As we embrace increasing digitization, it’s important to consider how technology is reshaping our world. Increased online activity is great for companies hoping to quickly and cost-effectively gain notoriety and influence; after all, it’s much easier for brands to reach larger national and international audiences via the web and social media platforms. But the additional exposure creates risks, making brands more susceptible to trademark disputes.
Trademarks are used to differentiate a company’s products and services, and can serve to protect a logo, name, phrase, design, or any combination of these elements. They are, essentially, your brand. Your reputation. And while it’s understandably an imperative for any marketing department to promote the brand as widely and loudly as possible, ideas take on a life of their own in the virtual world. Concepts are shared and, much to our dismay, embraced by competitors. This occurs at a dizzyingly fast pace and, without established trademarks, can leave the individual or company who pioneered the concept at a huge disadvantage in the marketplace. There’s nothing worse than coming up with a perfect way to brand an offering, only to have that competitive edge snapped up and exploited by someone else with more marketing resources and budget at their disposal. This can obviously hobble a company’s ability to sell its products, grow, and thrive.
The truth is, however, that even when a company does take the appropriate steps to protect itself with trademarks, it’s often not enough. Intellectual property disputes have become a disturbingly common occurrence, and seem to be an unavoidable byproduct of digitization.This isn’t to say that businesses shouldn’t bother to trademark. Quite the opposite is true. Businesses should trademark, and then seek valuations of their trademarks. This is because trademarks are more important than most people think. They’re the brand and the reputation, yes, but they’re also a company’s industry standing and its ability to effectively sell its services.
Trademarks serve as valuable intangible assets, making them an important component to a company’s worth. Economists largely agree that intangible assets like trademarks, brands, intellectual property, and licenses now account for the lion’s share of a company’s economic value, and they represent key performance drivers in our evolving knowledge-based economy. This means that in order to understand the current value and success of a company, it’s critical to not only have trademarks and patents in place, but to perform a valuation of the assets. This helps a company assess its competitive advantage, and also helps to protect it, because understanding the value of a trademark makes it possible to quantify the stakes in any legal disputes that may arise.
Trademark valuations help protect brands by providing evidentiary support of value. The exercise also helps management teams understand valuable business information that can help set future strategy, including: the historical records and financial projections associated with the trademarks, name recognition, advertising expenses and results, competitive landscape, and more. Trademark and intellectual property valuations help assess a business’s current market value, and provide key insights on how to increase the value over time. Valuations are also a common requirement for mergers and acquisitions, bankruptcy proceedings, trademark sale and/or purchase, tax reporting, litigation support, and determining royalty rates for licensing purposes.
Trademarks are how you communicate with the world, how clients find you, and how others assess you. Ensuring that you’ve done all you can to secure your trademarks is a necessary step to take for your business. And because trademarks can appreciate in value over time, consider seeking periodic valuations as a way to measure long-term growth.