CASE 642: WHAT HAPPENS IF A STARTUP DOES NOT PROTECT ITS BRAND NAME AS A TRADEMARK?

During the startup process, a brand name is often used from the very beginning to build the company’s image, attract customers, and establish a presence in the market.

However, many startups believe that simply using a brand name for a long period, promoting it widely, or registering the company’s business name is sufficient to protect that brand name.

This misconception may create significant risks. A company name, trade name, and trademark are different legal concepts and may have different scopes of protection. In particular, the fact that a business has used a particular brand name in its commercial activities does not necessarily mean that the business has established industrial property rights over that trademark.

So, what can happen if a startup does not register its trademark?

I. SUMMARY OF THE PRACTICAL CASE

Startup A establishes a cosmetics business and chooses the brand name “LUMIA” for its products.

After commencing operations, Startup A makes significant investments in advertising, packaging design, website development, distribution systems, and bringing products under the “LUMIA” brand to market.

However, in an effort to save costs, Startup A does not proceed with trademark registration.

After some time, Startup A discovers that Company B has filed a trademark application for “LUMIA” covering similar goods.

Company B is subsequently granted a protection title and requests that Startup A stop using the “LUMIA” sign on its products.

Startup A argues that it used the name “LUMIA” first, already has customers, and has invested substantial amounts of money in building the brand. Therefore, Startup A believes that it should automatically have rights to the name.

The issue is: If Startup A used the brand name first but did not register the trademark, will it be protected by law?

II. LEGAL PERSPECTIVE – “A STRONG LEGAL SHIELD”

1. Legal regulations

Under Point a, Clause 3, Article 6 of the 2005 Law on Intellectual Property, as amended and supplemented in 2025, industrial property rights to a trademark are established on the basis of a decision granting a protection title issued by the competent authority through the registration procedure, or recognition of an international registration under an international treaty to which Vietnam is a member.

Accordingly, for ordinary trademarks, the registration mechanism plays a particularly important role in establishing industrial property rights.

Under Clause 1, Article 72 of the 2005 Law on Intellectual Property, as amended and supplemented in 2025, a trademark may be protected if it satisfies the statutory conditions, including being a visible sign in the form of letters, words, drawings, images, three-dimensional representations, or a combination of such elements, represented in one or more colors. Current law also recognizes sound marks capable of being graphically represented.

Under Clause 2, Article 72 of the Law on Intellectual Property, a trademark must be capable of distinguishing the goods or services of the trademark owner from those of other entities.

In addition, Article 74 of the Law on Intellectual Property provides regulations concerning the distinctiveness of trademarks, identifying signs that are capable of distinguishing goods and services and signs that lack such distinctiveness.

Regarding the term of protection, Clause 6, Article 93 of the 2005 Law on Intellectual Property, as amended and supplemented in 2025, provides that a Certificate of Trademark Registration is valid from the date of grant until the end of ten years from the filing date and may be renewed for successive periods of ten years each.

Where multiple parties apply to register identical or similar signs, Article 90 of the 2005 Law on Intellectual Property, as amended and supplemented in 2025, establishes the first-to-file principle.

Accordingly, where there are multiple applications filed by different applicants for identical or equivalent trademarks used for identical or similar goods or services, the protection title will generally be granted to the trademark in the valid application having the earliest priority date or filing date, depending on the applicable circumstances.

The law also provides for certain special circumstances in which trademark rights may be established or protected on other legal grounds. However, merely using a brand name in business does not automatically give a startup all the rights enjoyed by the owner of a registered trademark.

2. Application to the case

In the above situation, Startup A used the name “LUMIA” first but did not register the trademark.

Prior use may create commercial value, goodwill, and a customer base for Startup A. However, these factors do not by themselves mean that Startup A has established industrial property rights over the trademark.

If Company B satisfies the registration requirements and becomes the lawful owner of the trademark in accordance with the law, Startup A may be placed in a disadvantageous position if it continues using the sign for goods or services falling within the scope of protection.

