6 Ways a Trademark Increases Your Company's Value

Trademark
6 Ways Company a Trademark Increases Your Company's Value

A unique brand identity is one of the most valuable assets that a company can have. But it's also one of the easiest assets to lose.

The earlier you can assure ownership of your brand identity, the better—and one way you can do this is through trademark registration.

What is a Trademark?  

A trademark is any word, phrase, symbol, design, or combination of those elements that identifies and distinguishes the source of the goods you offer.   

When you register your brand as a trademark, you are essentially claiming exclusive rights over its name so that no one else in your industry can use it, or a similar mark, without your permission. This can help you increase the value of your company, gain legitimacy and competitiveness on the market, and benefit from legal protection in case infringement occurs.  

The Value of Company Trademark Registration 

Trademark applications soared above 13 million in 2020 alone, according to the World Intellectual Property Office (WIPO). With more and more companies launching every day, it is no surprise that businesses are scrambling to get their brands officially registered.  

Registering your brand with a trademark office is not a legal requirement, but it is a smart move. Here are some benefits of trademark registration and how it adds value to your company. 

Benefits of Trademark Registration 

A Trademark Gives You Legal Protection   

Perhaps the most important benefit of registering a federal trademark is that it makes you the exclusive owner of the mark in your geographic area, or in other areas where you register it. When you have trademark protection, no one else will be able to register that same mark or use it on their own products or services without your permission. 

If someone is using your mark without your permission, trademark law gives you the grounds to sue them for damages and seize any infringing goods. If they have the potential to cause losses for your business, you can also prevent them from continuing to use the mark. This strengthens your brand and can save you from future cases of trademark infringement. 

A Trademark Helps Establish Quality Standards   

Trademarks have a long history of communicating quality to the public. A registered trademark, denoted by the ® symbol, indicates that your company has done the hard work to build a reputation for quality products or services, and those efforts have been rewarded with valuable intellectual property rights in the form of a registered trademark.   

When your customers see a registered trademark symbol on your products or services, they immediately associate them with high quality and come to trust your business every time they shop from you. This builds customer loyalty and repeat business.    

A Trademark Builds Brand Equity   

Brand equity is the value of a brand, based on consumers’ perceptions: it is the amount of money consumers would be willing to pay for your product or service based solely on its reputation.   

For example, if you were to create two identical products except for the fact that one was labeled with the Coca-Cola® mark and the other with an unknown mark, consumers would likely be willing to pay more for the marked product. They know they can trust Coca-Cola®, so they will be willing to pay a premium for it over something untested and unknown.    

80% of your company value is determined by the strength of your IP assets.To investors and lending institutions, strong trademarks mean strong brand value. They know that when they provide capital to a company's growth strategy, they stand to gain returns on their investment if the company's already successful reputation is built upon by protecting its intellectual property assets as part of an overall brand management strategy.  

A Trademark Can Be a Source of Revenue   

A registered trademark can also be used as an additional revenue stream for your business. You can make money off your mark by making it available for licensing or sale.   

When you license your brand so other companies can use it on their products, you gain access to a new market for your product. This can be an incredibly lucrative way for brands to expand their reach and make more money. For example, if you own a clothing brand called Life Is Good, then you could license its image to a local brewery so they can sell Life Is Good branded beer. 

You can also generate revenue by selling your mark outright. If you think you might want to sell your company, then a strong brand will make it easier for you to do so by making it more attractive as an investment opportunity. 

A Trademark Builds Goodwill with Customers   

Trademarking can help build familiarity and trust with customers when you use it consistently. When third-party sellers use your mark, your customers will know they're getting goods or services from an authorized dealer who meets your standards. 

To get the most out of your registered trademark, use it in marketing materials and on social media so potential customers can easily recognize your brand and its quality. This helps you build a recognizable identity that minimizes the likelihood of confusion among customers who are looking for goods or services like yours, and helps protect brand reputation. If customers keep seeing the same name when they look for goods or services, it becomes easier for them to identify your company as an authority in its field. 

Registered Trademarks Have an International Effect   

Trademarks have an international effect. With one global registration with the World Intellectual Propert Office (WIPO), you can reserve the right to use your brand name or logo anywhere in the world. This carves out unlimited possibilities for your business' growth and expansion.   

If you operate in only one country, you can license your mark to others for use in their country. That way, they can build your presence abroad and keep the momentum going while you focus on growing your business locally.   

The Bottom Line   

Trademarks are more than just a name or logo—they're an important part of your company's brand and identity. By registering your trademark, you can solidify your brand, build customer loyalty, generate new revenue streams, and expand your business internationally. All of these factors contribute to the value of your company.   

Whether you're just starting out or have been in business for years, it pays to invest in registering your trademarks. 

 

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