In professional practice, trademarks are often presented to clients as basic legal safeguards – indispensable, but procedural. Yet for practitioners and experts in intellectual property (IP), the role of a trademark is far more significant: it is an asset class in its own right, capable of shaping market strategy, generating economic value, and influencing investment decisions. Trademarks are not passive legal rights; they are instruments of competitive positioning, capitalisation, and long-term business planning.
Trademarks as intangible assets in corporate strategy
A registered trademark represents an exclusive right, but its legal dimension is only the beginning. Within international accounting standards and corporate valuation practice, trademarks are recognised as intangible assets that can be booked, monetised, and leveraged. Their value is not static; it reflects consumer recognition, market penetration, and the consistency of brand strategy.
For global companies, trademark portfolios are treated as a core element of corporate wealth – frequently recorded on balance sheets in the form of goodwill during M&A. According to Brand Finance’s 2024 Global 500 ranking, intangible assets such as trademarks represent more than one-fifth of corporate value in some industries, illustrating their financial significance. For IP practitioners, this underscores why brand management and protection must be integrated into broader corporate governance rather than treated as a regulatory formality.
Economic accretion and non-depreciation of brand value
Unlike physical assets, trademarks can increase in value indefinitely. A mark that begins as an identifier of origin can, through sustained use and investment, acquire secondary meaning, reputation, and even ‘superbrand’ status. Empirical evidence from Interbrand and Brand Finance valuations consistently shows that a substantial portion of the market capitalisation of companies resides in trademark or IP asset value.
The implication for IP professionals is twofold:
Portfolio management requires a long-term perspective – renewal, policing, and licensing strategies must anticipate not only protection but also value appreciation; and
Enforcement is intrinsically tied to valuation – dilution, counterfeiting, or inadequate policing erodes intangible worth, directly impacting market share and financial metrics.
Monetisation: licensing, franchising, and collateralisation
A robust trademark is a tradable asset. Beyond enforcement, sophisticated IP strategies focus on exploitation through:
Licensing schemes – royalty-based models across various industries, from luxury goods to software, create predictable revenue streams.
Franchising – business expansion models are structurally dependent on trademark licensing, with the brand functioning as the franchisor’s principal asset.
Collateralisation – in several jurisdictions, trademarks can be pledged as security in financing transactions. Investors and lenders increasingly evaluate trademark portfolios to assess creditworthiness and growth potential.
Competitive leverage and legal exclusivity
Trademarks are not merely identifiers but competitive barriers. The exclusivity conferred by registration underpins market segmentation and shields investments in advertising and brand equity. In contentious practice, the strategic enforcement of these rights – through oppositions, cancellations, and civil or criminal actions – is as much about maintaining distinctiveness as it is about deterring free riders.
Moreover, in emerging markets such as Mexico and Latin America, the use of ® or ™ is not only a legal notice but a reputational tool, signalling legitimacy and discouraging infringement. For companies expanding into these jurisdictions, trademarks also operate as a proxy for formalisation and credibility, which can be decisive in attracting foreign investment. Experts must guide businesses in aligning enforcement mechanisms with market perception to optimise both legal and economic outcomes.
Best practices for maximising trademark value
To position trademarks as assets rather than paperwork, companies – guided by IP experts – should adopt rigorous management practices:
Early and defensive filings in multiple jurisdictions, including Madrid Protocol strategies where appropriate;
Continuous monitoring through specialised services and digital enforcement, particularly in e-commerce and domain names;
Integration with tax and corporate structures, considering transfer pricing, IP holding companies, and licensing models in low-tax jurisdictions;
Regular valuation of the portfolio for M&A readiness, financing, or investor relations; and
Strategic enforcement not only against counterfeiting but against subtle dilution, lookalikes, and unfair competition.
Conclusion on the role of trademarks
For experts in IP, the trademark is not an isolated legal right but a multidimensional asset that must be actively managed. It underpins reputation, drives revenue, influences financing, and sustains competitive advantage. The true challenge for practitioners is to position trademark law not as a compliance requirement but as a discipline at the intersection of legal strategy, economics, and corporate governance.
A trademark, when understood and managed at this level, ceases to be a formality. It becomes a cornerstone of long-term enterprise value and a decisive factor in global competitiveness.
