Understanding IP: What’s So Valuable about Your Brand?



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Understanding Intellectual Property IP

At The Brand Protected®, we work with business owners, creators, and innovators of all kinds. Time and time again, we’ve seen the financial benefits of brand protection and the serious repercussions of the failure to do so.  That’s why creating and protecting your brand assets is at the heart of what we do. However, despite all of our warnings about the importance of brand protection, we often get asked this simple question:

What’s the point of protecting my brand, anyway?

Honestly, it’s a great question, and it’s often one that gets overlooked in the technical aspects of intellectual property law. So, let’s start there: what’s the point?

Your Brand May be the Most Valuable Asset Your Business Owns

In any industry, a business’ brand is one of its key assets. A brand, as we’ve discussed in earlier articles, is central to the success of any business because it is the tool of communication between the business and its customers. A brand image is a powerful tool for marketing and promoting a business’ offerings and building a reputation. Consumers use trademarks, and the business reputations associated with these marks, to make purchasing decisions and develop brand loyalty. Because of this significant association between a brand image and real consumer dollars, the true value of a trademark is enormous. However, can that value really be quantified?

Trademarks Hold Real Monetary Value

Often, the conversation around the value of intangible assets is purely theoretical. We know that our brand has some value, maybe even enough to take steps to protect it, but we don’t know the real monetary amount of its worth.

So, how do we determine the value of our brand and the trademarks, and other intellectual property,  associated with it? What would they sell for? How can they be leveraged for future business growth? It’s actually possible to appraise and determine the exact value of your trademark, and there is a whole industry around appraising and valuing IP. For example, trademarks, like any other property asset, can be bought, sold and loaned. In contract negotiations for licensing, acquisitions, assignment, or loan securities, this real number is important to know. For your own business, however, it may be enough to approximate your trademark’s value, for example, by looking at some key factors:

  1. Trademark’s Earning Power. If there is no distinct income history for your mark, it may be more difficult to value. However, you can look at industry studies, opinions of industry experts, and market surveys.
  2. Trademark’s Resale Value. How much would another company pay for you to assign the ownership rights and interest in the trademark?
  3. Licensing Power. What would you charge another company to license the use of your trademark while you maintain ownership?

Often, the true value of a trademark is the goodwill associated with it. If a brand is particularly trusted or attractive to consumers, other businesses will want to use it or acquire it. What they are willing to pay for the use or assignment of that mark is an important key to valuing a trademark.

What Should You be Doing Now to Build Value in Your Mark?

Once you have created and trademarked your brand assets, what do you do? How can you build value in your mark to boost the overall value of your business?

  1. Trademarks appreciate in value over time. The more you grow your business reputation, the more valuable your brand will be.
  2. One of the best ways to boost value in a trademark is to use it (the USPTO required it). If goodwill and brand recognition increase a trademark’s value over time, it makes sense that the more you get the brand out in the marketplace (while continuing to serve top-quality goods or services), the faster your brand’s value will appreciate. Utilize social media and other virtual outlets to this end: your audience is far broader and more likely to associate brand loyalty with your business when they see your mark consistently.
  3. You have heard us say it before, but make sure your trademark is protected. For such a valuable business asset, it is relatively inexpensive to secure and insure: about $250 for a trademark registration application. Just do it!
  4. Trademarks don’t expire as long as you use them in commerce (and keep up with the registration), so again, make sure that you are using your brand marks out there in the marketplace.
  5. If you do choose to license your marks with another business (allow another party to use your mark in commerce), always make sure that you do so using a licensing agreement. Most importantly, ensure that this agreement has a specific provision for “quality control.” Because trademark protection rests on the connection between the mark and the specific goods or services being sold (as distinct from the goods or services that come from any other business source), the trademark owner/licensor must retain control over the quality of the goods or services produced under its trademark, even if they are being provided by another company (the licensee). Failure to provide for and maintain this control can result in a weakening or even a loss in trademark protection.



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