Are trademarks more important than patents?

Mei Ling Doery
05 Jul 2023

The short history of the venture can at times feel littered with examples of well funded vapour. Examined objectively, intellectual property remains a robust surrogate for long term value creation.

The rise of trademarks over patents

Whilst there is no ‘one size fits all’ approach to robust IP strategy, we are witnessing a major trend. Over the past decade, brands and trademarks are of increasing importance over patents. This is clear beyond our immediate client experience into the broader market place. Here we can observe continual decline in patent filing numbers in parallel with a notable rise in trademark filings.

Why are trademarks be on the rise?

The onset of the digital era has seen an exponential decline in communication and distribution costs. This implies an environment in which discovery and access becomes a ubiquitous possibility.

Patents remain relevant to companies where technology is both novel and high value. For example research and development organisations such as vaccine companies. That said, if a business is not precluded from selling a product because of patent issues, there are no absolute pitfalls from not having one.

In contrast, service based tech companies scale readily by being ‘first to market’. This occurs through effective brand and user experience forming the basis of retained and referred clients. Brand/trademarks also open the door to more upside by:

a) Enabling helpful expansion into secondary markets of established brand equity,

b) Creating the option to launch extra feature or product sets via the established distribution, and;

c) Facilitating both a) and b)

Beyond this, trademarks represent ‘forever renewable’ IP assets. This is in contrast to patent and design registration. The latter expire in time and risk being patented over early by competitors in today’s current fast moving technology environments.

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Weight cost & benefit

Another critical consideration for early stage ventures remains managing IP costs. The practicalities of protecting patent territory in the face of infringements often contradicts the realities of startup resource availability. Pre-profit ventures are very vulnerable to the impacts of litigation even in the face of high growth. Beyond direct legal costs, conflicts of this nature are expensive across the board. Especially so given finite and delicate team attention. Such battles can be devastating to morale whilst distracting from already packed work schedules. In contrast, moving with an emphasis on winning the market serves dual constructive goals. Firstly, consolidating traction and secondly extending runway.

The IP bottom line

Where both patents and trademark opportunities exist, an appropriate investment cadence is critical. This is especially the case where there is ambition of scaling across many jurisdictions.

Ultimately the challenge for all startups revolves around moving accurately at speed. The art is balancing hard won principles of value definition and with effective market capture in parallel. On this the key in IP strategy formation begins with asking the right questions.

If you think you have something that you could add to the team then feel free to contact us