The challenge for any marketer or producer seeking to distinguish his goods from those of others is to establish a brand name, a unique identity. The need to do this successfully is so critical that, once the goal is achieved, a business can have few tasks more important than protecting that brand name and avoiding any unauthorized use or other infringements.

What is a brand?

A brand is a trademark on a set of goods or services, a tangible marker that distinguishes the products of one business from those of another. Once registered, the owner of the trademark seeks to establish both public goodwill and a desirable image for the goods and services that are distinguished by this trademark. A trademark may consist of words (including personal names and invented words), designs, letters, characters, numerals, figurative elements or any combination thereof.

How to protect your brand?

Any business seeking to distinguish its products should register its trademark. Registration should cover every country or region to which the products bearing that trademark are exported and marketed. Businesses based in Hong Kong need to demonstrate public use of their trademark within three years of registration to avoid cancellation by the Registrar of Trade Marks.

Moreover, businesses should register all trademark-related transactions - i..e., licencing, assignment, franchising - with the Trade Marks Registry. Proper registration guarantees that such transactions are immune from third-party infringement, and gives the licensee the right to institute legal proceedings against an infringer. Starting from the date that trademark-transaction documents are registered, damages or accounts of profit begin accumulating, meaning legal damages can be assessed.

Can all brands be registered?

A trademark can be registered only if the logo of the goods or services of a business can be readily distinguished from that of another, and that the distinguishing characteristics can be presented in words or graphics.

Furthermore, to be eligible for registration, a sign should not be descriptive of the nature, quality, purpose, quantity, value, material or country of origin of the goods or services at issue; nor should any description be represented by jargon or graphics commonly known within the industry to which the goods and services belong. For example, the Trade Marks Registry will probably reject any trademark application by a transport provider involving the word "speedy": "Speedy" merely describes the quality of the transport. Equally, any application by a computer manufacturer involving the logo "computer device" is likely to be rejected because such logo is a graphic representation of the goods themselves.

Finally, applicants should ensure that the trademark they seek is markedly dissimilar to any other registered or pending trademark.

Scope of registration

Registration gives a business exclusive rights over the use of its trademark on designated goods or services. An infringement occurs when there is unauthorised use of the registered trademark by another business or third party. In such an event, the trademark owner may file a lawsuit claiming damages and asking for reimbursement.

A trademark protects only the goods or services specified in the application documents. For example, if a business registers a trademark under Class 39 (transportation, logistics), it only prohibits another business from using similar names in Class 39. That other business may apply the trademarked name to non-Class 39 goods or services.

How to expand a brand network

After establishing a certain amount of goodwill, a business may consider licensing or franchising the trademark and associated products to other businesses or entrepreneurs. These licensees or franchisees might manufacture trademarked goods which the licensor would not manufacture on his own, or operate in countries and areas where the licensor does not operate. Licensees or franchisees often assist in the horizontal expansion of products bearing the licensor's brand.

At the same time, the licensor benefits through receipt of royalties, promotion of brand-awareness, expansion of market share and increased value for its intangible assets.

Businesses negotiating a licence or franchise should have a written contract stipulating the rights and responsibilities of both parties - such as the scope of the licence, types of goods or services applicable, amount and payment of royalties and ownership of the brand, all subject to licence and rights of the original licensee.

Conclusion

Hong Kong experiences fiercely competitive business activities on a daily basis. To survive, a business needs solid knowledge about intellectual property and brand-management.

Local government defines intellectual-property rights as copyright, registered design, patent and trademarks, and suggests that full protection may require a business to register in all categories.