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The Top Five Reasons that Trademarking a Name is a Good Investment

By John DiGiacomo

Here are the top five reasons that having trademarks can be good for your business and are good business investments.

1. Trademarks are valuable business assets — If created and prudently managed, trademarks can be very valuable business assets, on par with capital equipment, inventory, real estate and other saleable assets. As we discussed recently here at Revision Legal, Forbes media published data showing that, in 2020, Apple had the most valuable set of trademarks — brands — valued at $241.2 billion. See here. Like many assets, the value of trademarks appreciates over time and, unlike patents, as long as a trademark is being used, trademarks can exist indefinitely.

2. Trademarks can be used to attract financing and investors — Like any asset that can be monetized, the value of a trademark can be used to attract investment financing and can make a small business an attractive acquisition target. Many entrepreneurs begin with the hope of achieving success and then being “bought up” by a leading company in their industry. Having strong trademarks and brands can help achieve that goal.

3. Trademarks drive sales and revenue — Another reason that trademarks are good business investments is that they drive sales and revenue. A successful trademark is how consumers “find” your business in a busy, chaotic and crowded marketplace. Being easy to “find” has become paramount for business success as a large percentage of business is now facilitated by online sales platforms. Trademarks and brands are how consumers search online.

Further, a successful trademark creates loyalty among consumers. This drives repeat business and, thus, drives sales and revenue. Consumer loyalty also drives word-of-mouth referrals, again, driving sales and revenue. In a similar manner, a successful trademark signals quality. This is part of what cements customer loyalty. Moreover, the legal protections provided by trademarks allow a business to shut down sellers of counterfeit and pirated products. This can help drive sales and revenue (or at least prevent the diversion of sales and revenue to competitors).

4. Trademarks ease entry into new markets — Another reason that trademarks are good business investments is that trademarks ease entry into new markets. Take a simple example: Your business owns a famous trademark for a delicious type of cookie and would like to expand into the ice cream market. Using the cookie trademark for the new product can make the new product launch a success.

The idea of “new markets” is not limited to new products. Trademarks can also be used in this manner to successfully launch a business into new geographic markets and new sales channels.

5. Trademarks can create additional revenue streams — In a similar way, trademarks can be used to create additional revenue streams via trademark licensing and partnerships. To continue our simple example, instead of launching a new ice cream product, your company can license the famous cookie trademark to an existing ice cream provider. This creates a low-risk revenue stream from the licensing arrangement.

6. Bonus — trademarks can help launch other trademarks — As a bonus, a sixth reason that trademarks are good business investments is that trademarks can help successfully launch other trademarks. Imagine an advertising launch campaign that begins with: “From the Company that brought you everyone’s favorite BRAND PRODUCT, we invite you to try …”

Contact Revision Legal

For more information or if you have questions about creating and registering a trademark, contact the trademark lawyers at Revision Legal at 231-714-0100.

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