Trademark registration: a necessity for your business

Starting any business, be it a small café or, in other words, a large-scale IT-company, you undoubtedly put your heart, time, and, of course, money into it. You create a unique product or service, come up with a name, develop a logo And here, at this seemingly creative stage, there is an important legal aspect – registration of trade mark. This is not just a formality that can be postponed “for later”, this is the foundation on which will be built reputation and, there, no less, the protection of your business.

Many aspiring entrepreneurs mistakenly believe that registration of TM – this is something optional, concerning only large corporations. But in fact, trademark registration is like an insurance policy for your business regardless of its size. It protects your unique designations (name, logo, slogan, etc.) from being copied by competitors, gives you the exclusive right to use them, and serves as a powerful tool in the fight for your place in the market. In other words, without a registered trade mark, all your branding you’ve invested in could be at risk. And these are not empty words, but the realities of today’s business environment, where competition is sometimes quite fierce.

I. What is a trade mark and what is it for?

Before we delve into the intricacies of registration and the advantages it offers, let’s understand the concept of “trade mark” itself. It is, in other words, like the rules of the road: before you get behind the wheel, you need to learn the basics. Understanding what a trade mark is will help you recognise its value and the need to protect it. In this chapter, we will clearly define what a trade mark is from a legal perspective and what functions it fulfils, from distinguishing your goods and services to, for example, ensuring their quality and protecting them from unfair competitors.

Subsection 1.1: Definition of TM

What is a trademark in legal terms? In simple terms, it is a unique designation that helps consumers distinguish your goods or services from those of other companies. It can be a word, phrase, logo, image, sound, colour, shape of packaging or any combination of these. In other words, anything that helps to identify your product or service in the market and associate it with your company.

Now let’s turn to a more official definition. According to the current legislation of Ukraine, namely the Law of Ukraine “On Protection of Rights to Marks for Goods and Services”, trademark (or a mark for goods and services) is a designation by which the goods and services of some persons are distinguished from those of others.

It is important to understand that a trade mark is not just a pretty picture or apt name. It is, for example, a legal instrument that gives you certain rights and protection. And, like any tool, it requires proper registration, i.e. registration. It is the registered trade mark that becomes your asset, which can be defended in court, transferred for use to others (for example, under a licence agreement) or used as collateral.

Subsection 1.2: Functions of a TM

We’ve established what a trademarkis, now let’s understand what it is, in other words, for. What functions does it fulfil in business? Actually, there are several, and all of them are important for the successful development of a company.

• Distinctive (identification) function: This is probably the most obvious function of a brand. It allows consumers to quickly and easily distinguish your goods or services from competitors’ offerings. For example, when you see a logo in the shape of a bitten apple, you immediately realise that it’s an Apple product. This is the distinguishing function in action.
• Guarantee function:   A trade mark  in other words, serves as a kind of quality mark. Consumers, seeing a familiar logo, expect to receive a product or service of a certain level of quality that they have, for example, experienced before. This creates trust in the brand and encourages repeat purchases.
• Advertising function:  Brand name is a powerful advertising and promotional tool. It helps to make your brand recognisable, memorable and such as attractive to potential customers. Logo, slogan, corporate identity are all brand elements that work to promote your business.
• Protective function: This is perhaps the most important function from a legal perspective. Registering a trade mark gives you the exclusive right to use it in a particular area of business. This means that no one else can use a similar designation for similar goods or services without your authorisation. If your rights are infringed, you can go to court and demand that the unlawful use of your trademarkbe stopped and that you be compensated for damages.

So, trademark fulfils a whole set of functions that are aimed at protecting and promoting your business. It is not just a pretty wrapper but, in other words, a strategic asset that can bring significant benefits to your company.

