It’s somewhat obvious why large corporations benefit from trademarking; it limits potential competition, improves product consistency, and prevents customers from falling for fakes. The bigger the business’s footprint, the more valuable a trademark becomes.
But is trademarking really worth it for a small business with a limited budget?
How Trademarks Work
Let’s start with the basics: how do trademarks work?
A trademark is an example of an intellectual property right. It falls under the same umbrella as other intellectual property rights like patents and copyrights. In contrast to patents and copyrights, trademarks apply to specific elements of business symbolism. This includes logos, colors, symbols, taglines, and other components of branding. But like patents and copyrights, trademarks are designed to imbue you with legal protections. This way, no one else can steal or benefit from your original ideas.
The process begins with a simple trademark search. You’ll have to determine whether any other businesses are currently using this distinctive element; if your idea is totally original, there shouldn’t be any existing competitors. If there are competitors with similar elements, you’ll need to go back to the drawing board.
From there, you can either file an application with the USPTO yourself or work with an intellectual property attorney to discuss your next course of action. If your application is approved, you’ll pay a filing fee and be provided with intellectual property rights associated with the elements you applied for. Your trademark can last indefinitely, as long as you still use it in association with your business, though you’ll have to renew it every ten years.
The Costs of a Trademark
Before we can decide whether a trademark is worth it for small businesses, we need to know what it costs. Depending on the filing option you choose, you’ll pay between $250 and $350 per class of goods and services, and if you’re renewing, you’ll pay a filing fee of $525 per class of goods and services.
Depending on where you are in the process, and how competent you feel in managing this process yourself, you may have other costs associated with this pursuit. For example, you may have to pay designers or other professionals to help you devise your unique brand elements. Or you may want to hire an attorney.
Still, getting a trademark is less expensive than most people imagine. Even for a small business, a few hundred dollars is a relatively small price to pay for the level of intellectual property protection that a trademark gives you.
The Benefits to Small Businesses
So what exactly are the benefits?
- Audience recognizability. Once a trademark is uniquely associated with your brand, it’s going to lend itself to audience recognizability. People who buy your products or services on a regular basis will become intimately familiar with your branding, building their loyalty to the brand. And if your branding elements are unique enough, they’ll even stand out on store shelves to people who have never heard of your brand before.
- Perception of legitimacy. Having a trademark can also improve the perception of the legitimacy of your brand. Once approved, the trademark of your logo or packaging elements positively affects your brand reputation.
- Mitigation of competition. One of the most important benefits of having a trademark is the mitigation of competition. Once officially registered, no other businesses can use your trademarks for business purposes. This means you’ll have the unique rights to mark it under your own brand, and you’ll never have to worry about some other random business profiting off of your ideas.
- Easier scaling. Trademarks are especially important for businesses that plan on scaling. Registering a business in your state provides you with state-level protection, but trademarks apply nationally. Assuming your application is approved, no business in the country will be able to use your unique branding elements.
- Potential long-term value. Trademarks become more powerful and more valuable with time. As more people become familiar with the signature hallmarks of your brand, it becomes more important to maintain those standards and prevent others from using them. Think of this as a small initial investment with a massive potential payout.
The Bottom Line
The bottom line is that small businesses do benefit from acquiring trademarks in most cases. If you don’t think this business will be around very long, if you have no plans to scale, and if you’re not worried about competitors, trademarking may not be worth it.
But if you have a strong long-term vision for your small business’s future, if you want your business to be instantly recognizable, or if you want to make sure no competitors can take advantage of your branding elements, applying for a trademark is a no-brainer.