Crash course on trademarks: Introduction
Trademarks, unlike most other forms of intellectual property, are mainly aimed at preventing unfair competition between parties on a particular market. Trademarks identify the origin of goods and create goodwill for the owner.
Using trademarks, products and services are identified as coming from a particular company. Potential buyers are thus able to distinguish those goods and services from the goods and services offered by other companies on the same market. This is important in order to ensure that these potential buyers are not fooled into purchasing a product of one company while believing it is a product of another company.
Next to identifying the goods or services and their origin, trademarks also create a certain amount of goodwill. Using advertisements, exclusive sales channels and other means, many companies have been able to built up a prestigious image for their products (e.g. of high quality, or being very exclusive). Trademarks are essential in such image building. The trademark not only indicates the origin of the good, but also represents a certain amount of quality. Many people will buy products labeled with such a mark because of the quality they expect, but also because of the image it creates for them and for the people around them.
Needless to say, it then becomes very attractive for others to try and profit from the goodwill created by the trademark holder. Many counterfeit copies of trademarked goods regularly enter the market in the hopes of confusing potential buyers. Because such counterfeit copies are typically of inferior quality with respect to the original product, they can seriously harm the value of the trademark and the image created. This explains why many trademark holders are very active in prosecuting copy cats and destroying counterfeit goods.