Functions of Trademarks in India

A trademark is a brand name or logo associated with the company’s goods, products or services. The consumers who buy the goods or avail of the services recognise it with its brand. The brand or trademark may consist of words or numerals, designs or a combination of all. 

A trademark can distinguish the goods or services of one person or company from those of others. They are intellectual property rights in India. The Trademarks Act, 1999, regulates the registration and functions of a trademark.

Primary Functions of Trademarks

A trademark primarily serves the purpose of identifying the origin or source of goods, products or services. In India, a trademark performs the following functions:

• It identifies the product and its origin
• It proposes to guarantee the quality of the product
• It advertises the product as it represents the product
• It creates the image of a product in the minds of the public, especially the consumers or the prospective consumers of the product

Product Differentiation Function

Trademarks serve as the basic means of achieving product or service differentiation. The trademarks enable a customer to distinguish goods, products or services in the market without confusion and make him/her arrive at a decision on what to purchase.

In perfect competition, trademarked services or products of various sellers are the perfect substitutes for a buyer. But in product differentiation competition, such trademarked services or products are just close substitutes. The competition takes place in building brand loyalty and advertising effort based on the non-substitutability of the services or products.

For example: The advertisers of the brand ‘Surf’ seek to build an image that the ‘Surf’ brand has qualities that cannot be replaced by any other detergent and all the other detergents like ‘Ariel’ or ‘RIN’ possess different quality or characteristics. A message is built up that the customer is looking for the product ‘Surf’ and not just a detergent.

Identification of Source and Origin Function

One of the most important functions of a trademark is to serve as information to the customers for identifying the origin or source of a product. The trademark guarantees the identity of the origin of the trademarked services or goods to the consumer or end-user. It enables the consumer to distinguish the trademarked goods or services from others that have another origin without any confusion.

Under the Trademarks Act, 1999, a trademark must be distinctive to fulfil its identification of origin function. When the trademark is distinctive, it is granted registration and protection under the trademarks law in India. The Registrar of Trademarks can refuse the trademark registration when the mark is not distinctive, and thus, the trademark will fail to perform its function of identifying the source. Trademarks get legal protection under the Trademarks Act, thus making it difficult for third parties to intimate or copy the product.

The Trademarks Act also safeguards the trademark since it prohibits any identical or similar use of the trademark by its competitors in the market, who may take advantage of the reputation and position of the trademark.

For example: The trademark ‘Brooke Bond’ identifies tea originating from a company manufacturing tea and marketing it under that trademark.

Quality Function

A trademark ensures customers of the quality of the trademarked products or services. Customers select goods or services known for their quality. Thus, trademarks help the customers decide the products they need to purchase or the service they need to avail of. Reputation and identification of quality are the key features of trademarks.

Customers often use trademarks to identify and choose products or services with quality. When a customer has a good experience with a trademarked product, he/she will prefer to use the same product having the same trademark. A customer will re-purchase a product again as he/she will believe the trademarked product will have the same high quality that it had when it was purchased previously. 

For example: The quality of tea sold in the packs trademarked as ‘Brooke Bond’ would be similar, but they would be different from tea labelled with the trademark ‘Taj Mahal’.

Advertising Function

The trademark represents a product or service. Another significant function of trademarks is promoting products and services, thus providing an effective mode of advertising them. The intention of the use of trademarks is to make consumers aware of the trademark and attract their attention to the trademarked products or services. Customers can be attracted through advertisements, which reinforce the image of a product or service. 

Trademarks are used in marketing and advertising campaigns to establish positive associations and brand recognition. The trademark or logos act as a visual cue for the services and goods of a company and thus set it apart from its competitors. Companies can achieve brand recognition successfully by using a logo or slogan.

For example: The trademark of ‘Sony’ is associated with electronic items. Thus, customers associate the trademark ‘Sony’ with a particular quality of a particular class of goods. It advertises the product while distinguishing them from the products of Sony’s competitors. 

Creation of Image Function

Trademarks create an image of the product or service they are associated with. Trademarks essentially function to create goodwill for the company. The goodwill embodied in a trademark constitutes a company’s intellectual property or asset. The prolonged usage of a trademark associated with a particular business helps the business gain reputation and goodwill regarding its particular trademark. 

In due course of time, the general public gains the knowledge and is aware of the trade name or brand name and associates the particular trademark with the specific services or goods. Thus, trademarks gain reputation and goodwill, which eventually expands to a larger area making the trademarks known globally.

For example: The mark ‘M’ which represents the food items originating from the American fast-food chain ‘McDonalds’, creates a reputation and image for food items offered by it for sale in the market.

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