II. Advantages of registering a TM for business

So, we have dealt with what a trade mark is and what functions it fulfils. Now, in other words, it’s time to talk about why registering a TM is so important for any business, regardless of its size or field of activity. Why is it worth spending time and money on this process? What specific advantages does the owner of a registered trade mark receive? In this section we will look in detail at all the advantages of registering a TM, from legal protection from competitors to, for example, the possibility of expanding a business through franchising.

Subsection 2.1: Legal protection against competitors

One of the most important advantages of trademark registration is undoubtedly  brand protection from unscrupulous competitors. Imagine the situation: you are successfully developing your business, investing in advertising, creating a positive image … And suddenly a company appears that starts using a similar name or logo, for example, to promote its goods or services. This can mislead consumers and damage your reputation, in other words, “steal” some of your customers.

What to do in such a situation? If you have a registered trademark, you have a powerful legal tool to protect your rights. You can:

• Prohibit a competitor from using a similar designation: Registering a TM gives you the exclusive right to use that designation in a particular field of activity. This means that you can prohibit others from using not only an identical, but also a confusingly similar designation for similar goods or services.
• Go to court: If a competitor does not respond to your demands, you can go to court and demand to stop the infringement of your rights, as well as compensation for damages. Judicial practice in Ukraine, for example, shows that owners of registered trade marks have a much better chance of success in such cases.
• Appeal to the Antimonopoly Committee of Ukraine: The use of a similar designation may be recognised as an act of unfair competition, which entails imposing a fine on the offender.

In other words, registration of a trade mark is like a shield that protects your brand from the attacks of unfair competitors. It gives you the confidence that your investment in business development will not be in vain, and that you will be able to protect your reputation and customers.

For more information on trademark protection, see our article: “How to protect your trademark from competitors: legal tips”.

Subsection 2.2: Prevention of unfair competition

Registering a trade mark is not only a defence against direct copying of your brand, but, in other words, an effective tool to prevent various manifestations of unfair competition. What is meant by this?

Unfair competition is any action in business activities that goes against regulations, trade or other fair practices and causes or is likely to cause harm to your business. This can manifest itself in various forms, such as:

• Imitating the appearance of a product: Copying packaging design, product shape, brand colours, etc., which can mislead consumers about the manufacturer.
• Using similar names or slogans: Intentionally creating signs that are associated with your brand in order to lure customers.
• Spreading false information about your company or products: Discrediting your brand by spreading false information.
• Unlawful use of trade secrets: Obtaining and using confidential information about your business without your authorisation.

Registering a trade mark makes life much more difficult for unscrupulous competitors. It gives you legal grounds to fight such actions, in other words, it allows you to apply to the Antimonopoly Committee of Ukraine or to the court and demand to stop the infringement and reimbursement of losses. Without TM registration, it is much more difficult to prove the fact of unfair competition, and, for example, the chances of successfully defending your rights are significantly reduced.

Subsection 2.3: Increasing brand awareness

A registered trade mark is not just a legal protection, it is, in other words, a powerful marketing tool that helps increase brand awareness. What does this mean for your business?

• Easier identification: A registered TM (logo, name, slogan) helps consumers quickly and easily identify your goods or services among the many other offerings in the marketplace. It becomes a visual anchor that, for example, sticks in the minds of consumers.
• Building a positive image: A unique and well-designed brand name creates positive associations with your company, builds trust in your brand and shapes its image. It can communicate your business values, its philosophy and, in other words, its advantages over your competitors.
• More effective advertising: A registered TM makes advertising campaigns much easier. It can be used on product packaging, promotional materials, website, social media and the like. This makes the advertisement more targeted and such as memorable.
• Increased customer loyalty: A recognisable brand gives consumers a sense of trust and stability. They are more likely to return to you again and again, becoming, in other words, loyal customers.
• Empowerment: A registered TM opens up new opportunities for business development, such as entering new markets or launching new product lines or services.

So, trademark registration is an investment in your brand recognition that will surely pay off in the future. It helps to create a strong and successful brand that will stand out among competitors and attract customers.

