Trademarks, which are a branch of intellectual property, play a big role in brand management and other vital aspects of the business. A trademark is a word, shape or sign that distinguishes your goods and services from another.
Brand management involves promotion of goods and services. It therefore involves a lot of marketing campaigns. Trademarks enhance brand promotion as they accord legal protection. Trademarks add to brand valuation. There are financial experts who are able to undertake valuation of a trademark for reporting.
Trademarking your brand will also assist you in protecting its reputation through enforcement mechanisms. There can be no action against an unregistered trademark which means that no matter how well known your brand is, you cannot enforce a claim on it if the mark is unregistered.
Trademarks enable enforcement against infringers and at times counterfeiters. Infringement occurs where a third party without authority, passes off the trademark as their own with the aim of confusing the public as to the identity of the owner. Infringement has been known to eat into the market share and profit of a brand as any sales made from the infringing product do not belong to you. When a trademark is enforced some of the court orders include getting injunctions stopping the infringer from continued infringement. Other orders that one can get include anton piller orders and delivery up.
Well known protected brands undertake an aggressive enforcement of trademarks globally. This litigation strategy helps to maintain their brand reputation.
Trademark is also a useful key in corporate finance transactions. In franchise deals, trademark issues are one of the key considerations in contract negotiations. The franchisee is expected to use the trademark of the franchisor but under certain terms and conditions. Some franchise transactions involve licensing the franchisee meaning that it will use the trademark as per the terms in the licence contract, while at the same time paying royalties for usage of the trademark.
Trademarks are a key negotiation issue in joint venture transactions where two or more parties agree to jointly form a company to undertake a particular project. In most cases, one party is a financier whose main interest in the business is to provide finance for the venture while expecting a return. This may be in form of fixed dividends or a payout at the end of the term of the venture. The other party may be a person who holds a concept or the technical know in running the venture. Trademark issues come in where this second party has any intellectual property right ownership over subject matters relevant to the venture. This party may be required to assign or transfer intellectual property rights into the joint venture. At times, his intellectual property contribution may be valued and capitalised to form part of the nominal financial contributions into the venture business.
It is critical for your business to not only secure intellectual property rights, but also to have sound intellectual property strategies. A lot of revenue is lost when a business does not have intellectual property strategies.