Before you set sail or sale

By | March 24, 2011

As was said in an earlier article, everyone should ensure that the name under which they trade/intend to trade is free for use and, if so, should take steps to register their trade mark. We now look at the prospect of exporting those goods or services.

Even if expansion into EU countries is not contemplated in the immediate future,

one should seek registration in any field of activity where there is a possibility of use.

By covering these additional product/service classes in target markets, the businessman gives himself the opportunity to get on with current matters while preserving future options. Moreover, by virtue of multi class filings, in a market place as big as the EU, the intrinsic value of the original trade mark is enhanced.

Many foreign companies are availing of the CTM facility ( at last count it was in excess of 200,000 and growing each week), and so it is imperative that companies in Ireland protect their national interests at least. Otherwise someone with the same or confusingly similar identity may obtain registration before the indigenous user. Then the burden of proof falls on the complainant to prove, in a court of law, that his goodwill is being damaged by the new entrant; an expensive and time consuming exercise, with no guarantee as to the outcome. The simple way to avoid possible lengthy litigation is to seek to register now!

By the same token if one moves speedily, and secures CTM registration, a plethora of possibilities await. Not only is one faced with a protected environment for personal expansion but also the prospects for franchise arrangements and licensing agreements.

As your horizons expand you need only repeat the same steps for each new market. Go through the same process of searching the target market to ensure you are not infringing the rights of others and then file registrations in respect of your portfolio of trade marks. As time passes you may end up with registrations in all the major countries in the world. These will need to be renewed every ten years but can be maintained in perpetuity thus creating brands of immense value.

There are many examples of how strong branding can reap its rewards. The Coca-Cola Corporation had a market capitalisation that was valued at circa $115 billion when its net book value was nearer to 10% of this figure. Likewise when Nestle was purchased by Rowntree the latter paid most of the $4.5 billion price tag to get its hands on the powerful portfolio of brands in the Rowntree stable.

At its simplest, the market value of a firm is the net present value of all future cash flows expected to accrue to the firm. As a result, a large proportion of the value of a firm is based on its growth potential, which in turn is enhanced by its brands. Brand valuation is therefore now beginning to confirm that brands are centrally important and enormously valuable corporate assets. Brands create trust, goodwill and ultimately loyalty. It is the loyalty that delivers sustainable income to the companies that own or acquire brands.

There are many examples of Irish Brands that now hold centre stage in any international line-up. Irish companies, through self-development and acquisition of foreign brands now enjoy an eclectic list of trade marks whose value grows with each passing year. Many an Irish entrepreneur has gone on record to say that he bought companies to get his hands on the brands rather than the products themselves. There is a lesson in that for all of us.

Liam Birkett

 


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