Trade Mark Licencing

There are several ways to make money from a trade mark. The most common is a licensing structure, where you allow others to use or be associated with your trade mark. You would typically charge a fee, in the form of a royalty structure, which varies depending on the scope and scale of the third-party use of your brand.

You can also use your trade mark to grow the reputation of your business, the geographical reach or the intensity of the brand presence in your existing market. The more people who know or recognise your brand, the more valuable it is, the better the sales conversion rate and the higher the likelihood of securing investment into your business.

If you choose to sell your business, the greater and more consistent use which you have made of your trade mark over the trading period is likely to have a positive impact on the value given to the goodwill in the business and therefore the associated value attributed to the company.

Businesses of all ages and stages can benefit from brand protection. As the digital presence of every company becomes more important and the proportion of internet sales increases, businesses have to be more proactive about ensuring there is no consumer confusion in the market. Consumer confusion is more likely to arise if two companies have the same or similar names, logos or general brand appearance.

It is also useful for established businesses to protect their brand as there is generally a positive correlation between success and the appetite of third parties to infringe and attempt to capitalise on that success.

Finally, if you intend to seek investment or sell the business, the question of trade mark protection will inevitably arise in any due diligence exercise carried out by the prospective investor or purchaser.

Having a registered trade mark gives you an identifiable asset for the goodwill built up in your company brand. The greater the value that your customers attribute to your business and the stronger the brand loyalty that exists, the better. When investment is sought or a business is sold, the value assigned is typically a combination of the physical assets in the business, together with the perceived value of goodwill that attaches to the company and its reputation. Goodwill can go up and down as public relations fluctuate and the market changes, but a registered IP asset can help weather these fluctuations and capture the value which builds up in your brand.