Understanding true economic value of trademarks

Trademarks and intellectual property play a vital role in developing brands, promoting competition, driving economic growth and protecting consumers says Etienne Sanz de Acedo, Chief executive International Trademark Association

Every day billions of people are engaging with brands and trademarks. You can easily be exposed to thousands of brands on the way to work alone. Yet most people are unaware that underlying a strong brand is a strong trademark.

Lack of knowledge between the correlation of brands and trademarks is one of the primary reasons why trademarks are often misunderstood by the public at large. Trademarks are one of the most valuable “intangible” assets a company owns – they can be confusing. We need to demystify trademarks and the role they play in the development of brands and the protection of consumers.

We also need to encourage lawmakers worldwide to pay closer attention to trademark matters, and raise the profile of trademarks and related intellectual property (IP) to business, consumers and global trade.

Trademarks explained

What is a trademark? It is a legal right. It is any word, name, symbol or device (or any combination) that identifies and distinguishes the source of the goods of one company from those of others.

For consumers, trademarks help to promote freedom of choice, and enable quick and safe purchasing decisions. They also fuel competition, drive innovation and play a critical role in consumer protection.

We need to encourage lawmakers worldwide to pay closer attention to trademark matters, and raise the profile of trademarks and related intellectual property to business, consumers and global trade

IP-intensive industries – those having an above-average use of IP rights per employee – support millions of jobs across multiple sectors. Moreover, these jobs have notably higher wages than those in non-IP industries – 40 per cent higher in the EU and 42 per cent higher in the United States.

These were the findings of separate studies published by the EU and US IP Offices in 2013 and 2012 respectively. The same studies found that IP-intensive industries accounted for 39 per cent of the EU GDP (worth €4.7 trillion) and 34.8 per cent of US GDP ($5.06 trillion).

Transparency and emotional connection

While consumers are not usually thinking about how trademarks are informing their purchasing decisions, they are increasingly brand conscious. Consumers are also demanding greater transparency and social responsibility from the brands they buy.

A recent Gallup poll reported that “consumers will give more money to the businesses they feel emotionally connected to”. Today, shoppers wish to engage the brands they support. They also expect more from brands as corporate citizens. Over half the consumers surveyed in a 2014 Nielson Global Survey on Corporate Social Responsibility chose to buy from brands that demonstrated a commitment to positive social and environmental impact.

Trademarks protect consumers, provide endless opportunities to promote and encourage innovation and ideas, increase jobs and fuel global economic growth. Trademarks also provide the legal framework for a strong brand.

Consumers’ affinity to brands provides an opportunity for education about trademarks and IP. At the same time, it is crucial that our lawmakers value IP when looking at issues such as counterfeiting and enforcement, innovation-incentive regulations, consumer protection, and the economy.

Also found in Trademarks IP Opinion