Role Of Trademark

Acquisition of Monopoly

The main role of trademarks nowadays is that the acquisition of monopoly or exclusive right to use a trademark or brand name in a several countries and for as many merchandise, in relation to that is used or registered, as possible. Trademarks owners strive for non-use of any similar mark by others even on completely different goods or services by taking recourse to legal proceedings. Legal proceedings could also be genuine or may be in the nature of strike suits, provided the circumstances or cost factors for taking the proceedings permit. The trademark rights are acquired by owners simultaneously, with the utilization of trademark on specified product or services. The trademark owners, by powerful advertising campaigns in collaboration with licensees, produce brand loyalty and establish product differentiation. This commonly leads to establishing a desirable goodwill and market power which may nip competition in the bud and can successfully place a barrier to the entry of latest corporations in this particular field of activity.

Acquisition of Goodwill

Over a period of time, the owners of trademarks acquire goodwill not only for trademark, however conjointly for the trade name (the name of the enterprise using the trade mark)an enterprise with a reputed name will successfully indulge in brand proliferation conjointly utilising the goodwill of the first referred trademark. By such actions more brands from independent enterprises get restricted and also the sources of supply of various brands into the markets are so reduced. It's well-known that competition among brands eliminates price competition. Non-price competition through brands is compared to selling dreams in a fragrance bottle with which corporate sector gets large resources at its disposal to pay in numerous promotional activities.

Coercing the use of trademarks and right to quality control

Trademarks perform another role of extensive consequence. The trademark owner, because of his bargaining strength in giving technical know-how mandatorily requires other persons(transferee of technology) to use his trademark against royalty or alternative indirect costs of advertising, promotions and maintaining and building the commercial price (goodwill) of the trademark.