As a result of globalisation, the market has been congested with several similar products over the last few years, which is prone to causing confusion among customers. One way to differentiate all these goods and to know who the producers are, consists in applying a distinctive sign on each and every product, called trademark.
The aim of this paper is to emphasize the importance of a trademark for a company due to its value on one hand, and due to its functions on the other hand. In fact, registering a trademark does more than offering the owner the possibility to differentiate its own assets from other similar goods: it can also be an effective way of advertising or certifying quality. Because of its importance, a trademark has managed to become a disembodied asset on its own.
Definition and value
The trademark can be defined as a distinctive sign that allows its owner (usually a company) and helps at the same time the customers to identify the products or services of a company and to differentiate them from the products or services of a competitor (Roş, Spineanu-Matei and Bogdan, 2003, p.23). Even though, in its initial stages, a trademark was used to help customers to identify the producer of different belongings (for instance, in antiquity a specific sign used to be applied on pottery), nowadays it became a tool used to identify strictly the products (Eminescu, 1983, p.20).
First of all, the importance of a trademark is determined by its impressive value. We can all ask the same question, how is it possible for an apparently insignificant sign/mark/symbol which is applied on different products to have value in itself? The answer is due to the late development of commerce, which is based mainly on advertising. Thus, an irrelevant sign becomes an intangible good with an inherent value. For instance, in 1924, the trademark ‘Dodge’ was assessed at 74 million dollars, whereas the entire company was appraised at 146 million dollars. Therefore, the trademark was worth slightly half over the value of the entire company (Eminescu, 1983, p.20). Another relevant example is represented by trademarks such as Coca-Cola, Pepsi-Cola, Marlboro, Nescafe, Camel, their value in 1992 being assessed between four and 40 million dollars (Roş, Spineanu-Matei and Bogdan, 2003, p.29).
According to some recent studies carried out by Interbrand in 2011 and Millward Brown Optimor in 2012, the trademarks’ value became even more obvious recently. In 2011, Coca-Cola was rated as the most ‘expensive’ brand, with a value of almost 72 billion dollars, followed by IBM (69.905 billion dollars) and Microsoft (59.087 billion dollars). In 2012, due to technology development, the value of trademarks boosted even more, thus the most onerous brand was ‘Apple’, with a value of 182.951 billion dollars.
Therefore, as the statistics presented above point out, a trademark or a brand has an inherent value that cannot be neglected, which leads to a conspicuous conclusion that a trademark represents one of the most valuable assets that a company has. Moreover, according to Article 7 from the Paris Convention for the Protection of Industrial Property of March 20, 1883, the principle of independence of a trademark irrespective of its object is emphasized even more; it is thus highlighted once again that a trademark is a distinct asset, not only a sign applied on other belongings.
The functions of a trademark
Besides its impressive value, a trademark is important for its functions as well. Therefore, a ‘brand’ not only helps a customer identify the products or the services of a company, but it can also be an efficient tool to create competition, to certify quality or even a way to protect the consumers.
1. The first and one of the most import roles that a trademark plays, is to differentiate similar products or services of various companies. This function is linked to the distinctive feature that a trademark has, distinctiveness which allows the customers to easily recognise a product or a service. However, the more distinctive a trademark is, the more risky it gets to confuse the trademark with the product/service in itself. For instance, the brand ‘Adidas’ became a common word used to describe sport shoes, or ‘Xerox’ does not refer only to the company which produces devices used to print or copy documents, but to the activity of photocopying itself. In this situation, according to Romanian law (Law 84/1998, Article 46 paragraph (1) letter b), the owner of a trademark can be decayed from the rights a trademark offers.
2. Regarding the fact that the entire activity of a company is based on a mechanism of clientele attraction, a trademark can create competition between different companies. The main drawback in this case is determined by unfair competition. One manner to generate unfair competition is represented by the deliberately created confusion by another company, in order to attract the customers. The most common procedure to create confusion between two brands is to counterfeit one of them (with a simple Google search you can easily find trademarks like Dolce & Banana instead of Dolce & Gabbana, Abidas instead of Adidas or Colddate instead of Colgate). According to the EU Directive 2008/95/CE, in this case, one of the trademarks can be affected by nullity. However, when registering a trademark, someone has to take into consideration the specialty principle that characterises a trademark, a principle which allows a person to register the same trademark, but for a different service or product. Therefore, a trademark is protected only in a certain field, not for every product/service, except for the notorious trademarks which offer protection in any field and no registration is required. (Vivant, et al., 2004, p.355).
Another type of unfair competition is to spread out accusatory allegations about a competitor’s trademark in order to affect his/her reputation. This type of unfair competition is also known as disparagement (Roş, Spineanu-Matei and Bogdan, 2003, p.519).
3. Another essential function is represented by the quality securement of the products or services provided by a company. Thus, if the customer has been accustomed to a certain quality, should the company not respect the standard, this could result in damage bore by consumers. The penalty in this case does not come from the coercive power of the state, but from the consumers themselves. Therefore, the customers can renounce at the products or services they used before, and as an immediate consequence, the company will suffer the loss. This function is not a juridical one, but a social function void of juridical penalty (Roş, Spineanu-Matei and Bogdan, 2003, p.35). As a conspicuous result, a trademark can play the role of protection for the consumers. Besides the sanction presented above, the customer can always use civil liability provisions.
4. Last, but not least, the trademark also plays an important role in advertising. This function is helpful, on one hand because in this way the products or the services are being easily promoted, and on the other hand, because the trademark detaches from the product it is applied upon becoming a distinct asset with inherent value (Eminescu, 1983, p.23).
To conclude, I strongly believe that nowadays, due to technology development and excessive advertising, a ‘brand’ is an asset far more precious than many other belongings that a company owns. Therefore, a trademark has an outstanding importance, from a double perspective. Firstly, it can acquire an impressive value that cannot be overlooked, and secondly, it possesses several essential functions, which are strictly linked to a company’s welfare.
