20 August 2019

The intangible assets of companies in terms of the registration of tradenames and brands

The studies carried out by the World Intellectual Property Organization demonstrate that: “...almost one third of the value of the manufactured products being sold worldwide is based on “intangible capital,” such as a brand, an industrial design and technology.”[1] At the same time, according to the data received, the total profit received by the enterprises from the use of the intangible assets during the period from 2004 to 2014 has increased by 75%.[2]

The value of the intangible assets is determined by the uniqueness of the subject matter used and the possibility of its application. By registering and providing the legal protection to the result of creative labour or a means of individualization on the territory of the state, where the products are being manufactured and sold, the right holder obtains an inviolability guarantee to his intellectual property and reserves for himself the right to the unique parameters of the registered subject matter ensuring its value as an intangible asset.

A tradename, a brand and a regional brand: the differentiation of the concepts

The legislation of the Russian Federation does not contain a normative definition of a tradename. However, the scope of this concept corresponds to the boundaries of a legal term “trademark,” therefore the “tradename” is used as a synonym for the “trademark” in a periodical publication and everyday speech. Such state of affairs is due to the fact that in the foreign countries the tradename is a legal concept, which, in fact, is identical to the Russian term trademark.

Speaking about the disclosure of the content of a brand, it is worth noting a collective nature of the term, which includes the set of the enterprise characteristics, through which a public opinion about the company is set. If we consider the constituents of the brand in terms of the constituent subject matters of intellectual property, the following is permissible to be included with them: industrial designs, trademarks, company names, the names of the places of origin of the products and commercial designations. That is, the brand is “responsible” for the overall impression of the company.

A regional brand is the actively discussed institution consisting of a combination of the subject matters of a tangible and intangible nature aimed at individualizing and identifying the products. The main peculiarity of the regional brands is a relationship with the territorial unit, where the product is manufactured or the raw materials are grown for the manufacture of the products. The trademark or the name of the place of origin of the product may act as a regional brand, and also a geographical indication can act the same in the future. The popularization of the regional brands is connected with the state policy aimed at attracting attention to the local manufacturers. At the same time, despite the fact that the trademark along with the name of the place of origin of the product is capable of becoming a regional brand, the priority is given to the latter, since only the entrepreneurs, who are independent from each other, are capable of becoming their right holders. In addition to that, not only manufacturing companies, but also the local authorities located on the territory of the relevant region are working on the reputation of the brand.

he ratio of the terms: the tradename, the brand and the regional brand is permissible to be represented as the following scheme:

The analysis of the above concepts allows concluding the following: a tradename is a means of the individualization of the products, while a brand and a regional brand mean the set of the subject matters of a tangible and intangible nature that influence on the position of the company on trading markets and form its image in a consumer's mind. The concepts under consideration have a common feature: essentially, they influence on the perception of the product and its popularity.

The registration of tradenames and regional brands as a prerequisite for gaining profit and the growth of the value of intangible assets

Obtaining the legal protection in the country, where the product is manufactured and sold is due to a number of reasons:

< >Firstly, the holder of the means of individualization thus receives a certificate of the legality and legitimacy of the rights owned to the tradename or the regional brand.Secondly, in the case of the tradename, this will allow the right holder monetizing the means of individualization (for example, to transfer the right of the use under a license agreement).Thirdly, the legal owner is capable of suppressing an illegal use of the subject matter and demanding the award of damages.Fourthly, obtaining a protection certificate becomes a sort of a reference point, while determining the value of the intangible asset of the enterprise.

Head of Trademark Department / Trademark Attorney Reg. № 1258 / Patent Attorney of the Russian Federation / Eurasian Patent Attorney Reg. № 63