Trademark

What it means

A trademark is a registered sign that distinguishes one company’s goods or services from others. It may be a word, a logo, a combination of word and image, a slogan, a shape or a colour. The owner has the exclusive right to use it for the registered goods and services and to act against imitations.

Unlike a business name, which arises when a company is entered in the register, a trademark arises only on registration with the industrial property office. A Slovak trademark is valid in Slovakia, an EU trademark in all member states, and an international application allows protection to be extended to other countries.

Protection lasts ten years from the filing date and can be renewed indefinitely. A trademark is registered for specific classes of goods and services, so two companies in entirely different fields can register the same word.

How it works in practice

Before filing we search the trademark databases with the client and also check that the domain and business name are available. An application that clashes with an earlier mark can be opposed, and the fees are then lost.

Depending on the amount, we book the costs of filing and registration either straight to expenses or as an intangible fixed asset if they exceed the threshold in the accounting policy and the law. If the company uses a mark under licence from its owner, it pays royalties, and with a foreign owner we also deal with withholding tax.

In groups of companies we recommend that the mark be owned by the company that actually develops it, with the others using it under a licence agreement. Fees between related parties must be at arm’s length under the transfer pricing rules. A trademark licence is also the core of every franchise, where the franchisee uses the mark together with the franchisor’s know-how.

What to watch out for

Anyone can apply to revoke a trademark that has not been used for five years. Registration is therefore not enough; the mark must actually be used, and evidence of use such as invoices, adverts or packaging should be kept.

A logo created by an external designer is a work protected by copyright. Without a licence agreement allowing the company to use the logo and register it as a trademark, the author may later assert claims. We therefore settle the contract with the designer before filing.