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A trademark is a distinctive sign, which identifies certain goods or services as those produced or provided by a specific person or enterprise. Its origin dates back to ancient times, when craftsmen reproduced their signatures, or "marks" on their artistic or utilitarian products. Over the years these marks evolved into today's system of trademark registration and protection. The system helps consumers identify and purchase a product or service because its nature and quality, indicated by its unique trademark, meets their needs.
For example, “Niketha Multimedia ” is a trademark that identifies goods (computers and computer related objects). “DEVA VIDYA ” is a trademark that relates to services (health, wellness and tourism related services).
Functions of Trademarks
Trademarks may perform different functions. In particular they :
- Help consumers identify and distinguish products or services;
- Enable companies to differentiate between their products;
- Are a marketing tool and the basis for building a brand image and reputation.
- May be licensed and provide a direct source of revenue through royalties;
- Are a crucial component of business assets.
- Encourage companies to invest in maintaining or improving quality products; and
- May be useful for obtaining finance.
The basic rationale for protecting trademarks, whether through registration or not, is twofold. First, it provides business people with a remedy against unfair practices of competitors, which aim at causing confusion in the consumers’ minds by leading them to believe that they are acquiring the goods or services of the legitimate owner of the trademark, whereas in fact they are acquiring an imitated product, which furthermore
may be of lesser quality. The legitimate owner may hence suffer from loss of potential customers, as well as harm to his own reputation.
The second rationale flows from the first, namely to protect consumers from those unfair and misleading business practices.
In addition to those two arguments, a further one is gaining more and more prominence. This is that a trademark is often the only tangible asset that represents the investments made in the building of a brand. Where, for example, a business is sold, or companies merge, the question of brand evaluation becomes an important issue. The value of companies may depend to a large extent on the value of their trademarks.
