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Maintaining the Goodwill in Your Business

By 30 marca 2020No Comments

Because goodwill is your name and all of the things that your name encompasses, it needs to be properly protected against infringement. Consider this: a businessman in your local area (Area A) finds a home renovation company. He develops and begins to sell a tool of his own design, which he calls a 'Benson’. The product is a hit in the immediate area, and its popularity increases along with the business name.

An entrepreneur from the next town (Area B) visits the home hardware store in your area and purchases the 'Benson’, and decides that he could make a profit from another man’s idea. He opens his own renovation business in the next town and sells his own version of the 'Benson’.

And yet, since he did not receive permission to reproduce the 'Benson’, he did not know the original method of manufacture, and his own 'Benson’ is a failure. His store is put out of business, and he is sued by a number of his clients who received injury from using his product.

Certainly, the entrepreneur was doomed to fail, as he stole the idea for the invention in the first place. This is, in fact, a common occurrence in small businesses across the world. However, his own failed business sends ripples of repercussions back toward the businessman in your area. These repercussions include:

  1. Consumers in Area B who travel to Area A will not purchase a 'Benson’ due to its poor reputation.
  2. Consumers from Area B do not realise that the two businesses are in fact not affiliated and therefore refuse to buy a 'Benson’.
  3. The businessman in Area A is unable to expand his business to Area B because his product already has an undeserved bad name there.
  4. The Health and Safety department in Area B decide to pay a visit to the Area A business to ensure that the product does not have the same faults as the faulty product.
  5. The media picks up the stories of the injured consumers and televises it: potential consumers condemn the Area A product.
  6. The Area A business risks closure due to the lack of business it receives due to an undeserved bad reputation.

Any of these situations could occur due to the fact that the businessman in Area A did not protect his goodwill. The businessman could have trademarked his business name and product name in order to gain the power to protect himself from infringement by the dishonest entrepreneur. Should the entrepreneur tried to open his own store and sell the same product without explicit permission, the Area A businessman would be entitled to take legal action in order to protect his good name. Therefore, his goodwill would be protected.

The government is not responsible for the preservation and protect of your business name. This is, in fact, your own responsibility as a business owner. Just because you own a business with a unique name does not imply that you are protected from infringement. The best way to protect your business, product, service, or brand name is to register it as a trademark.

There are too many business that neglect to protect their goodwill against infringement: this is because business owners hold the belief that trademark registration and protection is too costly for them. Consider this: trademark registration protects your business on a national scale, and can include your business name, designs, logos, slogans, and packaging, as well as other material that is unique to your business. When you are a registered trademark holder, you are protect against infringement for ten years, and then indefinitely with renewals every decade.

Trademark registration can be made simple with the consultation of an experienced trademark attorney. Your attorney can help you in the process of filling out your applications, as well as combating any legal action taken by your competition. You can even apply for international registration if you an exporting company.

Once your trademark has been registered you essentially gain the monopoly of that name within your country. Trademark protection is simple: when your mark is registered, you can prevent other companies from registering confusingly similar names as their own. You can also take immediate legal action should another party infringe on your trademark rights.

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