Subsection 2.4: Increasing the value of a business

Registering a trade mark is not only about protection and promotion, it is also a real way to increase the value of a business. How does it work?

The fact is that a registered  trademark becomes an intangible assetof your company. Intangible assets are assets that have no physical form but have value to the business. These include, for example:

• Trade marks
• Patents
• Copyrights
• Licences
• Goodwill

Why do intangible assets, and in particular a trade mark, increase the value of a business?

• Valuation when selling a business: When assessing the value of a company, not only tangible assets (equipment, premises, inventory, etc.) are considered, but also intangible assets. Having a registered trademark, especially if it is recognisable and has a good reputation, can significantly increase the price for which, in other words, the business can be sold.
• Attracting investment: Investors pay attention to a company’s intangible assets because they indicate its potential and competitiveness. A registered TM can be a strong argument in your favour when, for example, attracting investment.
• Obtaining loans: Some banks may consider the presence of a registered trade mark when deciding whether to grant a loan. It can serve as an additional guarantee of the company’s solvency.
• Increased market capitalisation: For publicly listed companies, the value of a trademark can affect the share price and, in other words, the overall market capitalisation.

Thus, trademark registration is not just an expense but an investment in the future of your business. It not only protects your brand but also makes your company more attractive to investors, customers and, for example, lenders.

Section 2.5: Licensing and franchising opportunities

Registering a trade mark opens the door to such promising areas of business development as licensingand franchising. In other words, you get the opportunity not only to use your TM yourself, but also to grant this right to others on certain conditions.

What is licensing?

Licensing  is giving another person (the licensee) the right to use your trademark for a certain fee (royalty). For example, you may allow another company to produce and sell goods under your brand, receiving a percentage of sales or a fixed fee. This allows you to expand the geographical presence of your brand, increase production and sales without investing your own money in infrastructure development.

What is franchising?

Franchising is a more complex form of co-operation, when you (franchisor) grant another person (franchisee) not only the right to use your trade mark, but also, in other words, a complete package of knowledge, technologies, business model, service standards, etc. A franchisee, for example, opens his own business under your brand, following your instructions and paying you a royalty and/or entry fee. Franchising allows you to quickly scale your business to new markets and regions.

Why is TM registration necessary for licensing and franchising?

• Legal basis: A registered trade mark is a property right. You can dispose of this right, including transferring it to others. Without registration of the TM, you have no legal grounds to enter into licence or franchise agreements.
• Copy protection: A licensee or franchisee is interested in using a unique designation that will not be copied by others. TM registration provides such protection.
• Confidence of partners: Having a registered trademark shows that you are serious about your intentions and, in other words, increases the confidence of potential licensees and franchisees.
• Quality control: In a licence or franchise agreement, you can spell out the terms of use of your TM, quality requirements for goods or services, service standards and the like. This allows you to control the reputation of your brand, for example, even if other companies use it.

So, trademark registration is a prerequisite for successful business development through licensing and franchising. It opens up new horizons and allows you to make additional profits from the use of your brand.

You can learn more about the legal aspects of franchising from our article: “Franchise and trade mark: how to draw up a proper contract? “.

III. What happens if you do not register a TM?

We have looked in detail at the advantages of registering a trade mark, so to speak, we have dealt with the “carrots”. Now it’s time to talk about the “stick” – the potential risks and negative consequences that may arise if you neglect this important step. Why should you not put off registering a TM “for later”? What problems can a business that operates without a registered brand face? In this section we look at the most common risks, from losing a brand to, for example, difficulties in defending your rights in the event of a dispute.

Subsection 3.1: Risk of brand loss

One of the most serious risks associated with not registering a trade mark is actually the risk of brand loss. How can this happen? Let’s consider two of the most common scenarios:

Scenario 1: A competitor registers a similar TM.

