Why do many entrepreneurs delay in registering their trademarks?

Intellectual property rights play pivotal and significant role in today’s fast-paced world. The Protection of IP ensures the uniqueness of these valuable assets, including Trademarks, Copyright, Patents, Trade Secrets, geographical indications. A Trademark refers to any such mark which is capable of distinguishing the goods or services of one entity from those of others in the marketplace. It can be unique names, logos, symbols, or even sounds. Trademarks havesignificant importance not only as a legal right, rather it also promotes circumstances in the market for a brand to make a distinguished identify that costumers can trust.

Despite Registration of Trademarks provide numerous advantages, we can easily find entrepreneurs and startups who are delaying Protection of their Intellectual Property by registering Trademarks. The result of this delay can lead to limited Trademark Rights, Business risks, loss of exclusivity and brand value. The reason behind the occurring of these delays is essential to understand from the perspective of both entrepreneurs and legal professionals.

1. Lack of Awareness -

This is one of the main reasons for such delay of registration of trademarks. Business owners or entrepreneurs, they both overlook this matter. Basically, they underestimate the importance of the registering trademarks or more broadly, IP protection. they are entrepreneurs who are interestedin running a business, they know every steps and strategy of doing a successful business but when it comes to protection it through law. They are unaware of the legal landscape, such as enforcement of exclusive rights or the risk of infringement of their rights by competitors. Some entrepreneurs are not even aware of the term “Trademarks” such as what is being capable of registering as trademarks, limitation of trademarks, what else can be registered as trademark like sounds, logos, packaging, taglines etc.

2. Complexity of the process –

The complexity of legal jargon may lead to keep away the layman who are not familiar with legal procedures, from all types of law including those which are beneficial for them. Entrepreneurs may experience procedure of registration intimidating as the procedures include thorough searches, detailed application filing, preparing arguments against objections etc. these are the time-consuming process which the business owners often delay because they don’t feel familiar to it and have less confidence or resource.

3. High Cost -

The costs for registering a ,trademark can be a significant factor or reason for such delay,especially for non-individual/startup/small enterprise entities. The fees or costs often perceived as High by the entrepreneurs and startups because they are under tight financial constraints. In the beginning of the startups, entrepreneurs usually focused their spending on product development, strategic marketing, hiring and many more immediate needs. The costs for registration of Trademarks based on number of marks and classes and it increases with more than one classes or additional services. Costs for registration depend on classes, Applicant type, Filling method, additional services etc. Below is the detail of costs:

Official Fees:

• Individuals/Startups/Small Enterprises: ₹4,500 per class (e-filing) or ₹5,000 per class (physical filing).

• Other Entities (Companies, LLPs, etc.): ₹9,000 per class (e-filing) or ₹10,000 per class (physical filing).

• Notice of Opposition: ₹2,700 per class (e-filing) or ₹3,000 per class (physical filing).

• Renewal Fee: ₹9,000 per class (e-filing) or ₹10,000 per class (physical filing).

4. Underestimation of the risk of Delay -

Delaying registration of trademarks associated with high risks. without registration, an entrepreneurs or startups have limited rights over its own trademark, they do not get exclusive right to exercise, If another business starts using a similar name or logo, you have to prove you were the first to use it in commerce. These underestimations may lead to expensive legal disputes, loss of market value, damage to brand reputation, time consuming etc.

5. Lack of professional guidance -

Unfamiliarity with legal procedures lead to entrepreneurs to take legal professional’s guidance. The absence of proper guidance may result in delays for filing for registration. Many startups and enterprises which operate without any legal counsel or attorney and they hesitate to seek advice from IP professionals until face trouble. The guidance of legal professionals simplify proper classification, ensure correct documentation, and help overcome legal hurdles.

6. Small Businesses and new Startups –

As of June 2024, India has over 100,000 recognized startups and small businesses, according to the Department for promotion of Induustry and Internal Trade. Moreover, the government initiatives such as Startup India have made the procedure for registration more accessible in nature. Despite these facilities, small business and new startups often believe that their business is too small and there is no need to register their trademark. They usually focus on survival and growth and postpone the trademark registration until and unless they feel confident that their business or startup is well established now. This practice may lead to increasing risk in the longer term.

7. Domain name equals Trademark protection –

Entrepreneurs and startup owners sometimes believe that having and registering business name or domain name with the government is sufficient and equal to protection of trademarks like brand name, logo, etc. However, trademark rights are specific and based on territory. Registration of a business or domain name does not grant exclusive rights to use the same as trademark.

We can conclude from the above discussions that the challenges for protection of Intellectual property, particularly Trademark for any startups is persisting inspite of India’s strong ranking. The reasons are mainly due to unawareness, misconception and complexity of the procedure. These delays make the entity and its businesses vulnerable to significant risks including forced rebranding as well. Entrepreneurs should prioritize their registration of trademarks alongsideproduct development and consider it as strategic financial move.