Basic Approaches for the Trademark Valuation in Malaysia

There are three basic approaches that are used in Trademark Valuation services, that are given below:

The Market Approach:

The market approach is a technique that may be used to estimate the worth of a trademark. Key elements in this strategy include the trademark’s qualities such as market, reputation, area, and specialized activity. The market method is based on analyses of similar trademark prices and market observation. It requires the utilization of specialized market-related data connected to intellectual property. To accurately estimate the value of a trademark, data and ratios are compared.

A brand’s and its trademark’s potential worth is determined by the market strategy. This approach is mostly used by intellectual property specialists to compare the prices of trademarks that are active in the same markets and sectors. For intellectual property specialists to offer an accurate valuation, all reference samples must be exact and transposable. Transpositions are often based on ratios related to the size and operating market of a corporation.

The Cost Approach:

Some intellectual property specialists decide to calculate a trademark’s worth using the cost method. This approach of Trademark valuation relates to all expenses associated with a brand’s development, maintenance, or promotion. The expenses incurred in creating and protecting a brand up until the brand’s value date are considered investment costs.

At the time of valuation, the cost of replacing a brand is equal to the cost of developing an identical brand. Meanwhile, propagation expenses include those connected to establishing a comparable brand. To account for brand awareness loss, which will happen to even the most well-protected intellectual property, these expenses must be modified.

Almost typically, the cost strategy is based on historical data. It doesn’t take into consideration any intellectual property’s revenue potential. As a result, it is frequently employed when other techniques of Trademark valuation are impractical but statistics that intellectual property experts can use are available. The cost technique is generally used to estimate the worth of trademarks in the early phases of development.

Methods Using Volume or Price Premiums:

A trademark’s worth may also be calculated by intellectual property experts using price or volume premiums. Such techniques involve observing price or volume differences in order to estimate the value of the intellectual property under consideration. In compared to similar generic items or services, these differentials allude to the company’s financial benefit from the products or services market under its name.

The requirements for brand value outlined in ISO 10668 state that price and volume premiums should be examined together. This will ensure that additional expenditures or expenses related to marketing or safeguarding intellectual property are properly considered. Additional independent variables will also be subtracted from the computations. These elements could include the qualities or features of the goods or services.