You invested money in a brand, but you could lose it: a lawyer warned about the main pitfall for businesses

Registration of a legal entity in itself does not guarantee a business the exclusive right to use the company name as a brand. Proper legal protection of a trademark requires separate trademark registration. Alina Parkhuta, an intellectual property lawyer at LLC "Law Company "LOGIC"", told UNN about this.

According to her, entrepreneurs often make the mistake of believing that after a company is state-registered, its name automatically receives the same protection as a registered trademark.

Entrepreneurs often begin actively developing a brand before taking care of its legal protection. They invest in marketing, advertising, website development and increasing the company's recognition, but postpone trademark registration. If a dispute arises, this may lead not only to financial losses but also to the need to completely change a brand that has already become known to consumers

She clarified that when a legal entity is state-registered, its name is entered in the Unified State Register. It is used to identify the company in legal relations, conclude contracts and conduct business activities.

In turn, according to Parkhuta, a trademark has a different purpose - it helps distinguish the goods or services of one business from the goods or services of other companies on the market.

A trademark may be a word, logo, graphic image, slogan, combination of letters or numbers, or another designation used to individualize goods and services, the lawyer clarified.

After a trademark is registered, its owner obtains the exclusive right to use the relevant designation and may also permit or prohibit its use by other persons, the lawyer emphasized.

According to Parkhuta, postponing trademark registration may create legal and financial risks for a business.

If another person registers an identical or similar designation as a trademark for the relevant goods or services, that person will obtain legal mechanisms to protect their rights.

In such a case, a company that has already operated under the relevant name for a long time may face claims concerning the use of the brand. This may relate to the website name, advertising materials, signs, product packaging, social media pages and other elements of the corporate identity, Parkhuta said.

If a dispute arises, the company may be forced to spend money on legal protection and, in some cases, change the name and brand elements into which significant resources have already been invested.

In today's competitive environment, a brand is not merely a means of identifying a company. It builds business recognition, consumer trust and its reputation on the market.

Companies invest in advertising, marketing, social media, website creation and the development of their own style. Over time, these investments increase the economic value of the brand and its recognition among customers.

Today, a brand is one of the most valuable intangible assets of a business. Its creation requires time, financial investment and systematic work, so the issue of legal protection should not be postponed. Trademark registration helps not only secure rights to the brand but also creates a reliable foundation for the company's further development, entry into new markets, conclusion of partnership agreements and business scaling

Thus, state registration of a legal entity and trademark registration serve different functions. Company registration allows a business to officially conduct economic activities, whereas trademark registration provides legal protection for a specific brand.

For a business planning long-term development and investing in its reputation, timely trademark registration can help reduce legal risks and avoid additional costs in the future, the lawyer emphasized.