What are the Economic Benefits of a Registered Trademark?

By Josh Gerben, Esq.

Trademarks offer not only legal benefits, but economic benefits as well.  The following are economic benefits of trademark registration:

1. A registered trademark protects your investment from infringement.
2. A registered trademark is needed for growth and expansion beyond your region.
3. A registered trademark is a valuable asset that can increase in value over time.
4. A registered trademark can be an effective marketing tool.
5. A registered trademark is needed when selling your business or seeking licensing agreements.

1. Protects Your Investment

As a business owner, you’ve likely spent much of your time and financial resources growing your business and establishing a strong reputation in your industry.  However, if you’ve grown your business without a federal trademark registration, the investment in your brand may not be protected.  If another business uses your business name, logo, or slogan without your permission, this could cause customer confusion in the marketplace and sway customers away from your brand and potentially damage your reputation.

In order to gain these valuable protections, you should register your trademark with the United States Patent and Trademark Office, or USPTO.  A federally registered trademark will come with valuable legal protections against infringement on your business.  Your registration from the USPTO will also ensure you are not infringing on another business, which provides peace of mind as you continue to build your brand.

2. Needed for Growth and Expansion

In the United States, an unregistered trademark has some legal protections simply by using it in the marketplace, but these protections are extremely limited.  For instance, business owners with unregistered marks could face challenges when seeking legal action against infringement.  Your mark would only be protected against disputes that arise in your small geographic area as well.  This means that if you offer your product or services online, or if you wish to expand your business offerings outside your region, you could face the potential of infringement if your mark is already in use by another business in the area.

A federally registered trademark, on the other hand, offers the economic benefit of providing the presumption of nationwide validity.  Registering your mark with the USPTO provides essential protections against infringement anywhere in the country, not just your region.  You can freely grow your business and expand to other areas without the fear of infringing on an existing mark.  A federally registered trademark also provides a springboard to international trademark registration, a necessity when entering new markets outside the U.S.

3. A Valuable Asset

Business owners make countless purchases over the course of ownership, from inventory to equipment and marketing materials.  These investments are certainly essential to the function of your business, but they won’t increase in value over time.  Fortunately, a registered trademark is a purchase that will actually increase in value over time.  For a minimal upfront cost and renewal fees, you will have an asset that never expires and becomes more valuable as your business grows.

Ultimately, if you ever plan to sell your business or take on investors, once of the first questions you will get is about what trademark registrations you own—not only in the US but around the world.  Trademark registrations indicate that you are the presumed owner of a brand and are legal rights that will become part of the valuation of your business.

4. An Effective Marketing Tool

Because a trademark is a representation of your brand, it would make sense that a strong trademark could become an extremely effective marketing tool for your business.  Once your trademark has been registered with the USPTO, you are free to use the ® symbol.  Include it wherever your mark can be seen, from product labeling to websites.  This simple act will convey a level of professional validity to customers and create customer loyalty, boosting sales now and in the future as your reputation grows.

A strong online presence is also an important part of a successful marketing plan.   With most consumers turning to online search engines and social media to find the products or services they need, a registered trademark will help you stand out from the crowd.  Your strong trademark should be memorable and easily recognized, which will help customers sort through your crowded industry to locate you.  This can increase recurring customers and referrals, both of which affect your future economic success.

5. Needed When Selling Your Business

If you are just beginning your business, you may not have selling on the mind, but it’s important to note that a trademark can be bought and sold just like any other business asset.  In fact, a trademark registered with the USPTO is usually a requirement of potential investors and buyers looking to purchase a business or brand.  You will also need to obtain a trademark registration before you begin the process to license your mark to other businesses or individuals.  Even if your business plan does not include selling or licensing your brand in the near future, it’s a wise economic decision to seek trademark registration to protect your business now and in the future.

A Registered Trademark’s Economic Benefits

Registered trademarks are typically associated with legal benefits, and while that’s certainly true, there are significant economic benefits as well.  You’ve invested time and money into your business, and a federal trademark registration ensures that your investment is protected.  Once you’ve registered with the USPTO, you are free to grow and expand your business throughout the United States without the fear of infringement.  You’ll also have a springboard to international registration when the time comes to expand your business outside the U.S.  A registered trademark can also serve as an effective marketing tool, helping customers to find you and building brand loyalty.  It is a valuable asset, as well, which can increase in value and be sold along with your business in the future.  Contact a United States trademark attorney to begin the trademark registration process today.

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Josh Gerben, Esq.

Josh Gerben, Esq. is the founder and principal of Gerben IP. In 2008, Mr. Gerben started the firm to provide high-quality trademark services at reasonable prices. Today, he is recognized by the World Trademark Review as a top trademark filer, having registered over 7,500 trademarks. The contents of this blog are for informational purposes only and may not be relied on as legal advice.