Your Business’s Intellectual Property May Be Its Greatest Asset

by Kelly Swartz

Many small business owners facing retirement are also faced with the decision of whether or not to sell the business. While this decision presents different struggles for every business, the value of the business and the income that may be derived from a sale will have a significant impact on the decision of whether or not to sell. Regardless of your proximity to retirement, there are steps you can take now to increase the value of your business when, and if, the time comes for you to sell.

A business valuation depends not only upon the income generated by the company every year but also upon its assets. While running your business, most of the focus is probably on generating sales and bringing in money to keep your business running and to support your family. Acquisition of business assets is likely done only as needed to keep the company running and growing smoothly. Most companies do not have a strategic plan in place to acquire or protect assets that increase the value of the company. These companies may be missing out on the opportunity to significantly increase the value of the companies and receive significant returns on investment in the event that the companies are later sold.

Assets You May Already Have

The values of intellectual property assets are commonly overlooked. And unlike other assets, you do not usually go to the store to buy them. You get to make them, and give them value, yourself. There are four different types of intellectual property: patents, trademarks, copyrights, and trade secrets. Many companies can benefit from creating and protecting several different kinds of intellectual property. However, almost every company in existence has already created a trademark. A trademark is a company’s brand and identifies the company and its products to the world.

The key to maximizing the value of a trademark lays in recognizing the potential for the value and taking steps to achieve and protect that potential. Regardless of the maturity of your business there are steps that you can take now to increase the value of your trademark.

Aim for Uniqueness

If your business is young and you are beginning to build a market or demand for your services it is the perfect time to put some thought into what your trademark should be. The best trademark is one that is not descriptive of your goods or services, but that is truly unique. To maximize the value of your trademark it should be unlike the mark of any of your competitors. Additionally, it should be easily memorable. Nike®, Google®, and Pringles® all come to mind as trademarks that fit these characteristics.

If your business is more mature and you have already created a following of business that recognizes your name, it may be harder to change your trademark. However, the possibility should not be ruled out if it may significantly increase the value of your company’s assets. More mature companies may choose to co-brand their old trademark with their new trademark until they transition completely to the more valuable mark.

Protecting Your Brand

Regardless of the age of your business, once a trademark has been selected, steps must be taken to maximize the value of the trademark. By registering the trademark, either within the state or nationally, you can prevent others from using the same or similar mark to identify competing goods and services. This carves out a space in the market into which you can expand your brand when the time comes. Additionally, registration may provide valuable benefits in the event that another company attempts to diminish the value of your brand by infringing your trademark. Additionally, by using your mark frequently and consistently you build brand loyalty, recognition and confidence with your customers or clients.

When building wealth within your company, do not overlook the potential value of intellectual property assets you already own. When the day comes to sell your company, your trademark may be your most valuable asset. After all, how much do you think Yahoo!® would pay to be able to call its search engine Google®?


Kelly G. Swartz owns Ingenuity Law, a law firm focusing on intellectual property in Melbourne, Florida. Contact her at Kelly@IngenuityLaw.com