Imagine that you successfully develop your business, use a certain name or logo, but do not register it as a trade mark. At this time, your competitor, for example, notices your success and decides to take advantage of your reputation. He applies for registration of a similar designation (or even an identical one, if you did not conduct a preliminary search) and receives a TM certificate.

What does this mean for you? It means that youcan now become an infringer of the rights of a competitor. He can prohibit you from using your designation, demand damages and, worst of all, force you to change the name or logo of your business. That is, you will have to start from scratch, so to speak, losing all your investment in promoting your existing brand.

Scenario 2: You inadvertently infringe another person’s rights.

Even if you do not face unfair competitors, you may inadvertently infringe the rights of another person who has already registered a similar TM. You may use a certain designation for years without knowing about the existence of a registered trade mark, for example, and then receive a claim from the right holder.

In such a case, you will also face lawsuits, claims for damages and a ban on the use of your designation. And, importantly, ignorance of the law does not exempt you from liability.

Both of these scenarios emphasise the importance of trademark registration. It allows you, so to speak, to “secure” the right to use a certain designation and avoid unpleasant surprises in the future. Without TM registration, your brand remains vulnerable and you risk losing it at any moment.

Subsection 3.2: Difficulties in protecting your rights

Even if you manage to avoid the worst-case scenario of losing your brand, not registering your trade mark makes it much more difficult to protect your rights in case of any disputes.

Imagine a situation: you discover that someone is using a similar designation to yours, for example, copying your packaging, imitating your advertising materials or otherwise trying to take advantage of your reputation. What can you do?

If you do not have a registered trade mark, your options for defence will be very limited. You will have to prove that:

1. You started using this designation earlier: This can be difficult, especially if you don’t have documentary evidence (e.g., dated publications, contracts with counterparties, etc.).
2. The designation is recognisable among consumers: You will need to conduct surveys, collect customer testimonies, expert evidence, which is time-consuming and costly, so to speak.
3. The competitor’s actions constitute unfair competition: You will need to prove that the competitor is deliberately trying to mislead consumers and benefit at your expense.

Even if you can gather all the necessary evidence, the legal process can drag on for years and, for example, require significant financial outlays. And even if you are successful, it will be more difficult for you to obtain compensation for damages than if you had a registered trade mark.

On the other hand, having a trade mark certificate greatly simplifies the procedure for the protection of rights. You do not need to prove the fact of using the designation and its recognisability – this, so to speak, is already confirmed by the certificate. You can promptly apply to the court or the Antimonopoly Committee of Ukraine and demand to stop infringement of your rights.

Consequently, the absence of TM registration makes your business vulnerable to any unfair actions of competitors. Protection of rights becomes a complex, lengthy and expensive process, and, for example, does not always guarantee a successful outcome.

IV. Process of TM registration in Ukraine

Convinced of the need to register a trade mark, you will certainly want to know how exactly this process takes place in Ukraine. What stages do you need to go through? How long will it take? How much does it cost? In this section we will step by step review the procedure of TM registration in Ukraine, from preliminary search to obtaining a certificate, as well as find out what costs you will have to face. For example, I would like to point out that the process is not quick and simple, and it is better to contact specialists.

Subsection 4.1: Main Stages

The process of registering a trade mark in Ukraine is, so to speak, a clearly regulated procedure, which consists of several main stages. Let’s consider them in detail:

1. Preliminary search (recommended, but not obligatory): Before filing an application for TM registration, it is recommended to conduct a preliminary search for identity and similarity. This will allow you to check whether similar designations for similar goods or services are already registered in Ukraine. The search can be carried out independently in open databases of UKRNIIVI, or, for example, contact a patent attorney.
2. Filing an application with UKRNIIVI: If the preliminary search does not reveal any obstacles to registration, an application can be filed with UKRNIIVI (Ukrainian National Office of Intellectual Property and Innovation). The application must contain:
   • An application form of the prescribed form.
   • An image of the designation you wish to register.
   • A list of goods and services for which you want to register the TM in accordance with the International Classification of Goods and Services (ICGS).
   • A document of payment of the application fee.

