Trademark Strategy for Growing Businesses

Trademark Protection: Malta or EU? 

Businesses operating from Malta are often faced with an important decision from the outset: should they register a trademark nationally or seek protection across the European Union?

The two main options are:

• A Maltese trademark, which grants protection solely within Malta; or
• An EU trademark registered through the European Union Intellectual Property Office (EUIPO), providing protection across all EU Member States through a single registration.

While an EU trademark may appear to be the obvious choice given its wider territorial coverage, broader protection does not necessarily make it the most suitable option for every business.

For businesses whose operations are primarily concentrated in Malta, a national trademark may provide adequate protection without the additional costs associated with an EU filing. This can be particularly attractive for start-ups and early-stage businesses looking to establish their brand while they assess the commercial viability of their products or services.

Conversely, businesses with growth ambitions beyond Malta may benefit significantly from an EU trademark. Through a single registration, protection extends across the European Union, making it particularly valuable for businesses operating online, including e-commerce platforms, software providers, gaming companies and fintech businesses, whose customers may be located in multiple Member States. 

An EU trademark may also be a valuable commercial asset that enhances a business's attractiveness to investors and potential purchasers.

 

Balancing Opportunity and Risk

The scope of trademark protection should always be aligned with a company's commercial objectives. Unlike a Maltese trademark, which is assessed primarily against earlier rights in Malta, an EU trademark may be challenged on the basis of conflicting rights anywhere within the EU. This means that while the protection is wider, there may also be greater potential for additional costs, complexity and delays.

Businesses should therefore conduct appropriate clearance searches and carefully assess their current operations, target markets and expansion plans before deciding on the most appropriate registration strategy. 

Although some business owners assume they should maintain both Maltese and EU trademark registrations, this is rarely necessary. The right approach, whether a national registration, an EU trademark or a combination of both, will depend on the specific circumstances and commercial objectives of the business.

 

Trademarks in Business Acquisitions

The importance of trademark protection extends beyond brand development. When acquiring a business, buyers often focus on financial performance, liabilities and commercial contracts, but intellectual property rights can be just as significant.

A well-established brand can represent years of investment, customer recognition and goodwill. Consequently, a trademark portfolio may constitute one of the most valuable assets of a target company. 

If ownership is unclear, protection is inadequate, or trademark rights are vulnerable to challenge, the value of the target business may be significantly reduced. Trademark due diligence should therefore form an essential part of the acquisition process.

 

Key Issues to Consider

Ownership

Ownership of the trademark should be verified at an early stage. It is not uncommon to discover that trademarks are registered in the name of a founder, a related entity or another group company rather than the target business itself. Any discrepancies should be addressed before completion of the transaction.

Scope of protection

The scope of protection should also be reviewed. Buyers should assess both the territories covered by the registrations and the classes of goods and services protected. A company operating throughout Europe may, for example, hold only a Maltese trademark registration, potentially exposing its brand in other jurisdictions.

Existing disputes and challenges

Existing disputes and challenges can present substantial risks. Buyers should investigate whether any trademarks are subject to opposition proceedings, infringement claims or settlement agreements that may affect their value or enforceability.

Licensing arrangements

Licensing arrangements should likewise be reviewed carefully. Existing licences may permit third parties to use the trademark on an exclusive or non-exclusive basis, potentially limiting the buyer's freedom to exploit the brand after completion.

Genuine use

Finally, buyers should ensure the trademarks are being genuinely used in connection with the goods and services for which they are registered. Under trademark law, registrations that are not genuinely used may become vulnerable to revocation, thereby reducing the value of the asset being acquired.

 

How BDO can help

Every business has different commercial objectives, and trademark protection should reflect those objectives. Whether you are registering a new trademark, managing an existing portfolio, expanding into new markets or acquiring a business, BDO works closely with clients to develop practical trademark strategies, identify potential risks and conduct intellectual property due diligence. 

By combining legal and commercial insight, we help clients protect valuable brand assets, manage risk and maximise the value of their intellectual property throughout the business lifecycle.