When a founding team gets together and prepares to launch a new startup, it’s easy to move too quickly and make debilitating mistakes. One such mistake involves naming and branding the company. You can’t simply decide you like the way a name sounds and end the discussion. Rather, you need to cautiously consider trademarking, branding, and the legalities that come along with each of these areas.
Importance of brand protection.
Does the product work? Do we have enough capital to proceed with the next step? Who should we be targeting? This is just a sampling of the questions founding teams ask every day. While each of these issues is important and needs to be thoroughly discussed, it’s a mistake to ignore the topic of trademarking and brand protection.
In the future, it’s the creation of a trustworthy brand that’s going to encourage long-term success and profitability. Forgetting this will lead to a weak foundation that can easily be exposed down the road.
“Naming is the most important element of a brand’s value proposition,'' says Thomas Dawson of PULL, a leading branding agency. “It’s the first perception by an audience about who the brand is and what the brand represents. From day one, a brand name requires and deserves full creative consideration and legal protection.”
Those are the two words that startups fear the most: “legal protection.” While they’re certainly scary, they’re exponentially more frightening when ignored. When developing a brand and trademark for your startup, you need to consider protection and legality.
“I tell my clients all the time that they can’t discount the importance of brand protection,” says Steven Buchwald of Buchwald & Associates. “Brainstorming with an IP lawyer during the selection process is both valuable and necessary. If you do it right the first time, you won’t have to worry about it in the future.”
The nitty gritty of trademarking.
Understanding how to best protect your brand through trademarking requires a careful assessment of what trademarking entails. A trademark is essentially a unique word, name, symbol, device or combination of these factors that’s used to distinguish and identify one company and their products/services from another. For example, the classic Coca-Cola logo, script and colors set its soda apart from, say, Pepsi and other brands, despite the fact that they all taste relatively similar.
A trademark allows companies to protect their proprietary products and prevent competitors from using or misusing the same products and services. Furthermore, trademarks help a company instill brand loyalty and control customer perceptions. So, what makes a good trademark? Well, that’s up for debate. There are generally considered to be five types of brand names when it comes to trademarking. They are as follows:
1. Generic. The first category refers to generic brand names that identify an entire group or class of products. These are the weakest names and can’t be trademarked. However, you’ll still see them on products. Words like ‘Bread,’ ‘Cold Beer,’ and ‘Auto Shop.’ You also see them on the Internet, with websites like Hotels.com or Business.com. These names are simple and easy to remember, but they can’t be legally protected because they’re far too generic. It’s legally impossible to protect these names. Doesn’t mean you can’t use them, though.
2. Descriptive. Descriptive names are a step above generic, but are still hard to protect. A descriptive brand name simply ads a descriptor or adjective in front of a generic word. Examples of descriptive names that have ultimately earned trademark protection include Holiday Inn, Pizza Hut, and Burger King. However, there are thousands of examples of brands that have non-protectable descriptive names.
3. Suggestive. Suggestive names stand a much better chance of earning legal protection. These are names like Amazon, Greyhound, or Chicken of the Sea. These names are highly correlated with something else and draw on the power of analogy. They’re more difficult to market than other types of names, but certainly easier to protect.
4. Fanciful. Fanciful names are the easiest to legally protect and trademark because they’re unique. These names are created, invented or coined by the brand itself. These are extremely popular in the tech world right now. Examples include Google, Twitter and Xerox.
5. Arbitrary. Finally, you have arbitrary names. These are brand names that may seem generic, but are actually capable of being trademarked because they’re obviously used out of context. For example, Shell (the oil company) is able to trademark the name "Shell" because it’s unrelated to seashells. Apple (the technology company) is able to trademark the name “Apple” because they aren’t in the business of selling produce.
Startup teams need to make trademarking a priority.
“When selecting a brand name, it’s critically important that founding teams don’t immediately jump to the conclusion that they need a descriptive trademark,” says Buchwald. “Fanciful or suggestive trademarks, on the other hand, are immediately protectable.”
The decision is yours. You have to develop a trademark that makes sense for your startup. Be cautious and thorough about the process. Trademarking certainly shouldn’t be an afterthought, and your business will experience stronger stability if it develops a protected, identifiable mark.