1. Formal Examination: After the application is submitted, UKERNOIVI carries out a formal examination, during which it checks whether all the necessary documents are present and, so to speak, whether they have been completed correctly. If the application meets all the requirements, you receive a notification to set a filing date.
2. Qualification examination (substantive examination): This is the most important stage of registration. During the qualification examination, UKRNOIVI checks the designation for compliance with the conditions for granting legal protection. The examiners analyse whether the designation is not, for example, descriptive, deceptive, not contrary to public policy and principles of morality, as well as whether it is identical or confusingly similar to previously registered TMs.
3. Publication of the details of the application in the Official Gazette: If the qualification examination is successful, the details of your application are published in the Official Gazette “Industrial Property”. Within three months from the date of publication, any person may file, so to speak, an objection to the registration of your TM.
4. Issuance of the TM certificate: If no objections have been filed within three months, or if the objections have been rejected, UKRNOIVI decides to register the TM. After paying the state fee for the issuance of the certificate, you receive a trade mark certificate, which certifies your exclusive right to use it.

The whole process of TM registration, from filing an application to obtaining a certificate, usually takes from 12 to 18 months, but it may take longer, for example, if there are difficulties at the examination stage or objections are filed.

It should be noted that the procedure of TM registration can be quite complicated for an untrained person. Therefore, many entrepreneurs turn for help to patent attorneys – specialists in the field of intellectual property, who, so to speak, have the right to represent the interests of applicants before the UKRNOIVI.

To learn more about independent TM registration, we advise you to read our article: “How to register a trade mark independently: a step-by-step guide for entrepreneurs”.

Subsection 4.2: Cost of registration

The cost of trademark registration in Ukraine, so to speak, consists of several fees:

1. Application Fee: This fee is payable upon filing an application with UKRNOIVI and depends on the number of ICCTU (International Classification of Goods and Services) classes for which you want to register the TM. The more classes, the higher the fee. For example, for each additional class, you will have to pay extra.
2. State fee for the issuance of the certificate: This fee is paid after the decision to register the TM has been taken and, so to speak, before the certificate is issued.
3. Services of a patent attorney (optional): If you decide to use the services of a patent attorney, the cost of his services will depend on the scope of work and qualifications of the specialist. For example, preliminary verification of TM, preparation and filing of documents, answering the examiner’s queries – each action has its own price.

Indicative figures (as of 2024):

• Application fee (for one class of ICTU): from 4000 UAH.
• State fee for issuance of the certificate: 85 UAH for each class of ICTU.

It is important to understand that these are only indicative figures. The exact cost of TM registration will depend on the specific situation: the number of ICTU classes, the need for a preliminary search, the involvement of a patent attorney, for example, difficulties during the examination, etc.

There are also additional costs to keep in mind:

• The cost of the accelerated registration procedure: If you need to obtain a TM certificate faster than usual, you can use the accelerated procedure, which, so to speak, involves an additional fee.
• Cost of amending the application: If during the examination it becomes necessary to amend the application (for example, to clarify the list of goods and services), there may also be an additional fee for this.

Therefore, when planning the budget for the registration of a trade mark, it is recommended to set aside a slightly higher amount than the minimum required to avoid, for example, unpleasant surprises.

To get more detailed information about the cost of TM registration, we recommend you to read our article: “Cost of trade mark registration in Ukraine: detailed calculation”.

V. International registration of TM

If your business is not limited only to the market of Ukraine and you plan, for example, to enter foreign markets, you should think about international registration of trade mark. What does it give?

International registration of TM allows you to obtain legal protection of your brand not only in Ukraine, but also in other countries of the world. This, so to speak, is especially important if you export your goods or services, plan to open branches abroad or co-operate with foreign partners.

