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Why should small businesses trademark their intellectual property?

Why should small businesses trademark their intellectual property?

Why should small businesses trademark their intellectual property?

Intellectual property or IP for short is essentially one of the foundation assets of a small business. It’s a legal term relating to the unique ideas, designs, brands and concepts of a business and allows them to be registered to stop them from being used or copied by others.

Trademarking your intellectual property – such as logos, brand styles and colours, is a crucial step in securing your business’s success and preventing others from profiting from your hard work.

Just think about how well-kept the secret of KFC’s 13 special herbs and spices in their recipe is! It’s our intellectual property that makes our business different from the competition.

In this article, we’ll explore why small businesses should trademark their intellectual property and provide examples of trademark infringement cases that have affected small businesses in the UK.

1. Protect your ideas products and brand identity 

Your business is made up of lots of different components from the visual brand – logos, brand styling, fonts and colours to the services and products you sell. 

The first stop for many small businesses is trademarking their brand identity – after all, it’s these elements when put together that help consumers identify your business and distinguish it from your competitors. Think of the iconic golden arches of Mcdonalds’ or the Apple logo with a bite out of it, or the Nike swoosh, even colours can be synonymous with a brand – Utilities Warehouse and the purple pig go hand in hand.

Passing off is the term used where a business tries to deceive customers that they are buying products or services from your business and it’s really common – from fake designer products to cloned websites by fraudsters. 

Fancy a little more reading on why Aldi might get away with very close copies of others products? Read about how Aldi and Lidl get away with brand imitation. It’s eye-opening.

2. Increasing your business’s value

Trademarking your intellectual property can really increase the value of your business, both now and in the future.

After all, a trademark is an asset that can be bought, sold or licensed, which means its a tool that can be used to generate revenue for your business.

Franchise operations license the use of the brand and systems as a business in a box for the franchisees – Mc Donalds’, KFC and Burger King are all great examples of this. 

Similarly, products can be licensed from manufacturers to sales organisations with a specific territory or demographic that they serve. Car dealerships are often licensed to sell a brand of vehicle within a specific territory.

If franchising your business is something you might consider in the future, then registering your trademarks should be on your to-do list!

3. Avoiding legal issues

Trademarks pose a two-edged sword for small business owners, creating your own, and ensuring they are unique and recognisable is really important. It helps prevent you from infringing the copyright and trademarks of other brands. This will involve research by an IP lawyer or trademark specialist during the brand creation stages of your business.

A well-researched brand idea can be easy to trademark and potentially prevent costly legal disputes if others thing you are treading on their toes – just look at the examples below.

We’ve also prepared a few examples of how others might use your brand identity without permission, and how you might need to be prepared to defend it legally!

Six great examples of trademark infringements and how they affected small businesses in the UK. 

The Sausage Man

In 2021, The Sausage Man, a small UK-based business that sells German sausages, had to take legal action against Lidl after the supermarket chain used a similar logo to theirs. The Sausage Man’s logo featured a cartoon sausage with arms and legs, while Lidl’s logo featured a similar cartoon sausage without arms and legs. The Sausage Man argued that Lidl’s logo was too similar to theirs and could cause confusion among consumers. The case was settled out of court, with Lidl agreeing to stop using a similar logo.

Doughnut Time

In 2018, Doughnut Time, a small doughnut chain in the UK, had to close several of its stores after losing a trademark infringement case against a larger competitor, Krispy Kreme. Krispy Kreme argued that Doughnut Time’s branding was too similar to theirs, and the court agreed, ordering Doughnut Time to pay damages and legal costs. The case highlights the importance of ensuring that your branding is unique and doesn’t infringe on the intellectual property of others.

Oatly

In 2021, Swedish vegan milk brand Oatly faced a trademark infringement case from Glebe Farm Foods, a UK-based farm that produces oat milk. Glebe Farm Foods argued that Oatly’s branding was too similar to theirs, and could cause confusion among consumers. However, the case was dismissed by the UK’s Intellectual Property Office, which found that the two brands’ logos were sufficiently different.

BrewDog vs. Elvis Presley Enterprises

In 2018, Scottish craft beer company BrewDog was forced to change the name of its Elvis Juice beer after a legal battle with Elvis Presley Enterprises. The US-based company claimed that the name infringed on the trademark of the late singer Elvis Presley. Despite BrewDog’s argument that the name was a reference to the grapefruit flavour of the beer, the court ruled in favour of Elvis Presley Enterprises. The legal battle cost BrewDog tens of thousands of pounds in legal fees and lost sales.

Ella’s Kitchen vs. Aldi

In 2019, organic baby food company Ella’s Kitchen sued Aldi for trademark infringement. Ella’s Kitchen claimed that Aldi’s own-brand “Mamia” baby food packaging was too similar to its own packaging, which featured a yellow background and illustrations of fruit and vegetables. The case was settled out of court, with Aldi agreeing to change the packaging of its “Mamia” range.

Fancy a little more reading on why Aldi might get away with very close copies of others products? Read about how Aldi and Lidl get away with brand imitation. It’s eye-opening.

Tasty vs. Deliveroo

In 2021, restaurant chain Tasty sued food delivery company Deliveroo for trademark infringement. Tasty claimed that Deliveroo had created a website called “tastyclub.co.uk” which used a logo similar to Tasty’s own logo, which features the word “Tasty” in a stylized font. Tasty argued that this was an attempt to mislead customers into thinking the two companies were affiliated. Deliveroo denied the claim, but eventually agreed to change the name of the website to avoid further legal action.

In the courts last month….

trademark

Tesco and Lidl have been in the courts arguing over the similarity of the Lidl logo and the yellow circle used by Tesco in their Clubcard promotions….. whilst everyone thought it wouldn’t stand a chance at court, Lidl won.

You can read more here.

In conclusion, it’s clear to see that trademarking your intellectual property, such as logos, brand styles and colours is essential to protect your business’s identity. It will also increase the value of your business and help prevent future legal issues.

The six examples above show how small businesses have been affected by their trademarks being infringed, but also the fight you might need to be prepared for to defend your IP too.

It also provides a great set of reasons to ensure you really do your homework when starting out creating a brand, to ensure your business is unique and doesn’t infringe the rights and intellectual property of others. This is where working with an Intellectual Property Lawyer or Brand Specialist can really be money well spent.

Picture of Jamie Morgan

Jamie Morgan

Jamie Morgan is a business coach and marketing specialist who works with businesses to help them crack the rhythmic acquisition of customers. His implementation of the Entrepreneurs Marketing & Sales System into businesses boosts revenue and markedly improves profit.

Jamie is an EC Certified Business Coach, Fellow of the Institute of Enterprise and Entrepreneurs and a Member of the Chartered Institute of Marketing.