Intellectual property, commonly referred to as IP, is a form of legal protection that applies to creations of the mind. As such, it covers ideas, inventions, literary and artistic works, designs and symbols, names and images and even processes. These legal protections are granted to creators, giving them exclusive rights over their creations to use their works for their own benefit or to license them for a fee. These rights allow creators to benefit financially from their work by preventing others from using it without permission. Further, IP laws are designed to encourage creativity and innovation in the marketplace by providing incentives for creators. More importantly, however, they ensure that others cannot copy or use these works without permission from the creator.
There are several types of intellectual property, including patents, copyrights and trademarks. Let’s quickly explore.
- Patents: Patents protect products, ideas, and designs for 20 years.
- Copyrights: Copyrights protect literary and artistic works for the lifetime of the author, plus 70 years.
- Trademarks: Trademarks are uniquely different than patents and copyrights. You see, unlike patents and copyrights, trademarks do not expire after a set period of time. Rather, they persist so long as the owner continues to use the trademark.
After a trademark application is granted by the United States Patent and Trademark Office (USPTO), and the owner obtains a registered trademark, that trademark must continue to be put to use in ordinary daily commerce to ensure its retention. As long as this requirement is met, which is satisfied by a Section 8 Declaration in year 5, proving that the mark is still in use, along with photographic evidence provided every 10th year anniversary of the registered mark, then a registered trademark can essentially provide virtually a lifetime of protection.
As such, a trademark is a valuable asset for any company and provides the following benefits:
- It adds value to the business and helps differentiate their products and services from competitors, thereby providing a unique identity and recognition to the brand.
- It gives businesses legal protection against competitors and protects their brand from infringement and counterfeit products by providing an exclusive right to use a name, logo, phrase, or design, that distinguishes the products and services of one company from another.
- It provides recognition and credibility to the company and serves as a reminder of quality, since customers are more likely to build loyalty and to trust companies with a trademarked name.
- A trademark can also help in creating goodwill for the company, which can result in increased sales and profits.
- It can be used as a source of revenue by licensing the trademark to other companies or selling it outright.
- Trademarks can be used as a marketing tool, allowing companies to communicate their message quickly and effectively.
- Trademarks can be used as collateral when seeking financing from banks or other institutions.
Trademarks extend their benefits even further by providing the following protections:
- They form a barrier against the risk of confusion and deception. When consumers are buying a product with the same name as a trademark already on the market, it creates confusion for customers who may be purchasing counterfeit goods or pirated copies of products.
- They help protect companies from unfair competition when one company’s trademark is used in an inferior manner by its competitor, or when another company uses its brand name to create a false impression that their own goods are made by or endorsed by the first company.
Most important, trademarks can be valuable intangible assets with significant economic worth. Registered marks can provide long-term lasting value as they are listed as long-term or fixed assets on a company’s balance sheet. By creating or expanding markets to meet consumer needs, trademarks can generate revenue and increase customer value and profits. As a result, trademarks can be a lucrative source of income for many companies, brands, and entrepreneurs. For instance, the owner of the trademarked phrase “Let’s Get Ready to Rumble” has reportedly earned over $400 million in licensing revenue—making this trademark worth a pretty penny!
Do You Own Any Trademarks?
All these benefits make trademarks an essential and valuable part of any successful business strategy, which you may want to seriously consider incorporating today! Especially since they work in tandem with other forms of IP your business may possess.
So, having an effective trademark strategy is key for your business when seeking to maximize the value of your brand. And protecting IP is likely to help your company avoid future legal issues by preventing others from flagrantly infringing on one’s intellectual property rights. Thus, protecting the financially intrinsic value of a brand and future revenue potential.
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