29 January 2013

Reputation is a crucial element for any business to succeed and generate profit. Like many other valuable assets it would be prudent to afford some protection to this intangible property.

One of the most effective methods is through a registered trademark. Many business have doubts over the benefits of such an investment as it is unclear what advantages may be obtained. This is due to the intangible nature of the property. However, by failing to protect this vital asset the foundation of a company can be stripped away allowing others to reap the benefits of your business’s hard earned reputation. An example of the value of such trademarks can be seen in the worth of Cocola and Microsoft, whose brand names are valued at $65 billion and $58 billion respectively.

The law relating to trademarks in the UK is governed by the Trademark Act 1994. A trademark can range from a slogan to shapes or more commonly a brand name. It is essentially any mark capable of being graphically represented which identifies any goods or services.

Once a trademark is registered, the owner is able to gain a form of property right to an otherwise intangible asset (business reputation). This right grants the proprietor a statutory right against infringers, which is much cheaper and easier in comparison to the tortious alternative remedy of ‘passing off,’ which will generally require time consuming and costly litigation.

However, the benefits of a trade mark do not cease on protection. Trademarks are capable of forming assets worthy of investment. As already stated a Trademark is property which means it can be bought, sold and licensed in the same way as any other physical property. Therefore a trademark can also be viewed as a vehicle by which to sell your business reputation which would otherwise have been a valuable yet unquantifiable (and therefore unsellable) asset.

An example of how intellectual property can be a significant factor to profits of a business can be seen in the acquisition of the company Palm by Hewlett-Packard. Palm was acquired for a total of $1.2 billion which is a considerable amount for a company that was viewed by many as falling behind its competitors. (Palm was a Smartphone manufacturer that took a heavy blow when the Iphone hit stores). Analysts believe this is attributable to the impressive portfolio of intellectual property owned by Palm, which Hewlett Packard views as essential to its development over the coming years. Without building this IP portfolio, Palm may have continued to struggle and this acquisition may not have taken place.

In conclusion a trademark is an essential investment for any business who wishes to preserve their reputation. Many businesses fall into the trap of believing that because there is no physical property there is no value. As can be seen from companies such as Red Bull whose brand name is estimated at $1.7 billion (a value which is thought to be able to stand alone if the company were to cease trading its namesake high energy drink), this could not be further form the truth. It should be noted that a trademark is just one of many methods used to protect a business’s intellectual property and should be regarded as a layer of defence as opposed to just one solution.

Gepp and Sons are able to advise on trademarks and many other effective methods to protect your business's intellectual property.

For additional information please contact Justin Emerson of Gepp & Sons on 01245 228113 or

The above is not legal advice; it is intended to provide information of general interest about current legal issues.