PROTECTING CREATIVE BUSINESS CONCEPTS

12.10.2018

Not Just Insurance: Your Trade Mark is a Valuable, Leverageable Asset

Some business owners view trade marks like insurance – something they know they ‘need to do’ and it can feel as though you’re spending funds on something that sits quietly in the background without showing any immediate return on investment.

What if we told you that securing your brand as a registered trade mark constitutes a valuable asset for your business? You might then consider it not just as business protection or risk-mitigation, but as an integral part of your business that has actual value – something that can be sold in future.

Registering your distinctive brand as a trade mark will defend your brand’s or product’s identity from imitators. Registering a trade mark is also the only way that you can obtain exclusive rights to a brand, and integral to being able to legally enforce and capitalise on the uniqueness of your idea, of what you’ve created.

A registered trade mark can be your most valuable marketing asset, and it can increase the value of your business. Here’s how:

1. What one does not have, cannot be valued!

When it comes to the stage where you may be considering selling your business, you’ll be valuing your tangible assets such as your business’s equipment, real estate and stock on hand. You’ll also be valuing your intangible assets, which include the goodwill and brand recognition you have built over the years, and also your intellectual property, which includes copyright, trade marks, patents and registered designs.

Trade marks make up a valuable part of your intangible business assets that will add value to your business at sale. Although the actual value can be hard to quantify, your accountant and/or business consultant will have a range of techniques that they’ll use to assign a value to these intangible assets.

If you don’t have trade mark registration, however, it can’t be valued! The longer you have a trade mark, and the more you lay claim to it by giving it prime position in your marketing, packaging, etc, the more valuable it becomes.

2. For Lease: Commercialise your Trade Mark through Licensing

As the owner of a registered trade mark, you have the right to lease or license your mark to a third party, for royalties.

Licensing can be a lucrative business strategy and can allow expansion of your brand into new markets through new products. There are many different types of licensing arrangements, the most common of which are merchandising partnerships.

Trade mark registrations can be cancelled if the owner does not use the trade mark within a certain timeframe and licensing can be a good way to comply with this usage requirement and maintain ultimate ownership of your trade mark. Licensing gives you more flexibility and greater growth opportunities.

Due diligence is essential when looking for potential licensees – you’ll need to be able to confirm (and prove, if necessary) that the licensee has the necessary skills and financial capacity to use your trade mark in a commercially beneficial way.

3. How Good do you Look to Investors?

Investors are always on the look-out for great ideas that can make them money – your successful brand or idea could be one of them! These are savvy business people and they know that a business that has protected its intellectual property is more likely to maintain a competitive advantage and less likely to attract risk.

As a business seeking investment, remember that you’re competing with other businesses seeking investment – those that have protected their intellectual property will get a look in. Those that don’t, lose bargaining power and may not even be considered by investors as it is simply too risky to invest in a business that is at risk of being legally copied or imitated.

Check out our article on this topic.

4. You can make more money by being strategically competitive

Your brand embodies the philosophies of your business and product offering, and distinguishes you from others in the marketplace.

Registering your distinctive brand as a trade mark gives you exclusive rights over the use of that mark, for the goods and/or services under which it was registered.

What does this mean? Apart from the commercial aspects above, owning your brand as a registered trade mark means that no other business, person or entity can capitalise on what you have developed and built equity in. Moreover, it means that third parties would be encroaching on your rights even if they used brand names and logos that sound aurally or look visually similar to your registered trade mark.

The earlier in your business development journey you register your trade mark, the better you’re positioning your business for competition and equity growth.

We can help you with the best strategy for registering and enforcing your brand as a trade mark – simply get in touch.

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