Executives often underestimate the value of their marketing tools when assessing their company’s worth. Indeed, the brand under which a company’s products or services are offered is often overlooked by the company in favour of the products or services themselves. This mind set can result in expensive mistakes and lost opportunities, particularly in the context of asset valuation, dealing with aggressive competitors, or even assessing the return on an advertising campaign.
The worth of a trade-mark can be as high as the value its owner places on it. A trade-mark can be a word, logo or design that distinguishes your company’s products or services from those of your competitors. In addition, few people know that a trade-mark can also be applied to a particular shape or mode of packaging your products such that your customers recognize your products by simply seeing them on the shelves, even if they can’t read your name on the label.
Trade-marks, when properly used and protected, can add tremendous worth to your enterprise and can be both used as a marketing tool which gives you an advantage over your competitors and considered a valuable asset by your lending institution. In fact, in addition to awarding you a monopoly on the use of the trade-mark in relation to your products and/or services, a trademark can generate income in the form of licensing revenues, serve as collateral for securing loans, and be an important asset when valuing a company for the purpose of a merger, acquisition or equity financing.
The worth and level of protection of a trade-mark often depends on how its owner has used it and whether it has been registered. Indeed, a trade-mark need not be registered. For example, an unregistered word or logo that has been used extensively in relation to a particular set of products or services can function as a trade-mark if the owner can prove that the public uses the word or logo to distinguish its products or services from those of others. However, these unregistered trademarks are often difficult to enforce and/or value, because the owner must first prove that the trade-mark has reached the required level of distinctiveness, an exercise that is often imperfect and expensive, particularly as a survey to prove the public’s knowledge of the trade-mark may be required.
On the other hand, the simple exercise of registering a trade-mark with the Canadian Intellectual Property Office provides numerous advantages which far outweigh the costs of registration, which in any event are quite low. The registration of a trade-mark in Canada creates a presumption of validity of the trade-mark such that its owner need not expend the time or resources in first proving the public knowledge of the mark. In addition, a registered trade-mark provides its owner with a Canada-wide monopoly on the use of the trade-mark, or any confusingly similar trade-mark, in relation to the wares (products) and services with which the mark has been registered and used. An unregistered trade-mark only has value in the territory in which it has been used; therefore, a Canada-wide monopoly can rarely be enforced, which means that the mark is devalued compared to one with a nation-wide ambit of protection. Other statutory benefits of registration exist as well, all of which can benefit an owner both in terms of stopping infringers, but also indirectly in assessing and often increasing the monetary value of the goodwill associated with the trade-mark in the preparation of financial statements or otherwise. In conclusion, do not underestimate the worth that a registered trade-mark can add to your
company’s portfolio. We can help you gauge the value of your marketing or branding initiatives by assessing the distinctiveness of your existing or proposed trademarks, and by advising you on the best registration strategies to employ to maximize the future benefits to your company.