"Hey, we should trademark our new feature so our competitors can't copy it - let's put a (TM) next to it." This post is for you if you've heard or said something like this, as I will unpackage some questions to ask that may help you decide when a trademark makes sense for your business.
Let's start with a level set. A trademark is a symbol, word, phrase, or logo intended to identify and distinguish a company's product or services from other companies. It can be a valuable asset to bolster brand recognition, build brand perception, and establish a loyal customer base. They are part of a legal process based on a framework that knows consumers expect similar features, values, quality, and other functions based on the name or mark of a product. That being said, they are part of a legal process to enable companies to protect these assets and are thus complex to create and maintain.
Therefore, here are a few questions you should use to evaluate if pursuing a trademark is something you are interested in:
1) Can You Afford the Legal Costs?
Creating a trademark can seem like a simple process of submitting an application but maintaining and protecting your trademarks takes legal know-how. Suppose you don't already have the in-house knowledge and can't afford to hire or use outside legal expertise in trademarks. In that case, you may build a business on a brand, and your competitors sweep in and feed off your hard work.
If the answer is No, then reevaluate your budget or reconsider your need for a trademark. If Yes, move on.
2) Do you plan to provide your offering for the long term?
Brand equity is investing over time in a brand to build its value. Trademarks are a part of your brand, and they will take consistency over time to build the equity required to establish the trademark as valuable in customers' eyes. If you plan only to use a trademark for a few years before an innovation or offering supersedes it, it may not be worth the investment.
If the answer is No, consider investing time and money into trademarking your future innovation. If Yes, move on.
3) Is your industry highly competitive?
The primary purpose of a trademark is to avoid consumer confusion, and confusion can only happen if there are options - hence competition. Zero competition is rare but can exist, especially in niche industries.
If the answer is No, consider if this could change in the future if you can demonstrate value to your customers. If it is still No, consider investing time and energy elsewhere.
4) Will Customers View Your Potential Trademark as Unique and Different?
The first three questions are straightforward, but this one is where many companies stall out. When a business spends time and energy on creating something they view as new and innovative, there is an instinctual desire to name it. But, if you set pride aside, the real question is whether your customers will view what you created as unique and valuable.
A thought experiment to test this is to think of yourself as a customer who is unfamiliar with your company and ask yourself:
Would this person view what I am offering as unique in our industry?
If yes, would this person see high value in my offering?
You can plot out these two questions in a four-square and evaluate whether a trademark could make sense for your business:
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