In some countries, no restrictions are preventing the use of unregistered trademarks. For example, in the Russian Civil Code, anyone can create their trademark without registering it first. However, this does not mean that an unregistered trademark is completely free to use as you please because sometimes other people have rights to a specific name. If you do not follow these rules, your “trademark” could be taken away from you or turned into something else by someone who has more power than you.
The term “unregistered” means that these trademarks exist but are not legally registered, and no protection is offered for them – yet!
Trademark registration is necessary for any company that avoids economic risks associated with an unregistered trademark.
1. Unfair competition
The absence of exclusive rights provides an opportunity for competitors who “parasitize” on the popularity and business reputation built up around the brand to enter the market. As a result, a bona fide manufacturer suffers losses associated with lost sales profits and a decline in consumer confidence as competitors may produce inferior goods.
2. Unfair registration of a trademark
Another person may obtain exclusive rights in the designation, and a bona fide manufacturer may lose the ability to use the disputed mark. It is common in the practice of law for such registration to be made for the very purpose of blocking the business of others.
3. Patent trolling
In the past, companies registered trademarks to protect themselves from imitators and fraudsters. Today, however, this practice has been reversed, as many of these registrations are now used for nefarious purposes by people who have no intention of using them commercially. Trademarks are accumulated to make claims or sell the rights to bona fide and successful entrepreneurs who did not seek a certificate promptly. These companies carefully monitor the infringement of their rights, and when the use of a disputed mark reaches a significant volume, they make claims and receive substantial compensation.
4. Specifying an unregistered trademark in someone else's domain name
Addressing the global internet is an important aspect of leveraging a brand. Over time, consumers will begin to search for information about your product. If they visit a website with similar products or domains as yours but different prices, you may miss out on customers making the wrong choice.
It is unintentionally using an unregistered trademark that can’t be registered. Trademark infringement is a widespread occurrence for many businesses who do not understand the legal implications of trademark rights and how to protect themselves.
A business or individual may unknowingly use unregistrable trademarks that are generic, offensive, or descriptive and cannot be registered to represent your business properly. Therefore, when creating brand names, it is extremely important to ensure that they only deal with companies that have proper registration so that there is no confusion over ownership and customer satisfaction remains high at all times.
5. Impossibility to gain financial benefit
When a company or business owner uses unregistered marks, it bears the risk of not deriving any financial benefit from selling the unregistered mark separate from its business.
6. Enforcement to secure business rights
In terms of enforcement, it isn’t easy to secure your rights with an unregistered trademark. For example, suppose an unfair competitor steals your unregistered mark and uses it to identify their goods or has created a mark similar to your unregistered mark. In that case, it will be difficult for you to provide evidence and gather proof instead of whether the mark was registered. You will need to prove that using an unregistered mark has gained some notoriety through sales, marketing strategies, and geographic scaling. Even if you have provided evidence of awareness of an unregistered mark, you must remember that third parties can easily challenge it.
7. Inability to manage exclusive rights in the public interest
If the trademark is unregistered, the law cannot help preventing illegal acts by third parties against unregistered marks and refer the mark by such acts as including the unregistered mark in a trademark compendium or dictionaries or use in newspaper articles or books or other publications by those who are not competitors of the mark. Some legislations allow trademark owners to require third parties to use the mark properly.
Although the law in many countries does not require mandatory trademark registration, leaving this matter to the discretion of business owners, you could find yourself in legal trouble down the road if someone or some other business uses the same name, symbol, logo on products, or services as your business. So if you want to be legally protected as a business, why not register a trademark? It’s better to go for a trademark than to take the risk.