Trademark registration is a critical asset protection step that startups must prioritize before seeking external funding. In India, brand names and logos are registered under the Trade Marks Act 1999 across various classes of goods and services.
Why Investors Prioritize Registered Trademarks
During a funding round, investors conduct thorough legal due diligence. Mismatches or disputes in brand ownership can delay or derail the investment. Here is why ownership is crucial:
- Exclusive Rights: A registered trademark grants the company the sole right to use the brand name, logo, or tagline in commerce, preventing competitors from passing off similar services.
- Asset Value: Trademarks are intangible assets that can be valued, licensed, or sold, directly adding to the company's valuation.
- Protection Against Infringement: Registration provides a strong legal basis to sue for trademark infringement, securing your market position.
Common Obstacles in the Filing Process
Failing to do a preliminary TM Search could result in a registry objection code or opponent legal notices. MSR's legal desk advises setting up class registrations prior to seed funding rounds to ensure intellectual rights are locked.