The value of the mark is inseparable from the goodwill, but the value of the mark is not entirely from goodwill. So, how the value of trademark is constructed? This paper argues that the value of a trademark is usually composed of three parts: the cost value, distinguish value, and goodwill value.
First, the cost value of trademark.
The cost value of the mark, including the cost of registration and maintenance costs, refers to the living labor and materialized labor that a trademark put into from the idea, design to use. This is the material basis that constitutes the value of the mark and can be counted and counted in monetary terms.
Before register a trademark, what should be put into first is the cost, which includes design fee and application fee. The design here refers to the identification of the name of the trade mark, the drawing of the trademark pattern, or the design of its combination. If design the trademark all by yourself, it will take your intelligence and labor time. If invite somebody else to design, it will spend design fees. The design fees for a trademark may only a few dollars, or even thousands of dollars. The typical example is trademark “Essoc”. In order to change the “Esso” into “Essoc”, Mobil Oil Company of US gathered experts in linguistics, sociology, psychology, statistics and other area, took five years to investigate the language of 55 countries and design more than 10,000 trademarks, finally, selected the trademark "Essoc" which is only one more word than the "Esso", but cost $120 millions.
It will enter the registration stage after finish the design. The registration fee includes the application fee (by category) and other fees. Among them, there need agency fee if entrust a trademark agency; In order to avoid the same or similar form of the prior rights trademark, the enquiry fee shall be paid before registration. Some trademarks may have to be rejected, dismissed for review or objection, and other procedures before success. The sum of the above costs is all cost for register a trademark.
In order to maintain the effectiveness of the trademark, the registrant may also continue to invest in costs in use, such as: the applicant shall be object to the same or similar trademark in the latter application; requires the administrative organ to investigate or prosecute the court for the act of infringing upon her/his trademark. The registrant shall pay the renewal fee before the expiry date of the mark. The above maintenance costs for trademarks should also be classified as the cost of the mark.
Second, the distinguish value of trademark.
The distinction value of trademark, that is, the significance value of the trademark, refers to the trademark transmission of product information to identify the product source for the public and purchase goods to provide guidance and help value.
The basic function of a trademark is to enable the consumer to identify the goods or services and their sources. In modern society, the trademark has become a market tool, a bridge and bond for the business and consumer communication. The merchant may attach information about the goods or services to the mark by various means, and the consumer may know the information about the goods or services contained in the mark , through various channels and use certain trademarks of the goods or services linked to use as a reference for their own purchase behavior. Consumers exactly choose goods or services based on the differences between trademarks, the personality characteristics of different trademarks, and the potential implications of different trademarks. Therefore, goodwill is only through the implicit influence on the trademark to exert an indirect effect on the trademark rights, and the significance of the trademark is the key to determine the right of trademark’s establishment and protection. For most of the initial stage of the enterprise, the lack of goodwill does not prevent its use of trademark recognition and protection.
The greater distinction of a trademark logo, the more sensitive of the public. In today's era of distracted economy, businesses have a strong distinction between the distinctive logo, will undoubtedly make their products more attractive to the public eye, which will help businesses out of the siege of competitors, quickly seize business opportunities. The significance of the significance of the mark lies in this. In today’s era of the knowledge-based economy, the merchant have a strong distinction of the distinctive logo, will undoubtedly make their products more attractive to the public eye, which will help businesses out of the siege of competitors, and quickly seize business opportunities. The significance of the significance of the mark lies in this.
Third, the goodwill of trademark.
The goodwill value of trademark refers to all the efforts of the enterprise to improve the quality of the commodity, reduce the commodity price and fully meet the needs of the consumers. It is the embodiment of the scientific and technological level, the management level and the market competitiveness. The goodwill value of the trademark is determined by the factors such as the quality of the commodity and the strength of the application, the length of the use of the trademark and the size of the geographical use, the intensity of advertising and consumer psychology. According to the different business conditions, goodwill value has positive and negative point, when the goodwill of enterprise face a sharp decline due to product quality of service defects or poor management, the value of the trademark may be negative.
In the real economic life, the enterprise enhance the distinguish value and goodwill value of trademark is often coincident, that is, the goodwill value will also be improved as the improve of distinguish value of trademark. For example, the trademark owner sold the product which use its trademark and pay a variety of advertising fees to raise the trademark’s awareness in the public. This act is considered to be an important means of preserving the significance of the mark and should be classified as the distinguish value of the trademark, but at the same time the goodwill value of the mark has also been increased in this process.
The composition of the various parts of the trademark value varies with the different periods of the development of the trademark value. The author believes that the formation of trademark value is generally divided into several stages: the creation period, the development period, the mature period, there may be recession period.
The function of trademarks in the founded period, is only to distinguish the goods or services of the enterprise from other enterprise by registration. The value of trademark in this stage embodied in the creation and holding of the material and labor costs, manifested as the cost value of the trademark. Development period is the key period of the formation of trademark value, its growth depends on the various elements within the enterprise, enterprises improve the market share of goods, expand the visibility of trademarks, thereby enhancing the value of trademarks by improving the technical content of goods and product quality, change the packaging, marketing and expansion of propaganda, and provide good after-sales service. In this period, the distinguish value of the trademark has been improved rapidly, at the same time, the goodwill value is also accumulated gradually. In the mature period, the trademark created by the enterprise has been recognized by customers and the market, people began to buy goods according to this trademark, then formed a a trademark "complex", which reached a high degree of trust and harmony between enterprises and customers, and the value of the trademark is maximize. At this time, the distinguish value and goodwill value of trademark reach to the peak. When the business is not well managed, consumer’s reliance on enterprise is reduced, and the goodwill value of the trademark may be zero or negative, thus affecting the trademark value adversely. This is the so-called recession period. This shows the recession period is not an inevitable stage, it is usually determined by the business situation.
So in the composition of the trademark value, the cost value is from the design and registration and other acts, the distinction value and goodwill value is mainly derived from the use of trademarks. Design and registration is the basis of the establishment of trademark value, business manage, publicity and other trademark use behaviors are the source of rapid appreciation of the trademark value.
Notes:
1. Xue Zuguo: “On the Value of Trademark” “Journal of Yunnan Finance and Trade Institute” 1999 (7)
2. “On the Significance of Trademark” from the scientific research project network
Source: quote from "China Trademark" magazine. Author: Zhao Xiuhui