© Droit d’auteur 2020 Altacit Global. All Rights Reserved.
This article was published in Manupatra Intellectual Property Reports on April 2011
Dhanya N. Menon[1] & Arya Mathew[2]
Edited by Dr. Sudhir Raja Ravindran[3]
To “trade” means to buy and sell in the jargon of the financial markets. Trading could include goods or services or it may be shares or securities. May it be a trade market or a share market[4], competition is the common element involved in the market features. To create a market potential, the traders have to cope with the competition. It is a constant endeavor for companies to focus their attention on increasing market share in comparison to their competitors. Competitors duplicating the marketing ideas of other companies to enhance their business performance are not uncommon. Strategies which are hard to duplicate by competitors are those which rely on the intangible assets of the company such as corporate culture and brand image. Trade Mark is one of such intangible assets by which competition is enhanced in the product market. Similarly, in stock market, to identify the shares of one company from other unique characters are used, namely ticker symbols. Ticker symbols are an important distinguishing element for issuers and exchanges.
Trademark is a form of the intellectual property protection. It is the property of the proprietor, who has acquired a value in the mark by its continuous use. The intellectual content of trademark is entirely different from other categories of intellectual properties, since its creation has nothing to do with the intellectual labour of human being.[5] The property rights in the marks are obtained purely by continuous and open use. The purpose of marking is not only to indicate the origin or quality but also to indicate the ownership. In ancient times, the marking was used to indicate that a particular thing was a royal property[6]. There were compulsory marking on the goods by the administrative authorities for the purpose of finding out and punishing the traders for producing defective goods. The consumer interest and the producers’ interest were not of significance.
When the trade expanded, the goods began to travel to distant places. It was not often possible for the consumer to know the real manufacturer or source of the goods, since there was no direct connection between the consumer and the manufacturer. This caused the evolution of trademark to be used as an identifier of the source of goods rather than the ownership.
Trademarks help the evolution of economy and society; they also help to create a better system for selling services and products. The name one selects as a trade mark represents his products’/services’ quality and the company’s goodwill. Thus, the trademarks play an important role for the commercialization and growth of the industry. Since the trademark associate the product with the manufacturer, generally there is only one person or authority behind the creation of the trademark. Moreover, the trademark is treated as the private property of the manufacturer, such as a company or an individual.
Large investments are made for developing a trademark, associated reputation in the market, maintaining the level of quality assured and for the advertisement of the marks. A strong brand induces consumers to return and purchase new products that contain the same brand name, causing the brand to become a valuable asset, embodying its accumulated goodwill. However, to be an efficient indicator of source and quality, a brand should be exclusive to the service provider and manufacturer. This exclusivity can be secured by trademark protection for which the brand must meet certain criteria. It must be distinctive and should be differentiated from previously existing marks[7]. Thereby making a trademark an important asset of the firm, whose value may sometime far beyond the physical assent of the Company[8].
Since, the trademark associate the product with the manufacturer, generally there is only one person or authority behind the creation of the trademark. Moreover, the trademark is treated as the private property of the manufacturer. It may be company or an individual; it is they who have the exclusive right over the mark. The property in the mark is the good will attached to it, which is often at the risk of deception.
Trademarks help the evolution of economy and society; they also help to create a better system for selling services and products. The name one select as a trade mark represent his products’ quality and the company’s goodwill. A well-chosen and well-publicized trademark often has value far beyond the physical assets of a company. Thus, the trademarks play an important role for the commercialization and growth of the industry.
In general, it is economically efficient for the society to protect trademarks because it reduces consumer search costs. Consumers come to know that a trademark indicates a particular producer or product with which they associate a particular level of quality. Consumers can spend less time investigating the source or quality of a particular product, and producers can spend less time communicating the source or quality of a particular product. This creates a socially beneficial efficiency[9].
The history of the stock ticker[10] and ticker symbols begins with the ticker tape machine invented by Thomas Edison. The original need for symbols no longer exists, but stock tickers are still alive today[11]. Stock tickers are unique for each company, regardless of the stock market or exchange on which they trade. It is used to uniquely identify publicly-traded shares of a corporation on a particular stock market. It may consist of letters, numbers or a combination of both, representing a particular security listed[12] on a particular stock market or otherwise traded publicly. Ticker symbol refers to the symbols that were printed on the ticker tape of a ticker tape machine. Company stocks are listed on the exchange to facilitate share/stock trades which is identified by their unique ticker symbol.
