Why Trade Marks Are Important for Business

by LegalVision - Justin Ocsan

Consumers encounter trade marks every day. Every good or service that they use has a trade mark attached to it, from their internet provider to the pen they write with. A trade mark is how a business identifies itself in the market. The most common form of trade mark is a business’ brand name or logo. However, a business’ distinct packaging or jingle can also be its trade mark. Trade marks are not only relevant for business to consumer relationships, but also for business to business relationships. This article will discuss four key reasons why registering a trade mark is important for business.

Trade Marks Generate Revenue

Trade marks are important for business because they generate revenue. Your trade mark is a communication tool between your business and your consumers. It conveys information about:

  • your business procedures;
  • the quality of your goods or services; and
  • your overall reputation in the industry.


Trade marks allow you to distinguish yourself in a market overcrowded with similar goods or services. A consumer will ultimately make the decision between two competitors based on the information conveyed by each trade mark. For example, which business had more positive (or negative) online reviews? Which business had an easy to navigate website? This information might not always accurately reflect the quality of your goods or services but it does affect the image of your business in the consumer’s mind.

As your business succeeds, so does the reach of your trade mark, regardless of whether your consumers are in Australia, Japan or Europe. For example, brands that attract overnight lines outside their stores are a result of the reputation that the brand has built, such as Michael Jordan’s Jumpman logo or Apple’s cutting-edge iPhones.

Trade Marks Have Real, Tangible Value

A trade mark is a real, tangible asset like your business stock or equipment. A trade mark will have a monetary value which will increase alongside your business’ reputation. If you end up selling your business, your trade mark will be a factor in the overall selling price of your business.

Generating sales is not the only way trade marks provide revenue. Given that trade marks are tangible assets, you can also license them to other business owners in exchange for a fee. For example, if you own a gym, you can give another gym a licence to open a different gym in another suburb using the same name in exchange for a yearly fee. Your reputation will assist the new business owner to generate new memberships.

Trade Marks Can Make Hiring Easier

A trade mark can also influence a potential candidate to apply for a job or employment with your business. Your trade mark does not only convey information about your goods or services but also your organisation itself. Platforms like LinkedIn and Glassdoor have placed the spotlight on how businesses are run and the perks of working there.

Trade Marks Are Relatively Easy to Register

If you want exclusive rights to use, license or sell your trade mark then you will need to register it with Intellectual Property Australia (IP Australia), the governing body of trade marks. Registering a trade mark can be a relatively easy process so every business should consider it.

The most common obstacles when registering a trade mark are:

  1. a similar or identical trade mark is already registered; and
  2. your trade mark is too descriptive or does not distinguish your service (for example, Melbourne Software Developers).

To avoid facing these obstacles, you should take certain steps before creating your trade mark. Firstly, you should check the Trade Mark Register and create a trade mark that is unique and easily recognisable. From there, IP Australia has a guide on how to apply for a trade mark or you can seek assistance from an experienced trade mark lawyer.

Key Takeaways

Having a well-known, easily distinguishable trade mark can provide many benefits for your business. Trade marks are important because they:

  • generate revenue;
  • are a tangible asset;
  • can make hiring easier; and
  • are relatively easy to register.

Consumers encounter trade marks every day. Registering a trade mark will help your business identify itself in the market and build your reputation.


We welcome your feedback

Hi there! We want to make this site as good as it can for you, the user. Please tell us what you would like to do differently and we will do our best to accommodate!

Protected by FormShield

We've updated our Privacy Statement, before you continue. please read our new Privacy Statement and familiarise yourself with the terms.