We understand that names are used to identify people, places, countries and things. We know that although the Earth has over 7 billion people and almost 200 countries, names enable us to identify individuals amongst the population, associate certain characteristics and meaning to seemingly similar people, places, countries and things.
Names of people, places, countries and things are protected by registration legally through birth certificates, title deeds and other legal documents.
Similarly, names of businesses help identify and give meaning to them. Names of businesses can be protected legally by the use of trademarks. Trademarks are defined as devices that are used to distinguish goods or services of one enterprise from another enterprise.
It is the legal right to make use of a name, word, number, logo or slogan, and recently smell and sound or combination thereof to differentiate your product or service from that of others in adjacent industries and just in general.
Not all devices are eligible for protection, the criteria that renders a device as eligible are functionality in distinguishing the product or service –simply, does this device identify the product or service as unique. Secondly, it should not be confusingly similar or identical to existing trademarks and lastly it should not be offensive, immoral or derogatory. Trademarks are protected for limited durations however; they are subject to perpetual renewal.
The limitation in protection allows for deregistration or the amendment of the name in processes of rebranding etc. Some jurisdictions have durations of 5 years others 7 years, however yet again it can be renewed in perpetuity.
The protection of a business name using a trademark is very useful in executing an effective branding and marketing strategy, which is fundamental in building brand equity. One could say the registration of a trademark is one of the first steps in implementing a robust branding and marketing strategy.
Brand equity is the term given to the value of a business name and all that is associated with the business i.e. the value of the experience of the brand. Brand value is typically seen as how the consumer views the specific product or service of one company over another, simply put, do consumers choose your product or service over other enterprises offering the same thing. All to often, businesses have a one-dimensional understanding of branding and marketing.
Although different, they do pivot around the same point, which is to communicate the essence of the business to its consumer base to enable a valuable reputation for the business. A valuable reputation is experienced in the loyalty and commitment consumers have to that product or service, this ultimately affects the bottom line of the business. In order to experience high profits and maintain overall stellar operations, a business has to be valued by its consumer base. The legal right to use a particular distinguishing mark for your business greatly assists the process of creating a business that is valued by consumers. However, it is important to note that branding and marketing strategies have several other elements to it, for instance an equally critical element of the strategies is the characteristics of quality and uniqueness of the actual product or service.
The quality and uniqueness of the product or service ultimately bears reference to the name- the characteristics associated with the product or service will be encapsulated in the name. Beyond the name, it is important to assess the quality, uniqueness and other relevant characteristics of the product or service. Besides the bottom line of a business, brand equity is important in influencing the overall value of the total assets of the business. Brand equity is a business asset that does not only speak to the value of the brand, but it globally speaks to the value of the overall business assets. This becomes important in assessing goodwill. Goodwill is an asset that is easy to explain as non-physical component of the business but difficult to describe what it composes of. Part of the composition of goodwill is a name and reputation.
Goodwill is one of the most common intangible assets mentioned on the financial books of a business. Goodwill becomes critical in businesses listed on the stock exchange as it influences share prices, it is important in strategizing the business operations such as financial forecasts and decisions on expansion in possible mergers or acquisitions etc.
Bringing it home to Namibia, we see several large corporations already making use of adequate branding and marketing strategies. Companies like NamBreweries and NamDairies have made strides in securing their legal rights to their various product names and creating holistic branding and marketing strategies which have been reflected on their financials as intangible assets, goodwill and additionally defines the total value of the respective business.
The encouragement to entrepreneurs, small and medium enterprises is that investing in securing legal rights over your business name is worth it. Securing your business name in a trademark will enable the precluding of third parties from utilizing your name and harming the business reputation.
It will also equip the effective rolling out of your brand worldwide. Register your trademark to start your journey to a successful brand.
*Seno Namwandi is a Research Assistant at the International University of Management (IUM), she is interested in the convergence between Science, Business and Law i.e. Intellectual Property (IP).