Does trademark registration make money? What are the profits that a trademark can generate?

I understand the benefits of trademark registration, but it’s also an expensive thing to do, so it’s hard to get people to invest their budgets in trademark registration applications unless there is a profit to be added to it… What is the profit to be gained from trademark registration?

Certainly, trademark registration itself may not be the image that generates profit. Let’s consider a few more beyond the benefits of trademark registration.

Why do so many companies spend money to file trademark applications with the JPO and sometimes even to respond to examinations in order to get their trademarks registered?
Here are the “make money” benefits of trademark registration.

Benefits of Trademark Registration

The advantages and benefits of trademark registration are explained in the following article.

The first benefit often mentioned is that you can use your trademark exclusively and that you can prevent other companies from registering their trademarks.
However, since the injunctions and claims for damages that can be made by these advantages are rather defensive advantages that arise when there are external factors, such as infringement by a third party, this in itself does not seem to lead directly to profit.

In this article, we will focus on the “branding” benefit.

Advantages of “branding”

We mentioned “defensive benefits” above. When the trademark owner can prevent others from registering the trademark and can exclusively use the trademark, it is possible as a unique “brand”.

Obtaining a trademark registration means that the origin of the trademark becomes clear. By protecting your trademark from similar or inferior products, you can guarantee the quality of your products and gain the trust of your customers.

The accumulation of “customers choosing our company over other companies” will, of course, lead to sales and eventually profits for the company.

Continuously earning trust improves the strength of your brand.
Once you become a popular brand, you can take advantage of your brand’s name recognition and appeal, and some companies can say, “We want to sell that product (service)! We want to collaborate with you to create a new product (service)!” In such cases, trademark rights may come at a price.

1. Compensation under license

A license agreement permits other companies to use the company’s trademark. After consultation between the trademark owner and the user, the trademark owner may receive a royalty fee as compensation for the license.
The higher the value of the brand, the higher the license fee.
Also, by allowing other companies to use your trademark, you can expand the scope of your business to new areas.

2. Assignment

For example, if you are selling your business to another company and the brand value of the trademark used in the business is high, you can sell the trademark rights for a price.

Examples

①iPhone
If we try to talk about licensing, the famous “iPhone” is a good example.
If you look at Apple Inc.’s website in Japanese, you will find the following statement: “The iPhone trademark is used under license from AIPHONE CO., LTD.”

AIPHONE CO., LTD., located in Aichi Prefecture, Japan, had registered the trademark “アイホン” in Japan under “telegraph apparatus, telephone sets, in Class 9” (registration number: 460472).
It appears that Apple Inc. pays AIPHONE CO., LTD. a rather hefty licensing fee per year in order to sell the iPhone in Japan.
(Please search for various articles on the amount…!)

②THE NORTH FACE
“THE NORTH FACE” is an outdoor brand that originated in the United States.
Originally, they sold camping and mountaineering equipment, but recently we often see people wearing apparel such as down jackets and backpacks on the streets.
In fact, THE NORTH FACE’s Japanese subsidiary does not exist. A company called GOLDWIN INC. has a license agreement with THE NORTH FACE and manufactures products that suit the body shape and preferences of Japanese people as THE NORTH FACE brand.

③Franchise
For example, if you want to run a store, you can start from scratch with a store name of your own design, but if you become the owner of a franchise-style convenience store, you can run your store under the sign of a famous convenience store, which has an overwhelming ability to attract customers.
The company that manages the convenience store receives a royalty fee from the convenience store owner.

Everyone spends money on the “credibility” you get from registering your trademark. So “credibility” is necessary for any business, and “credibility” turns into profit!

Summary

Trademark registration is an expensive and time-consuming process, and since you are a large company, you can spend (or spend) a lot of money on it, right? Some of you may be thinking so.
However, regardless of the size of the company, business opportunities can be gained by making good use of a trademark. It is also possible to use a trademark as an opportunity to develop and maintain your company’s profits.
The value of a trademark registration becomes greater and greater as you take advantage of its benefits and continue to brand your company. And the trademark rights you continue to use are a “lifetime asset” that will last semi-permanently if you continue to renew it.
The first step in creating a “lifetime asset” is to apply for a trademark registration!
If you are considering applying for trademark registration, you can do so through AmazingDX.
Our patent attorneys specializing in trademarks will support you in making the most of your trademark. Please feel free to contact us.

Lastly, we have many articles on branding, so please take a look at them!