trade mark can be hypothecated as security for the fulfilment of an obligation.

  1. Trade marks as intangible assets and the assignment thereof

By registering a trade mark, the goodwill attached to such trade mark can be transferred much the same way as any other asset owned by a person or company.  Without registering the trade mark, one would need to transfer the entire business as a going concern to transfer such goodwill.

  1. Licensing of a trade mark

A registered trade mark may be licensed to a third party, provided such license is recorded on the trade marks register, providing the licensee with the right to use the trade mark and to sue for infringement.

  1. The proprietor is granted the right to use the ® symbol

As soon as a trade mark has been successfully registered the proprietor of such trade mark is entitled to make use of the ® symbol in respect of the goods and/or services such trade mark has been registered.

  1. Applications in foreign jurisdictions

Trade mark registrations are territorial.  Therefore, a registration of a trade mark in the Republic of South Africa will only enjoy the benefits of a registered trade mark within the borders of the Republic of South Africa.  However, the application for registration of a trade mark filed within the Republic of South Africa may form the basis of an application filed outside the borders of the Republic of South Africa.  By claiming priority on the application filed within the Republic of South Africa, one may be able to request an earlier date of filing in the foreign territory.

In light of the above it is apparent that it is not only of paramount importance to apply for the registration of a trade mark as soon as possible to adequately protect the brand of the company, but it also provides numerous benefits to the proprietor of such registered trade mark.

Should you wish to know more or have any intellectual property related queries, do not hesitate to contact our IT&IP Department on it&ip@dkvg.co.za or Tel: 021 914 4020 and ask for Chris Brand or Gerrie van Gaalen.