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Imagine Telling Investors the Good Will of Your Business Has Been Lost or Damaged!
© Cheryl Hodgson 2008 | Posted on June 5, 2008
Maintain and Police Trademark Registrations or this could happen to you!
A parts manufacturing company in the Bay Area called me in to review and summarize the status of their brand protection and copyrights. That included their logo and other trademarks.
A large percentage of the purchase price paid for the company several years earlier was listed as a company asset under “good will” This figure, which amounted to millions of dollars, was assigned to the goodwill and brand.
If registrations of trademarks are not maintained on a regular basis, legal protection is lost. Moreover, rights can be diminished or lost without an effective program to monitor the marketplace, and act to enforce rights against infringers. [See Previous Post ].
In addition, the company had received no advice on filing requirements necessary to maintain its registrations. Two of the most important registrations had actually been cancelled and were beyond revival. Even though he was required to do so, the CEO was afraid to write a letter to outside auditors. If he admitted his oversight, the value of his brand would be reduced on the books, and if he didn’t admit it, he would be lying.
I investigated the status of their trademark and brands at the TM office and detected a serious problem. Previous counsel failed to record assignments (like a deed to a house), transferring ownership when the company was purchased four years earlier, meaning my client did not hold title to its own brands.
I reviewed and diagnosed the status of all registrations. I recommended immediate re-filing for those lost and registration of several new trademarks.
Fortunately, we were successful in obtaining a new priority date before it became public record that the early registrations trademarks had been cancelled. I also presented company execs with a written opinion allowing them to state to outside auditors that there had been no loss of value to the company’s goodwill and brand.
Now that they were sufficiently protected, I strongly recommended they build their brand internationally through their distributors, which will increase the value of their company. They took my advice.
Technorati Tags: accounting, brand equity, brand management, intangible assets, Intellectual Property, policing your mark, risk management, trademark registrations
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