When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors use to place trade orders. Every listed security has a unique ticker symbol, facilitating the vast array of trade orders that flow through the financial markets every day. For example ‘KO” is the ticker symbol used by the Coca Cola Company; “MSFT” is the ticker symbol of Microsoft, “GE” is of General Electric, “IBM” is of International Business Machines and “INTC” is of Intel. It gives the investor the information of where a stock trades and an insight to the company’s performance.
Different stock exchanges follow their own style in ticker symbol. In some stock exchange two letter ticker symbols exist whereas in some other three or four ticker symbols exist. It is possible to identify the exchange in which the share of a company is listed looking into the number of letters used as ticker symbol. For example, one or two letter stock symbol is issued by NYSE[13]. Three letter ticker symbols are issued either by NYSE or by AMEX[14]. If the stock symbol is greater than three letters, then the company trades on the NASDAQ stokes[15]. Symbols with five letters ending in X are used for mutual funds. Many Asian countries use numerical or alphanumerical ticker symbols instead of characters to facilitate international trade. For example; 0005 is the ticker symbol of HSBC [Hong Kong]; D05 is of DBS Bank [Singapore]; 6502 is of Toshiba Corp [Japan] and 601998 is of China CITIC Bank Corp Ltd [Shanghai – China]
A Ticker symbol is a stock’s unique identifier for example, Ford motor company has a ticker symbol of ‘F’. When trading stocks or looking up on quotes, a ticker symbol is used to obtain the information on the company.
Ticker symbols offer quite a bit of information to investors who know what to look for when they see a ticker. In addition to identifying a company, a ticker may indicate the exchange on which a company is traded or if a company is currently undergoing bankruptcy proceedings. This symbol is chosen by the company when it begins to issue shares for public trading, and is used to track stock activity and place buy or sell orders by investors. These brief symbols are necessary to streamline the vast amount of activity information that flows through stock exchanges on every business day. Without the stock market ticker symbols, confusion and turpitude would govern the stock market.
A stock symbol, assigned to a listed company is the means of identifying that company’s securities, so that the member firms will be able to place buy and sell orders for the company’s stock and for the dissemination of pricing information regarding such securities transactions to the investment community[16] and thus to decide on where to invest.
Ticker Symbols are not trademarks but have all the salient features of brand name. The ticker symbol is a unique proprietary asset. It is a financial trademark. It stands as assurance to investors that buying a particular share will deliver a genuine share of a company’s stock.
When a company applies to be listed on a particular exchange, it can apply for particular tickers, provided that the ticker is freely available. It is always not necessary that the companies should select a ticker symbol for them, since the exchange can assign any symbol randomly. But, the companies in most of the cases suggest a ticker which closely resembles to their brand name. Since the brand names are common/ well known among the public, they can easily identify the stocks when they enter into the stock market. If the brands are famous and reputed the associated ticker will also help the company to attract more investors in the share market. In most of the cases ticker symbols are abbreviations of company’s name as seen in the examples given above. Some companies use their well-known product or brand name as their ticker symbol. For example South West Airlines use LUV which is one of their famous brand names as their Ticker symbol and BUD is the ticker symbol of Anheuser-Busch, the brewers of Budweiser beer which symbolizes its premier product.
A company’s brand name is its greatest valuable asset. The reputation of the company will closely connect to how famous its brand name/trade mark is. The greater the value of its brand names the more value can its share can acquire in the market. The share market performance of a company is closely related to its brand performance in the product market.
In strict sense, the ticker symbols have no connection with trademark, both operate in entirely different context. While, trademarks are used to avoid confusion to the general public as to the source of particular goods or services, ticker symbols are used to avoid confusion amongst the investors. If a symbol is assigned to a Company by a stock exchange, no other stock exchange can assign the same symbol to any other company. In that sense there cannot exist more than one similar ticker symbols for different companies. Similarly, in the case of trademark a mark is conflicting or similar to the existing mark is prohibited from registration by a third party. The ticker symbol is an international practice, whereas, trademark protection is national in nature. A unique trademark gives the consumer relevant information regarding the source of the goods and services, In a similar way, a unique ticker symbol will help investors to find relevant information about a particular company.
