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Registering a Trademark

Registering a Trademark to Protect & Profit in your Business

Registering a trademark is an essential step for a business to protect their brand and to profit from their business growth.

Registering a trademark has three benefits:

  1. protects your brand name, and can protect the brands of any of your products
  2. can generate profits in its own right
  3. it can be a balance sheet item

What is a Trademark

I assume that you already know what a trademark is, but for a more formal  definitiona “A trademark is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise.”  (Source: World Intellectual Property Organisation – WIPO,  http://www.wipo.int/trademarks/en/about_trademarks.html#function )

Its origin dates back to ancient times, when craftsmen reproduced their signatures, or “marks” on their artistic or utilitarian products. Over the years these marks evolved into today’s system of trademark registration and protection. The system helps consumers identify and purchase a product or service because its nature and quality, indicated by its unique trademark, meets their needs.

A trademark provides protection to the owner of the mark by ensuring the exclusive right to use it to identify goods or services, or to authorize another to use it in return for payment. The period of protection varies, but a trademark can be renewed indefinitely beyond the time limit on payment of additional fees. Trademark protection is enforced by the courts, which in most systems have the authority to block trademark infringement.

So a trademark is by its very nature used to provide legal protection to your brand by, through legislation and treaties, providing the owner of a mark the ability to determine how it is use, who can use it etc.

Profits and Trademarks




registering a trademark



Trademarks can themselves be sold (’assignment’) or loaned (”licenced”) for a benefit.  The term ‘benefit’ is used because not in all cases does the trademark owner want money for their mark but may seek to be rewarded by exchange of goods, services or other means.  For the business owner who owns a trademark the mark itself is valuable, particularly if the owner is seeking to expand or franchise their business to other locations or interested parties.  In many cases the value of a franchise is dominated by the value of the brand which is protected by a trademark (or in most cases a series of interlocking trademarks).





Trademarks as Assets
Trademarks are recognised under Generally Accepted Accounting Principles (GAAP) under the Statement of Financial Accounting Standards (SFAS) No. 142 as intangible assets.   These generally align with International Accounting Standards IAS’38 for intangible assets.

The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another International Financial Reporting Standards. ISA 38 requires an entity to recognise an intangible asset if, and only if, certain criteria are met. It  also specifies how to measure the carrying amount of intangible assets and requires certain disclosures regarding intangible assets. This standard states that: an intangible asset is a) identifiable eg a registered trademark, not just goodwill, b) non-monetary asset, and c) does not have physical substance.  Initially an intangible asset is initially measured at cost and after initial recognition then you can use either 1) a cost model or a 2) a revaluation model accounting methodologies. (Source:  http://www.ifrsclass.com/gaap/ias/ias-38.htm )

Essentially, internally developed trademarks are not generally recognised by accounting standards but trademarks that are purchased from another business are able to be included in financial reports as balance sheet items.  The lesson – as business owners you should get good professional accounting advice in respect to trademarks.

So, if you are buying companies and their accompanying intangible assets – then trademarks are an extremely important part of the valuation and accounting treatment of the initial acquisition and ongoing operations.

So you may have thought trademarks were something that you needed to think about in your business (either starting one or as an existing business)  but now you know that registering a trademark is really important.

Registering a trademark – Next Steps
Your next steps?  The next steps to registering a trademark are:

  1. identifying the trademark(s)
  2. doing a trademark search
  3. trademark filing
  4. using the trademark effectively

Sounds complicated?  Engaging a trademark professional should be considered as they can:

  • do a deep trademark search
  • assist in your trademark filing

But you need to do the first and last steps.   btw, trademark filing is the process you do in registering a trademark.

Good luck in your plans to registering a trademark.  Patrick

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