How Patents and Trademarks Provide Value to Investors or Potential Buyers
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How Does Patent/Trademark Registration Benefit Investors and Owners of Intellectual Property?
Branding and innovation are marks of a growing and competitive business. However, without proper management and protection of these innovative ideas, the owner and the business world might stand to make nothing meaningful of it.
Patents and trademarks are one of the ways to legally keep your business ideas and innovations safe. Patents are used to protect scientific inventions, designs, and mechanical processes, while trademarks protect your unique brand name and trade symbols from misuse by other enterprises. They are obtained from the United States Patent and Trademark Office (USPTO), and the process could take years. But while your registration is being concluded, you may be allowed to utilize a ‘patent pending’ or ‘trademark pending’ designation to protect your intellectual property within this period.
Getting registered patents or trademarks for your intellectual property portfolio can seem like a lot of work due to the complex registration process, and you might begin to second guess why you need to protect your inventions and brand symbols this way. But the benefits far outweigh the stress of registration.
Other than protecting your ownership of your innovations, patent and trademark registration signifies that your product is useful and most likely marketable. This makes such products or inventions attractive to investors or future buyers as they are relatively assured of making reasonable profits from the product.
Other ways trademarks and patents can benefit you and your investors include the following:
Increased Sales and Profit Potentials
Patents and trademarks offer the owners of the protected products exclusive rights to manufacture and distribute them. This means that no one else can copy your patent portfolio or brand, and you’ll be the only one in the market offering your unique products and services.
This exclusivity can increase demand for your products, giving you a competitive advantage in the marketplace.
Certainty of Ownership Rights
Patent and trademark registration makes verifying who owns specific patented technologies and intellectual property rights easy. This is important for investors as they can be sure they are dealing with the rightful owners of the invention and not an impostor before parting with money.
Also, once a patent or trademark is purchased and ownership is transferred, the buyer can register their interest at the USPTO. This way, other interested third parties are aware of the change in ownership. Having a patent thus shows a prospective buyer or investor that their contribution or ownership will be recognized and protected.
Elimination of Future Competing Claims
Patent and trademark registration and protection operate on a first-to-file basis. If you can show that your innovation is already protected by law, your investors/purchasers will be more comfortable knowing that they do not have to deal with competing claims for such inventions.
If your invention remains unregistered, there is a risk that someone else may obtain patent or trademark rights over a similar design, method, or invention before you do. In such cases, making money from your intellectual assets may be difficult since someone else has exclusive rights to use and distribute them. An unregistered invention is unattractive to investors due to the future risk of patent infringement against a third-party patent owner.
Confidence in the Value of the Product
There’s no better way to show an investor or purchaser that you believe in your work than the fact that you have taken steps to protect it and make it stand out amongst other competitors. Your confidence in the value of your product makes it more attractive to investors and buyers, and it would be easier to convince them to buy into your ideas.
Other Factors That Could Affect the Market Value of Your Intellectual Property Portfolio
Other than IP registration, the value of your intellectual property to investors depends on several factors, including the cost of production, marketability, and the ease of mass replication. So, if you intend to offer up your IP rights for sale or you’re seeking investors, it is important that you consider all the factors before deciding on the monetary value of your property, so you do not run at a loss.
While it might be hard to calculate the monetary value of intangible assets, you can reasonably estimate the value of your intellectual property rights by considering some of the following factors:
Nature of the Patent
The nature and scope of your product or design play a part in the value you can derive from it. Products restricted to a particular market section may have limited income streams and a lesser value than one broader in scope.
A product that is useful to different markets or industries can produce multiple income streams and should be valued highly. For such products, instead of an outright sale, consider licensing your IP rights in a non-competing market while maintaining autonomy in your field.
The Market Size
The available market size for your patented or trademarked product determines the economic value of your intellectual property. For instance, a patent for a niche product in a closed market might have limited value. However, a patent with a broader reach and market appeal in an established market would likely yield more economic returns, which might increase its monetary value.
Your Competitors
Many new inventions are usually improvements of existing technologies and products. These innovations might be valuable, but the market might prefer to use the existing version of the product. Having competitors with similar products might reduce the value of your patented technology and your estimated future revenue.
However, pioneering inventions or brands might have more value as they don’t have competitors yet. If your product or invention is the first of its kind, it would take some time before competitors join you in the market with similar inventions, which gives you a significant marketing advantage.
Overall, the nature of your industry, the intensity of your competition, and available substitutes are huge determinants of the value of your IP. So you’ll need to consider all of that before deciding on a figure for potential investors and buyers. But if you need help with your patent valuation, you can consult experienced patent and trademark attorneys for help.
How Experienced Intellectual Property Attorneys Can Help
Is your business idea protected by law? If it is not, you’ll need to act fast by registering your brand or product at the USPTO to avoid misuse by third parties. Yes, the process is challenging and takes time, but you won’t need to worry about all that once you hire a skilled attorney to take charge of the process on your behalf.
Your attorney can represent you throughout the patent and trademark prosecution process and represent your interests at every point, so you’re free to continue with your innovative processes without interruption. As a result, consulting with a lawyer is crucial to ensuring that your intellectual assets and interests are always protected, and that you are not cheated out of your entitlements.
If you have further questions on patents and trademarks, or you need legal representation while dealing with potential investors and buyers, contact us at Evergreen Valley Law Group.
We are a firm of experienced intellectual property attorneys and can help you with all your trademark and patent protection needs in the US. Get in touch with us as soon as possible to begin the process of protecting your innovations/business from infringement.
