Winky Wu:
Winky Designs is actually still not trademarked but we are technically in the process of getting the application started. People will always tell you that you should get a trademark done but I think it's overhyped, it's like someone telling you that you need to buy life insurance at the age of 10. In both cases, the reasons why it's not very practical is the same 1) the costs outweigh the benefits especially when you are so young and 2) your risk of negative consequences are actually quite low.
- Trademarks are expensive:
To trademark in the US, the application fee is $325 per class (for
example, scarves, watches and handbags are in 3 different classes, so if I
was to trademark our name across all the product categories that we are
in, it would cost us $975 in application fees plus legal fees of hiring
lawyers or a trademark company to help us do the research and fill out the
applications). When I first started the company I had limited
funds, and I just decided to use my resources in more productive ways.
According to the United States’ Small Business Administration (SBA),
approximately 90% of all small enterprises fail within the first two years
of operation, so when you are starting out, you don't even know if you're
going to make it long enough to have anything worth trademarking. So
why not wait and see how the business goes before spending that money?
- Trademarks are limited by
country:
This USPTO trademark protects you in the USA only, and so if you want to
protect your mark internationally you need to pay additional certification
fees and international application fees are also very expensive (e.g. $200
per class per country). Winky Designs sells in 3 classes across 25
different countries, and so in order to "truly" protect
ourselves we would really have to break our bank! It's a tough
decision, you just need to balance out the costs vs. benefits of trademark
protection and see how much you can afford.
- Trademarks take a really
long time: Before even doing an application,
you need to do some research to see if there are any conflicting marks out
there. Then you need to do the application and submit it. The total
time for an application to be processed may be anywhere from almost a year
to several years, depending on the basis for filing and the legal issues
that may arise in the examination of the application. While your
application is being processed you have no protection (so if your idea
takes off, someone can copy you before your trademark even comes through).
I think you might be able to retroactively take action but by then it
might be too late.
- Even if you had trademark
protection, would you actually take action against an infringing company? We
all know that trademark registration is supposed to "protect"
you, but if people want to copy you, they will do so anyway (look at all
the fake designer products out there!). The trademark just gives you
a good case to take legal action to stop the copycats, but you still need
to hire lawyers, go through the courts etc. which would cost a LOT of money
and the process could drag out for years. If LV and Gucci (with tons of
money) can't protect themselves, how will I be able to afford it as a
small startup business? Realistically, IF someone were to copy the
WD mark, the most I could do is send out a threatening legal letter and if
they didn't stop, I'm not sure that I would actually take legal action
unless WD was really taking off and we had some financial
backing. I would probably be better off spending my time &
money to come out with fresh new designs, differentiating on quality and
encouraging buyers to buy the real deal (rather than taking legal action).
2) Your risks are actually quite low:
- Common-law
protection: As long as you are actively using
your mark in "commerce" (meaning that you are selling the
goods/services with your mark on it), you are actually protected through
common-law in most countries. All you have to do is show that you
were first to use the mark within a geographical area (amongst other
factors) and that consumers associate that distinctive mark with your
company - that's why we put "TM" after our logo (you put R with
a circle around it once you are actually registered). Since Winky Designs
sells everywhere and is protected through common law in so many countries,
if someone did infringe on our trademark, we could legally take action
without an actual trademark registration. Since you get some
"free" protection anyway, I decided I didn't need to pay for
trademark registration yet until I got bigger.
- Who wants to copy you
anyway? As
a new brand, you don't actually have enough brand value/recognition to be
worth copying. If you have a great idea or design, it is more likely
that people will copy the design/idea (which is protected by a patent),
rather than copying your name/logo (which is protected by a trademark).
I always joke that if my brand got big enough to be worth
copying, then that's when I'll really know that we've "made it"
and it's a good problem to have.
- Infringement on someone
else's trademark: There is also risks that your mark
is infringing on someone else's registered mark and they might take action
against you (which is actually a real risk). In most cases, they will send
you a C&D (Cease & Desist) to ask you to stop using their mark or
they will take further action. At this point, you are likely to
stop, rebrand yourself, or sell the goods in another country where they
don't have protection. If they decided to litigate, the most they
can go after is the profits you made on your sales (which as a new
business, may not be very much ...so it might not be worthwhile for the
opposing party to take action against you since their legal fees is likely
higher than what they could get from suing you).