There are several systems of international TM registration:

• The Madrid system: This is the most popular system, which allows you to obtain TM protection in more than 120 countries that are parties to the Madrid Agreement and the Madrid Protocol. You file a single international application with the World Intellectual Property Organisation (WIPO), specifying the countries in which you want protection and, for example, pay a single fee.
• European Union system: This system allows you to obtain TM protection in all EU member states by filing a single application with the European Union Intellectual Property Office (EUIPO).
• National systems: You can also register TMs directly in each country where you need protection by contacting the national patent offices. This option, so to speak, may be appropriate if you only need protection in a few countries that are not members of the Madrid or EU system.

The choice of international TM registration system depends on your specific needs and business development plans. For example, if you are planning to work in the CIS markets, the Madrid system will suit you.

The advantages of international TM registration are obvious:

• Brand protection abroad: You get the exclusive right to use your TM in the countries where it is registered and can prohibit others from using similar designations.
• Time and cost savings: Instead of filing separately in each country, you can take advantage of a simplified international registration procedure.
• Ease of management: You can manage your international registration through a single centre (WIPO or EUIPO).

International TM registration is a strategic step for companies looking to expand their business beyond Ukraine, so to speak. It provides reliable protection of your brand at the international level and opens new opportunities for growth.

For more detailed information about international TM registration, you can read our article: “International trade mark registration: opportunities for Ukrainian entrepreneurs“.

VI. TM and patent: what is the difference?

Often novice entrepreneurs confuse the concepts of “trade mark” and “patent”. These are, so to speak, different pieces of intellectual property that protect different aspects of your business. Let’s understand what the differences are.

• Trade Mark (TM): As we have already learnt, a TM is a designation that identifies your goods or services and distinguishes them from those of others. A TM protects the brand – name, logo, slogan, etc. For example, “Coca-Cola” is a trade mark that protects the name of the drink.
• Patent: A patent is a protection document that is granted for a invention, utility modelor industrial design.
  • Invention:This is a new technical solution in any field that involves an inventive step (i.e. not obvious to a person skilled in the art). For example, a new method of producing the same Coca-Cola drink (if it fulfils the criteria for patentability) can be patented as an invention.
  • Utility model: It is a new and industrially applicable technical solution that concerns the structural design of a device. For example, a new shape of a bottle for “Coca-Cola” can be patented as a utility model (if it is new and industrially applicable).
  • Industrial design: This is a new and industrially applicable appearance of an article. For example, an original label design for “Coca-Cola” can be patented as an industrial design.

Key distinctions:

In other words, a trade mark protects your brand, while a patent protects your technical or product design. The choice of what to protect depends on what you want to protect. For example, if you have a unique production technology, you need an invention patent. If you have created an original product design, you need a design patent. And if you want to protect the name or logo of your business, you need a trade mark registration.

You can learn more about the differences between a TM and a patent in the article: “Trademark and patent: what is the difference and what to choose for your business? “.

Conclusions

Summing up all of the above, we can confidently state that registration of a trade mark is not just a formality, but a necessary step for any business that strives for success and stable development. It is an investment in the future, which, so to speak, pays off many times over.

TM registration provides a number of advantages:

• Legal protection: Protects your brand from unfair competition, copying and imitation.
• Increased recognition:Helps make your brand recognisable and memorable among consumers.
• Increased business value: A trade mark becomes an intangible asset that can significantly increase the value of your company.
• Expansion opportunities: Opens pathways to licensing and franchising.
• Risk prevention: Reduces the risk of brand loss and makes it easier to protect your rights in case of disputes.

On the other hand, not registering a TM can lead to serious problems, up to, for example, losing the brand completely and having to start from scratch.

Therefore, if you are serious about your business and want to protect your investment, do not neglect to register your trade mark. Contact the experts at  Polikarpov Law Firm and we will help you through this process quickly and efficiently, ensuring reliable protection of your brand for years to come. Remember that your brand is your face, your reputation, your competitive advantage. And it deserves to be well protected!