Importantly, the fact that Startup A has invested substantial amounts in advertising does not automatically substitute for trademark registration.

Therefore, if a startup has used a brand name for a long period without registering it, the business may face a paradox: the more well-known the brand becomes, the greater its commercial value, but if industrial property rights have not been established, the risk becomes more significant if another party registers the trademark first.

In particular, Startup A should not confuse a company name with a trademark.

Registration of a company name with the business registration authority and establishment of industrial property rights over a trademark are legally distinct matters. The registration of a company name does not mean that every corresponding sign is automatically protected as a trademark for all goods and services.

If Startup A wishes to protect the “LUMIA” brand, it should proactively assess registrability, identify the relevant classes of goods and services for protection, and carry out the appropriate trademark registration procedures.

If Company B has already filed an application but has not yet been granted a protection title, Startup A should promptly assess the status of that application and determine whether there are legal grounds available to protect its rights and legitimate interests.

If Company B has already been granted a protection title, Startup A should examine, on a case-by-case basis, whether opposition, cancellation, invalidation, or other legal mechanisms may be available depending on the circumstances and legal grounds for establishing the rights.

3. Legal conclusion

Failure by a startup to register a trademark does not, in itself, constitute a violation of the law.

However, failure to register may prevent the startup from establishing industrial property rights over its brand through the registration system and may place it at a disadvantage if another party registers the trademark first.

In particular, startups should not assume that long-term use of a brand name, a large customer base, or substantial advertising investment will automatically create ownership rights over the trademark.

Therefore, trademark registration should be regarded as an integral part of an intellectual property protection strategy from the early stages of a startup.

III. PSYCHOLOGICAL – EDUCATIONAL – MANAGEMENT PERSPECTIVES – “THE HUMAN-CENTERED KEY”

From a psychological perspective, startups often prioritize capital for products, personnel, marketing, and market expansion. As a result, trademark registration costs may be perceived as an unnecessary or non-urgent expense.

Some founders also believe that once a brand becomes well known among customers, other parties will not be able to take it away.

This perception creates potential legal risks.

From a corporate education perspective, founders and employees need to understand the differences between a company name, trade name, trademark, and other forms of intellectual property.

From a management perspective, businesses should incorporate trademark searches and registration into the process of selecting product names or developing a brand, rather than waiting until the brand has become well established before taking action.

IV. COMPREHENSIVE SOLUTIONS FROM EXPERT NGUYEN HUU LONG

Step 1: Conduct a trademark search before choosing a brand

A startup should check trademarks that have already been registered or are currently under application before officially adopting a brand name.

Early searching helps the business reduce the risk of making substantial investments in a brand that cannot be registered or is already associated with rights held by another party.

Step 2: Register the trademark as soon as the strategic brand is determined

After selecting a name and designing the brand identity, the company should assess registrability and proceed with registration for the relevant classes of goods and services that the company actually provides or plans to develop.

In particular, startups should pay close attention to the filing date because the first-to-file principle may directly affect the ability to establish trademark rights.

Step 3: Build a brand asset portfolio

A startup should not limit its intellectual property strategy to registering only one brand name. It should review its entire valuable brand identity system, including names, logos, and other distinctive signs, to determine which elements should be legally protected.

When expanding into foreign markets, the company should also develop a trademark registration strategy for its target markets.

EXPERT’S PERSPECTIVE

A startup may spend years building a brand, but a trademark dispute can arise in a relatively short period if intellectual property rights are not established in a timely manner.

Trademark registration is not merely a legal formality. It is a way for a business to transform a name used in commercial activities into an intellectual property asset supported by a clear legal protection mechanism.

A startup may begin doing business under an unregistered name, but if that name truly becomes a valuable brand asset, delaying protection may ultimately force the business to pay the price for the very value it has created.

EXPERT’S MESSAGE

“Do not wait until your brand becomes famous to register your trademark. Once your brand has value, someone else may already have recognized that value before you did.”

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