What are the functions of a trademark?

A trademark as a sign enabling to distinguish the goods and services of one company from the goods and services of another company plays a very important role in free market economy. It does not only individualize a product in business transactions, but it can also have a significant impact upon its recipient in many ways. Such impact is possible through performance of a number of different functions by a trademark.

The following are considered to be the basic functions of a trademark:

1. The function of indicating the origin (distinguishing function);

2. Quality function (guarantee function);

3. Advertising function.

The above functions may also be extended by the following:

4. Investment function;

5. Communicative function;

6. The function of protecting market transparency and protecting the consumer.

The function of indicating the origin (distinguishing function)

The function of indicating the origin, also known as the distinguishing function, is the basic  and primary function of a trademark. In order to fulfill the prerequisites of being a trademark, a sign must first and foremost be capable of distinguishing goods and services. Such capability allows to identify the source of origin of goods or services on the market, indicating the entity from which these goods or services originate. A trademark, through its function of indicating the origin, distinguishes the goods or services of one company from the goods and services of other undertakings.

The above function is a basis for establishing direct trademark protection, which is manifested in the right to prohibit third parties from using similar signs and the constitutive right to the exclusive use of a registered sign in commercial and professional manner in a given territory. The protection of this function is implemented by excluding the risk of misleading the public as to the commercial origin of goods or services designated with the mark.

Quality function (guarantee function)

The quality/ guarantee function of a trademark is related to a certain perception that the public may have about the goods or services designated with the mark, and the characteristic features that these goods or services may possess. The function of a trademark is to assure the recipient of a consistent level of quality of goods and services offered under the mark. A trademark, by performing this function, becomes a synonym of positive associations and ideas about the product designated with it. Upon purchasing a product designated with a specific trademark, the consumer receives information that the product meets specific requirements and has the desired qualities.

The quality function is connected with the function of designating the origin, as it consists in ensuring that the goods and services originating from a given source have certain features, meet the expected standards or have the desired quality.

Advertising function

The advertising function consists in encouraging the public to purchase the goods or services bearing a given trademark. By fulfilling this function, a trademark promotes the product designated with it, thus becoming some kind of a marketing tool. A trademark that performs this function must have some power of attracting the consumers. The source of the power of attraction of a trademark may be its high recognition resulting from the intensive use of the mark.

The advertising function can only be performed by a trademark that has become a carrier of some positive information evoking good associations with the product designated with the mark. Consequently, the advertising function remains in close relationship with the guarantee function, which ensures that the desired features of a product are on a constant level, including in particular the quality features, thus becoming a good starting point for moving forward with developing the advertising function.

Investment function

The investment function is related to the reputation of a trademark, and its purpose is to obtain and keep this reputation. This function is connected with the advertising function, however, the reputation of a trademark is acquired, apart from advertising, also by means of various commercial techniques. Protection of the investment function is implemented through extended protection of trademarks with a reputation, for example by prevention of a parasitic use of a trademark or making unjustified profits by third parties by using the reputation of the mark. Much importance is also attributed to the investment function in the area of trademark licensing.

Communicative function

By performing the communicative function, a trademark provides the public with information about the goods/services which it designates. This information may directly result from one of the elements of the mark being descriptive (an indication of the property of goods), or it may be information about the product which is conveyed by the trademark in consequence of the owner’s activities (for example, the activities resulting in obtaining high product quality). Thus, the communicative function of a trademark can be described as its overall ability to evoke some specific impressions about the goods or services for which it is intended.

The function of protecting market transparency and protecting the consumer

Trademarks are also attributed the function of protecting market transparency and protecting the consumer. This is mainly related to the issue of the role of trademarks in protecting fair competition. This function is performed for example by the prerequisite of an absolute prohibition of registration of trademarks which are misleading in relation to the marks with earlier priority on the market.

A trademark is firmly connected with its functions in business turnover. These functions may be performed cumulatively, as they intermingle and are connected with one another. In the course of time, along with developments and changes in trademark law, one may observe an evolution in the functions of trademark, where new functions appear next to the basic ones. What is important to note, according to the case law of the Court of Justice of the European Union, the list of functions of a trademark has not yet been closed.

Sources:

1. Promińska (in:) Industrial Property Law, ed. U. Promińska, Warsaw 2005;

2. Michalak, M. Witkowska (in:) Industrial Property Law. Commentary, ed. A. Michalak, Warsaw, 2016;

3. Osajda, Ł. Żelechowski (in:) Industrial Property Law. Commentary, ed. Ł. Żelechowski, Warsaw, 2021.