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What’s the moral of the story? Before you even think about marketing in a new territory, find out if the Company’s trademarks are protected there. If they are, include that fact in the distribution agreement – citing registration numbers and pertinent details. If they aren’t, don’t ask the potential distributor to do it for you.
Trademark protection can be obtained through registration or, in some countries, also through use.
Where must your trademark be protected? It is important to make sure that you are registering your trademark in all the countries where you are commercialising your products or your services. One of our clients, against our advice, decided to postpone the registration of his trademark in Korea in order to cut down on costs, and to register it only in those countries where they were already doing business. Not long afterwards, he found out that his distributor had already done it for him. Imagine how much leverage the distributor had when it came time to renegotiate the distribution agreement or when he missed his sales targets.
In general, the cost of registration of your trademark will depend on the strategy adopted. For that, the advice of a trademark specialist is advisable. Companies that start the registration of their trademarks on their own may discover all too late that they could have protected their trademarks in both a stronger and more cost-effective way. That means that they might have done it quicker and a lot cheaper by doing a bit of investigation before jumping in.
There are national, regional (like the European Union or the Benelux) and international registrations (where you decide in which particular countries you wish to register).
International registrations are very cost effective for companies that are operating in several countries, especially if they are operating both inside and outside of the European Union. This is truer than ever due to the fact that since October 1, 2004, it is possible to register your trademark in EU, as well as non-EU countries, by following a single procedure!
Management of your trademark portfolio is an issue that is frequently overlooked. Trademarks commonly last for just ten years. Make sure a suitable system is in place so that you are reminded before they expire.
So what conclusions can we draw? As channel managers, it’s your job to ask the right questions before penetrating new territory – or even changing distributors. If you are involved in negotiating a distribution agreement – or a renewal – make sure trademark protections are built in. Why invite problems, or give the distributor a gift that will ultimately make your life miserable, or worse, put your bonus in jeopardy? |
