Andrew Lee, Partner

"An established brand that has been trading for a period of time will have developed what's called a goodwill. So people will through trading and customers will have developed goodwill in their business by supplying goods and services under a certain brand name. So if someone else comes into the market under the same or similar name they may be able to stop them because that goodwill might be infringed upon– it's what’s called passing off. 

Whereas a brand-new business that hasn't got going and hasn't got any customers will either have very minimal and localised goodwill (for example it might just be within London) and that might not extend or be sufficient for someone in say Manchester or Leeds or Newcastle. Whereas if they got a registration at the start, they would be able to do that. And that’s the beauty of a trademark registration is that there’s no need within the first 5 years to say you’ve used it. It provides an absolute right within the territory in which it’s registered to prevent others from using the same or similar name. The advantage of paying the fee of a few hundred pounds at the start and giving you that protection across the whole territory, as opposed to without a registration, having to try and rely on a different argument of ‘well we have got customers, and we've got customers from Manchester and we advertise on the Internet so the goodwill is wider’ - that can cost a lot of money to run in court.

A registration is much more powerful to prevent others coming in your space, and that has a lot of advantages. Firstly, it helps you to eliminate the market and keep it for yourself. Secondly, if you were ever to sell the business,  having an IP right it's a property right - it can be mortgaged, licensed, sold, like any other piece of property -  it adds value to the business. Particularly with business due diligence on sale, one of the main areas of debate is the IP rights. The more IP rights, the stronger the portfolio and the better price you'll get. The less, or the more lower rights are the warranties, you're going to have to give to people potentially indemnities as well. 

So when you look at it in the round, and you start on the basics of what a brand or a trademark does, which every single person whether they know about IP or not uses every single day to get what they want, to looking to well we’ve got an ex of planning 15 years of this business. When you start at that basic point, the same sort of principal applies the benefits of thinking early, taking proper advice, and understanding what the options are.”