Brands as a Legal Asset

Brands as a Legal Asset

Intro­duc­tion

Brands are an intel­lec­tu­al prop­er­ty asset. Unfor­tu­nate­ly they rarely appear on a company’s bal­ance sheet. As a con­se­quence, brands may often be inad­e­quate­ly iden­ti­fied, val­ued, pro­tect­ed and exploit­ed. Bear­ing this in mind, it is wise to insti­tute a pro­gram to pro­tect and nur­ture your brands.

Iden­ti­fi­ca­tion

It is impor­tant to car­ry out a reg­u­lar stock­take of your brands. All your brands should be exhaus­tive­ly list­ed and their own­er­ship ver­i­fied. It may be that some of your brands are owned by now defunct com­pa­nies. It may be that the copy­right in devices and images con­tained in your brands actu­al­ly vest in the adver­tis­ing or design agency who cre­at­ed them. If you are using any brands under licence to third par­ties, you should ensure that you are com­ply­ing with the licence terms.

Val­u­a­tion

Brands are often seri­ous­ly under-val­ued by the com­pa­nies who own them. It is impor­tant to remem­ber that brands not only pro­vide increased sales, they can also deliv­er those sales at a pre­mi­um price. The effect of a strong brand on your company’s prof­itabil­i­ty can be cru­cial. For this rea­son, the best way of valu­ing a brand is to assess the long term effect on com­pa­ny prof­itabil­i­ty should that brand be lost. 

Pro­tec­tion

The essen­tial way to pro­tect brands is to reg­is­ter them as trade marks. All dis­tinc­tive brands should be reg­is­tered for all the goods and ser­vices for which they are used or like­ly to be used. Brands should be reg­is­tered as trade marks in all coun­tries in which your com­pa­ny oper­ates or intends to oper­ate. Many peo­ple believe that the reg­is­tra­tion of com­pa­ny names and busi­ness names on the rel­e­vant reg­is­ters pro­vides them with effec­tive own­er­ship and pro­tec­tion of those names. This is not the case. Com­pa­ny and busi­ness name reg­is­tra­tions pro­vide no pro­pri­etary own­er­ship of those names. The only way to obtain pro­pri­etor­ship in com­pa­ny and busi­ness names is to reg­is­ter them as trade marks. It is strong­ly advis­able to set up a brand book spec­i­fy­ing the lay­out, font and con­tent of your brands. In this way, you can ensure that your brands are con­sis­tent­ly rep­re­sent­ed to your mar­ket. You should reg­u­lar­ly mon­i­tor your brands to ensure that your trade mark reg­is­tra­tions are updat­ed and renewed. 

Exploita­tion

Once you have iden­ti­fied, val­ued and pro­tect­ed your brands, you are then in a posi­tion to exploit the poten­tial in those brands. Here are a few exam­ples of how you may gain real ben­e­fit from your brand portfolio:

(a) Adver­tis­ing – treat your brand adver­tis­ing as an invest­ment rather than an expense. A brand actu­al­ly increas­es in val­ue through use. The major world brands have achieved their com­mer­cial val­ue through pro­longed, con­sis­tent and exten­sive advertising.

(b) Pric­ing – if your brand is valu­able, ensure that your cus­tomers pay a pre­mi­um for that brand­ed prod­uct or ser­vice. You should nev­er com­pete on price with your brand against a gener­ic prod­uct. The fun­da­men­tal val­ue in a brand lies in the price pre­mi­um and image it commands.

© Brand Strat­e­gy – you should devise a brand strat­e­gy for your port­fo­lio of brands. For exam­ple, if you own a well-known brand, this can be used as an umbrel­la for a series of sub-brands which draw off the per­ceived mar­ket val­ue of the main brand.

(d) Licens­ing – you might con­sid­er licens­ing your brand to third par­ties who may be in a bet­ter posi­tion to exploit your brand in cer­tain mar­kets. All such licens­ing arrange­ments should be the sub­ject of strict­ly word­ed legal agreements.

The Legal Dimension

The first step in devel­op­ing a com­pre­hen­sive brand strat­e­gy is to con­sult your intel­lec­tu­al prop­er­ty lawyer to assist you in iden­ti­fy­ing and pro­tect­ing the intel­lec­tu­al prop­er­ty in your brands. Once these safe­guards are in place, you can set forth to exploit your brands to the full. Swaab Attor­neys can offer you a free IP Health Check to start you on your way to a prof­itable brand strat­e­gy. You are wel­come to give us a call at any time.