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Valuing trademarks is similar to valuing brands. A trademark is a right to a word, sequence of words, symbol or design used to identify a product or service. The associated goodwill that is attached to a trademark is sometimes known as the brand. When valuing trademarks, an appreciation of these wider considerations is important as the two are often intrinsically linked. 

Intangible Business specialises in valuing trademarks as well as other associated assets such as brands. This is often useful for sale negotiations or a trademark dispute, such as quantifying damage to a trademark, when a representative of Intangible Business acts as expert witness. A thorough, commercial approach is essential to ensure a reliable trademark valuation that can withstand cross-examination and court scrutiny. There are three main approaches to valuing trademarks which Intangible Business adopts.

Trademark valuation methodologies

1. Income approach to valuing trademarks
Anticipated future income that is attributable to the trademark is a key component of the income approach to valuing trademarks. This income is discounted to present the trademark value as a single amount. Royalty rates are frequently used to drive the income approach to valuing trademarks. This calculates the amount the trademark owner would need to pay in royalty income if someone else owned the trademark.

2. Market approach to valuing trademarks
As part of the market approach to valuing trademarks, comparable royalty rates are sourced to fuel the income approach. Royalty rates are sourced from Intangible Business’ proprietary database as well as from external sources. Comparable trademark transactions are also analysed and benchmarked to help support the trademark valuation.

3. Cost approach to valuing trademarks
The cost of creating the trademark and the cost and associated risks of re-creating a similar trademark are key considerations when valuing trademarks. These valuations are used primarily to support the other trademark valuation methodologies.

Other approaches to valuing trademarks are considered where appropriate although the income approach generally drives trademark valuations with the market and cost approaches acting as sense checks and support. Intangible Business has valued trademarks across industries, countries and markets, including entertainment, leisure & tourism, professional services, fashion, fragrances, pharmaceuticals, technology and telecoms.

If you have any questions, or if you would like us to value a trademark, please call us on + 44 (0)20 7089 9236 or send us an email.