29.12.2017

Trademark registering increases the value of company

Essential base for trademark’s value is its registering and its geographical coverage.

Although trademark rights could exist also without registering, that is regularizing use of the trademark in business, leaving the trademark unregistered may cause some value losses, because their protection is low compared to other, registered trademarks.

It has to be proved that regularizing has occurred, registering proves the trademark rights without a need for extra proofs.

The value of trademark in corporate acquisition

The value of trademark transferred in the company acquisition depends on many factors.

The prize of immaterial rights is predetermined by how much people are ready to pay and what is their relation to business, risks and possibilities. There is no absolute value on the trademark and other IPR- property.

It is important to analyse the IPR-portfolio in M & A of a company, both from the buyer’s and the seller’s side, and you should pay attention to

  • the owners of the rights
  • analysis of lifespan of the rights
  • the exhaustively and strength of protection
  • what are the risks coming outside (for example a possible trial)
  • what different kinds of agreements and possibilities will be part of IPR (for example licensing)

It is easier to defend registered trademark

Protecting and supervising the value-related rights of trademarks need more and more resources in the net. The Internet has increased the risk of trademark violations significantly.

It is significantly more efficient to defend registered trademarks and investments on them towards malpractices than to defend same things of unregistered (regularised) trademarks. Organized controlling of trademark rights in the market is an essential part of maintaining and increasing their value.

The value of trademark is naturally growing when the business grows. The developing reputation of the trademark might make financial utilization possible also outside rights holder’s core business.

It is reasonable to envision to which goods and service classes trademark utilization can expand in the course of time and register the trademark in advance to cover those branches, too.

Determining trademark’s value

Trademarks are in the best case comparable to real property. You can buy, sell, rent, license and use them as collateral for business loans.

In practice, the versatile financial utilization in business requires trademark registering in geographical and class-based extent.

Unambiguous methodology for defining trademark’s, wider the brand, value does not exist. The standard ISO 10668, which is the brand value standard, defines different methods and displays important elements for measuring the brand value. According to the standard it is possible to create detailed methods for measuring the brand value. The value of the brand does not consist only of financial numbers, or marketing knowledge and people’s opinions.

Comprehensive vision will be needed in defining the value of a brand, e.g.

  • financial characteristics
  • trade and customer survey data
  • legal justification of the brand

Well-planned use of the trademark, protecting and supervising the rights make trademarks long lasting and increases their value.

The starting point in efficient protecting of trademark is to register it geographically extensive enough and to ensure that the trademark classes will also be adequate.

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