Because goodwill is its name and everything that its name encompasses, it must be adequately protected against infringement. Consider this: a businessman in his local area (Area A) finds a home renovation company. He develops and begins selling a tool of his own design, which he names ‘Benson’. The product is a hit in the immediate area and its popularity is increasing along with the trade name.
A businessman from the next town (Area B) visits his area hardware store and buys the ‘Benson’, deciding that he could make a profit on another man’s idea. He opens his own renovation business in the next town over and sells his own version of the ‘Benson’.
And yet, since he did not receive permission to reproduce the ‘Benson’, he was unaware of the original method of manufacture, and his own ‘Benson’ is a failure. His store closes and several of his customers sue him because they suffered injuries from using his product.
Certainly, the entrepreneur was doomed, since he stole the idea for the invention in the first place. In fact, this is common in small businesses all over the world. However, his own failed business sends ripples of repercussions to the entrepreneur in his area. These repercussions include:
- Consumers from Area B traveling to Area A will not buy a ‘Benson’ due to its poor reputation.
- Consumers in Area B do not realize that the two companies are not, in fact, affiliated, and therefore refuse to buy a ‘Benson’.
- The entrepreneur from Area A cannot expand his business to Area B because his product already has an undeserved bad reputation there.
- The Area B Health and Safety department decides to visit the Area A business to ensure that the product does not have the same flaws as the defective product.
- The media picks up the stories of aggrieved consumers and televises them: potential consumers condemn the Area A product.
- The business in Area A is at risk of closing due to the lack of business it receives due to an undeserved bad reputation.
Any of these situations could arise from the fact that the Area A businessman did not protect his goodwill. The businessman could have registered his trade name and the name of the product to gain the power to protect himself from infringement by the dishonest businessman. If the entrepreneur were to attempt to open his own store and sell the same product without explicit permission, the Area A entrepreneur would have the right to take legal action to protect his good name. Therefore, his goodwill would be protected.
The government is not responsible for the preservation and protection of your business name. This is, in fact, your own responsibility as a business owner. Just because you own a business with a unique name doesn’t mean you’re protected from infringement. The best way to protect your business, product, service or brand name is to register it as a trademark.
Too many companies refuse to protect their goodwill against infringement: this is because business owners believe that registering and protecting trademarks is too costly for them. Consider this: Trademark registration protects your business nationwide and can include your business name, designs, logos, slogans and packaging, as well as other material that is unique to your business. When you own a trademark, you are protected from infringement for ten years and then indefinitely with renewals every decade.
Trademark registration can be simplified with the consultation of an experienced trademark attorney. Your lawyer can help you in the process of filling out your applications, as well as fight any legal action taken by your competition. You can even apply for international registration if you are an exporting company.
Once your trademark has been registered, you basically get a monopoly on that name within your country. Trademark protection is simple: when your trademark is registered, you can prevent other companies from registering similar names that could be confused with yours. You can also take immediate legal action in case another party infringes your trademark rights.