In trade mark, mark can be registered as a proposed to be used trade mark with a condition that the mark should be actually used within a fixed time period. Similarly, issuers are also able to reserve a symbol that they are planning to use in the near future. If a trademark is not renewed on time there is a six months grace period available to renew the same without any fine and another six months to renew the trademark with fine. If a ticker symbol is abandoned, there is a six-month waiting period before it can be reassigned. In the case of trademarks all these rights vest with the trademark Registry of each country, but in the case of ticker symbol the rights are vest with the issuer.
Trade marks were widely understood as primarily serving a source identification function. However, today, instead of monitoring a trade mark as a source of information about a product, a trade mark itself is observed as a product. A stock symbol is used in a non-trademark manner that does not conflict with trademark rights. However, companies invest substantial time, money and creative effort in developing an association in the mind of investors between the particular symbols under which they offer their securities/products, which thus entails to the protection of ticker symbol also. The investors look at the ticker symbol to trade in shares of the company. Its sole use is alleged to be with investors in the context of investing. In this, ticker symbol helps to build substantial significant investor recognition, trust, loyalty and goodwill. In trademark, if the confusion is among the customer, in ticker symbols the confusion is among the investors. If trademark differentiates one good from the other, ticker symbols differentiate one company from the other.
The economic issues involved in ticker symbol are very similar to those involved with trademarks. The courts have traditionally not permitted firms to trademark their ticker symbols as such[17]. The same economic considerations that led society to create trademark protection can be applied to the case of who should have the right to a particular letter combination for use as a ticker symbol.
The question to be considered is whether use of a company’s ticker by somebody as his trade mark can be permitted? Will it create any confusion to the general public? One view is that, since ticker symbols and trademarks are meant for entirely different classes of people there is no likelihood of confusion which is the most important condition for refusal of a trade mark. Another view is that, the consumers of the stocks as well as the goods may coincide in some or other way and in such a situation there is a chance that they will be confused or deceived by seeing similar ticker symbol and trade mark. The issue is to be addressed keeping in view of the object of trade mark law. The purpose of trade mark is to advertise the goods/services of a company and to help the consumers to differentiate goods/services from one company to other.
It is a general principle that a stock ticker symbol per se, does not function as a trade or service mark for that company’s products. Therefore, if a company uses some letter only as its ticker symbol, others are free to use it as their trademark, since the letters are not its main name or brand and he does not have a trade mark right over that letters. However, if the company apply this string of characters to its goods or services in such a way as to function as a distinctive indicator of the source or origin of those goods and services, then no one else can use the letter as his trade mark. These letters are likely to come to the attention of those who use ticker owner’s services or are aware of ticker owner’s symbol. If a company’s ticker symbol is an abbreviation of its famous brand name, then a third party using/registering it as his trade mark will be confusingly similar to the first company and hence is prevented from doing so.
The trade mark law, as it exist, is not designed to address the issue of confusion between ticker symbol and trade mark. The philosophy of trademarks and its infringement is different from that of Ticker Symbols. It is only when two trademarks are in conflict, the question of infringement arise. That is, the mark in issue should be identical or confusingly similar to a “trade mark or service mark” in which the ticker symbol owner have right; whereas it is a ticker symbol and a trade mark are in conflict. The question of a proper legislation to protect ticker symbols and its infringement occur here or provision should be made in the trade mark law to address the issues relating to the conflict between ticker symbols and trademarks.
The question to be considered is whether use of a company’s ticker by somebody as his trade mark can be permitted? Will it create any confusion to the general public? One view is that, since ticker symbols and trademarks are meant for entirely different classes of people there is no likelihood of confusion which is the most important condition for refusal of a trade mark. Another view is that, the consumers of the stocks as well as the goods may coincide in some or other way and in such a situation there is a chance that they will be confused or deceived by seeing similar ticker symbol and trade mark. The issue is to be addressed keeping in view of the object of trade mark law. The purpose of trade mark is to advertise the goods/services of a company and to help the consumers to differentiate goods/services from one company to other.
See “Guidelines for listing” on http://www.bseindia.com/Static/about/listsec.aspx?expandable=2, as on 7.10.2009
Ce site Web n’est pas destiné à être une source de publicité ou de sollicitation et le contenu du site Web ne doit pas être interprété comme un avis juridique. Le lecteur ne doit pas considérer cette information comme une invitation à une relation client.
© Droit d’auteur 2020 Altacit Global. All Rights Reserved.