Characteristics and Functions of Trademark

What are the primary functions of trademark?

A trademark is a distinctive sign that helps consumers to recognize the goods, products, or services of a particular producer or provider. In India, a trademark has the following roles:

• Firstly, a trademark indicates the source or origin of the goods, products, or services. In this case, it is presumed that any particular good can have only one origin.
• It assures the quality of the goods bearing the trademark to the consumers.
• Apart from the quality, which is related to the goodwill of the product, the trademark also creates brand awareness and serves the marketing purposes and advertising aspects. In other words, companies put a great amount of resources into developing any product, marketing it to customers, providing customer support and backing up their products with warranties. Trademark assures that the effort to serve the consumers pays back.
• Provides legal protection and guards against counterfeiting and fraud of a particular brand.
• Finally, trademarks are used to differentiate the product from others. This is the distinguishing factor that falls under distinctiveness. The idea is that trademarks would distinguish marketed goods and services from those of competitors.

Product Differentiation Function

Trademarks play a vital role in establishing product differentiation. The concept of product differentiation refers to creating a distinction between the offerings of various sellers within an industry, making them less substitutable in the eyes of buyers. It involves shaping a product's perception in a way that a buyer perceives a specific brand as essential, such as considering ‘Colgate’ as the only toothpaste or preferring ‘Apple’ as the exclusive smartphone choice.

While patents and industrial designs are crucial for product differentiation, they are protected for a limited duration. In contrast, trademarks receive legal protection indefinitely, making them a key element in the differentiation process. Other factors contributing to product distinctiveness are comparatively weaker as they can be easily imitated. The legal protection granted to trademarks makes it exceedingly challenging, if not impossible, for competitors to replicate the product's image.

To illustrate further, let's consider the example of a software application. If a particular application has a trademarked logo and name, it becomes uniquely recognizable to users. This distinctive trademark sets it apart from similar applications and makes it difficult for competitors to replicate the branding, leading to a stronger differentiation in the market. In this way, trademarks provide a long-lasting and effective tool for product differentiation.

Identification of Source and Origin Function

An essential role fulfilled by trademarks is their function as a means of identifying the source or origin of a product. A trademark acts as a condensed representation of the various attributes associated with a product, encompassing factors such as technological advancements, after-sales service, and warranties. While the information conveyed by a trademark is limited in scope, it is crucial in establishing a connection between the product and its source.

Although trademarks may not provide an exhaustive account of a product's qualities, it is not advisable to undermine the importance of product differentiation through trademarks. Even with its inherent limitations, a trademark serves as a valuable tool for customers to recognize and associate a particular product with its origin or source. By relying on trademarks, consumers can make informed decisions based on their familiarity with a brand, its reputation, and the consistent quality it represents.

To put it differently, consider the example of a luxury fashion brand. A trademarked logo or emblem on a garment not only signifies its authenticity but also provides customers with a sense of trust and confidence in the product's origin. The trademark serves as a symbol of the brand's craftsmanship, design expertise, and overall experience associated with owning its products. Thus, trademarks play a pivotal role in helping customers identify the source of a product and make informed choices based on their understanding of a brand's reputation and attributes.

Transformation of origin function

Brand registration in modern times has transformed the function of indicating product origin. The proliferation of brands, driven by marketing needs and the desire to maintain market shares, has led to an abundance of choices for consumers. However, this proliferation can hinder the proper performance of trademarks in indicating the origin of a product. When consumers can easily trace the source of a product through a trademark, it assists them in making purchasing decisions. The identification of a product with a successful and widely recognized trademark can create substantial market power. Nonetheless, the drawback of excessive brand proliferation is that trademarks may fail to perform their indication of origin function effectively, making it harder for consumers to associate products with their true source.

An Ancillary Function

The identification of products and their quality serves as a supplementary function of trademarks, complementing their primary function of establishing goodwill; the goodwill associated with a trademark represents the valuable property. While the creation of goodwill incurs costs to society, the identification of product source and quality through registered trademarks benefits the consumers.

Characteristics of a Good Trademark

• Implies a label, signature, word, name, brand, or a combination of colors: A good trademark should encompass one or more of these attributes, helping to identify and differentiate the product or service.
• Easy to spell, speak, and recognize: The trademark should be simple and straightforward, making it easier for the public to remember and quickly acknowledge.
• Short and not perplexing: Lengthy and confusing trademarks can be easily forgotten, so a good trademark should be concise and uncomplicated.
• Unique and distinct: To avoid confusion and legal conflicts, the trademark should be original and not similar to any existing popular or registered trademark.
• Clear and concise: The chosen mark should provide a clear indication of the nature of the product or service offered, eliminating any confusion or doubt for consumers.
• Inventive or coined words or distinctive designs: The best trademarks often involve unique and creative elements, such as invented words or distinctive geometrical designs.
• Not descriptive of the product: A good trademark should avoid directly describing the product or service. Instead, it should be suggestive of the quality or characteristics associated with the brand.
• Excluded from prohibited classes: When registering a trademark, it should not fall within the list of prohibited classes as defined in the Trademark Act. This ensures that the chosen mark is eligible for registration and protection.