You are investing in a promising startup. The team is top-notch, the product solves a real problem, and the market exists. But have you taken a closer look at the brand — including its legal foundation? Our Managing Partner Jani Kaulo highlights the key brand rights pitfalls from an investor's perspective.
Over the years, I have seen numerous situations where a promising startup has run into trouble because of brand rights — precisely at the moment when growth should be accelerating. The most common challenges are that the trademark has not been registered in time, or the brand name simply cannot be registered as a trademark for one reason or another. It is not at all uncommon for a brand name to end up being changed.
Every startup founder wants to build something great, and in the early days, the brand name can feel like a secondary concern. To some extent, that is fair. Too often, however, startup founders choose an overly descriptive brand name and fail to conduct proper trademark search on its availability and registrability as a trademark — which would secure ownership of the brand name.
So, what should every investor or strategic advisor to a startup understand about brand rights?
Make sure to raise and address at least the following:
1. A business name registration is not enough — not even close
Registering a business name does not provide sufficient protection, even in the early stages of a startup company.
This is perhaps the most common misconception I encounter: a startup registers its business name with the Trade Register in Finland and believes it is legally protected. That is not the case.
A business name registration grants the right to use the name as the company's official name in Finland — and that's it. It does not grant exclusive rights to use the name in marketing, it does not give protection in international markets, and it does not prevent anyone else from registering the same or a similar name as a trademark.
In international markets, a business name registration is practically worthless. If a startup is growth-oriented and targeting Europe or global markets, a registered trademark is essential.
2. One strong main brand name Is better than several weak sub-brand names
I often see startups with a main brand, a few sub-brands, separate names for different products, and yet another name for a single feature. I understand the thinking — it feels like every product deserves its own identity.
From a brand rights perspective, the reality is different.
Maintaining multiple sub-brands is expensive, both from a marketing and a legal protection standpoint. Each brand requires its own trademark protection, its own marketing investment, and its own monitoring. Resources become scattered, the brand message becomes blurred, and legal protection remains incomplete.
One clear, distinctive brand name and logo are enough for a strong brand.
3. A project name is fine — but only temporarily
In the early stages, a startup company can perfectly well use a descriptive project name or working title. It's practical and understandable. When a product or service is still taking shape, it does not make sense to lock in a final brand name.
But this is a transitional phase, not a permanent solution.
When choosing a brand name, it is critically important for companies to understand that a descriptive name — that is, one that directly tells you what the product does — is legally weak or unsuitable as a trademark. It does not stand out from competitors, it is difficult or impossible to register as a trademark, and it leaves the brand vulnerable to competitors' actions.
4. File the trademark application before going to market — not after
This is a critical point that investors should pay particular attention to.
The final main brand name must be decided and the first trademark application — preferably an EU trademark application — must be filed before the go-to-market phase. Not simultaneously, not after, but before.
Why? Trademark law is primarily based on prior rights. Whoever files for trademark registration first receives protection. If a startup begins building its brand in the market without trademark protection, it is building on sand. A competitor can register the same or a similar mark, and suddenly the entire brand investment is at risk.
An EU trademark is a cost-effective way to obtain protection in all 27 EU member states with a single application. It is the startup's first and most important step in brand protection.
A rule of thumb for investors: If a startup is going to market without already-filed trademark applications, that is a red flag.
5. As you scale, protection expands — and monitoring begins
Once a startup has obtained an EU trademark and begins scaling its business outside the EU, it is time to expand protection and begin active competitor monitoring.
In practice, this means filing supplementary trademark applications in key target markets outside the EU (for example, the USA, UK, and Asia) before entering those new markets. At the same time, trademark monitoring should be launched — a systematic process of tracking whether anyone else is filing registrations for similar or confusingly close marks. Such harmful registrations must be opposed in a timely manner to prevent the protection of one's own brand from being weakened.
Trademark watch and competitor monitoring is not a luxury but a necessity. Think of it, at the very least, as a form of insurance. Without monitoring trademark and domain name registers and the market, a startup simply will not find out in time whether another party is threatening its brand.
6. A brand must be defended — otherwise it loses its value
A trademark does not defend itself. If someone infringes on a company's trademark or files for registration of a confusingly similar mark, action must be taken.
This does not mean taking every competitor to court. But systematic action against infringements — for example, through cease-and-desist letters — is essential to preserving and increasing the value of the brand. Passivity can lead to the trademark losing its legal strength — or, in the worst case, the company losing the right to use its own name.
From both the company's and the investor's perspective, a brand is a startup's most valuable asset. Intangible capital of this kind must be protected and defended.
7. Brand rights in contracts
Brand rights and sufficiently comprehensive IPR clauses are often forgotten in contracts.
Trademarks and other brand rights must be included in key commercial agreements and partnership contracts. Who owns the brand? Under what conditions may a partner use the brand? What happens when the contract ends?
These questions are far easier to resolve in advance than after a dispute has arisen.
8. Brand use must be guided and monitored
The legal strength of a trademark depends on how it is used.
If trademarks are used inconsistently — for example, a logo appearing in different forms, colours, or otherwise modified from the registered trademark — their legal protection weakens. This applies to internal use, partners, and licensees: everyone who uses the marks, whether with permission or without.
A company must establish clear trademark usage guidelines (not merely a visual identity guide) and ensure they are followed. The dilution of a trademark or brand name — the loss of exclusive rights — is a silent threat that does not show up immediately, but whose consequences can be serious. Nokia's old trademark KÄNNYKKÄ (the Finnish word for mobile phone) is an excellent example of this.
Summary for investors and advisors
When evaluating an investment or advising a startup founder, go through these questions at different stages:
- Early stage: Is the project name or brand name only temporary?
- Before going to market: Has an EU trademark application been filed? Is the brand name distinctive — meaning it does not describe the product or service?
- Scaling stage: Have supplementary trademark applications been filed for new markets? Is trademark monitoring in place?
- At all stages: Have brand rights been taken into account in contracts? Has guidance been provided on the correct use of the trademark?
A brand is often a startup's most valuable asset — more valuable than the technology or the customer base. It is the investor's job to ensure that this asset is properly protected.