What are the functions of trade marks?

A good trade mark gives confidence to consumers and urges them to keep buying the trade marked goods, thus solidifying the market position of the proprietor’s trade mark against competing manufacturers. Hence, trade marks are essential means of market competition. We have collected several functions of a trade mark to illustrate a handful of examples of how you can use your trade mark.

Distinctive function

Trade marks perform their distinctive function if they are capable of distinguishing a product (references to products alternatively include services as well) in a unique manner. A purse for women cannot be called a purse or reticule, since not only your one, but all purses for women, are called by this name. A purse-shaped form does not perform the distinctive function, either. The distinctive capacity is an essential function, its performance is a fundamental requirement and its absence is an absolute

ground for refusal, meaning that the authority will not register signs without distinctive function. Occasionally, signs can acquire distinctive function – by intensive use –, e. g. the four rings sign of Audi.

Protective function

The proprietor of a trade mark has the exclusive right to use and to explicitly authorise the use of the trade mark. The proprietor may also seek remedy against unauthorised use and may file petitions with the competent court for various sanctions (e. g. destruction of the infringing products).

Competitive function

If the consumers have positive experiences with your product, they will remember the trade mark and will prefer your product to other goods, even if your product is more expensive than that of your competition. Whenever having the opportunity to choose between Sony and Junoszty video cameras, conscious consumers will prefer the camera manufactured by Sony to that produced by the competitor.

• advertisement function

Trade marks play an important role in marketing. Advertisements usually strive to exploit the marketing potential of trade marks by putting a strong emphasis on the mark. Certain TV channels broadcast advertisements only for registered or pending trade marks, while, in certain countries, the ® letter indicating registered trade marks is used due to its advertisement and brand emphasising function.

Quality indication function

If you want to buy a vehicle of high quality, you know to choose from the selection bearing the Jaguar, Mercedes, Audi, BMW, Lexus etc. trade marks. If you are looking for cars of lower quality, you will choose a Skoda, Lada, Dacia, etc. Consumers are looking for different quality in a Lacoste shop than in Poundstretcher. Trade marks apparently indicate the quality of a product.

• guarantee function

Trade marks also have guarantee functions, which have a strong influence on consumer behaviour. If you buy a trade marked product, you trust that you can buy the same quality a couple of years later as well. A common provision of licence agreements is the authorisation of the licensor to cancel the licensee’s authorisation to use the trade mark, should the licensee fail to comply with certain quality requirements. If you buy Pilsner Urquell in any country, you can be certain that the beverage will be of good quality and will have a distinctive bitter taste. Due to the quality indication and guarantee functions of trade marks, it is of essential importance that consumers associate each product with the corresponding manufacturer (or another company related to the manufacturer).

Origin indication function (optional)

Several trade marks, such as Bayerische Motoren Werke or Real Madrid, indicate the origin of the product as well, that is they identify the geographical location from which the product originates. Misrepresentation of origin by the proprietor of the trade mark is qualified as deception and results in the refusal of registration by the authorities. However, relatively unknown locations may still be used for trade mark purposes.

Manufacturer indication function (optional)

Brand names are often identical to the company name, in which case manufacturer indication function emphasises the guarantee and quality related aspects. It is obvious that a Philips laundry- iron was manufactured by Philips. Volkswagen vehicles are also obviously manufactured by

Volkswagen, even if they are actually assembled in Portugal (like the Volkswagen Sharan).

Group indication function (optional)

Collective trade marks are a special kind of trade marks, where the proprietor of the trade mark is an organisation, but the trade mark is used by the members of the organisation, instead of the organisation itself, in full compliance with a fixed regulation or set of requirements.

Certification function (optional)

A subcategory of collective trade marks comprises the so-called certification marks. In this case, the proprietor of the trade mark, such as Der grüne Punkt or TÜV, authorises the use of the mark based on a regulation setting certain requirements and subject to the condition of compliance with the requirements.