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The Value of the Trade Mark

The Value of the Trade Mark

by Darren T. Olivier

To many the trade mark is simply a document that records a business name at the local trade mark office. It’s not compulsory and it takes so long to obtain, that it is frequently dismissed as an irritation. Ok, it’s relatively cheap but why else should one pay more attention to our friend, the registered trade mark and those who look after it within the business?

Well, in short, it is the title deed to your brand. Your brand is, of course, everything that encapsulates and communicates your business, everything that keeps customers coming back. It may be a name, it could be a slogan, it could be colours, it could be three dimensional, it could even be a smell and all of these are capable of being registered as trade marks.

Ok, so what’s the fuss? Well, properly obtained, these title deeds can be listed in your asset register. They can be valued, used to raise finance and sold separately from the business. They can be let for cash or be allowed to sit passively, preventing others from communicating their offerings in a number of ways. They protect the value generated by your brand. They protect market share both actively (in the hands of an attorney) and passively (just by sitting on the register).

But just like a Verimark ad – that’s not all! The trade mark can be attached in legal proceedings to enable jurisdiction of South African courts or they can be used to transport goodwill into a diversified space that may just provide a hedge for your business, or enable it to grow. They can also be transferred to enable efficient tax planning or to reduce the exposure of assets to business under duress.

Brand protection using a registered trade marks is at least a 50% less costly than using alternatives methods such as passing off, and there is significantly less risk to the proceedings. It’s a defence to a trade mark infringement thus minimising the risk of the dreaded urgent court order for a product withdrawal and, in the growing social media space, the registered trade mark is frequently the only method of safely removing hijacked or rogue sites aimed at discrediting your business or holding it to ransom for a fee.

Still not convinced, consider the recent ISO standard (ISO 10668) for brand valuation which requires an audit of the legal protection of a brand as a fundamental step in its valuation. Skype’s IPO which disclosed an everyday opposition against BSkyB as a material threat to its brand, illustrates the correlation between proper trade mark management and the value of the business.

So, the next time you find yourself assigning an office admin to look after a seemingly endless list of trade mark enquiries and small bills, or dismiss them as an irritant, please stop and reconsider. They protect probably the most important asset in your business.