Can a trademark have value separate from the company's physical assets?

Trademarks can be a valuable asset to a company. The trademark "COCA-COLA" has been estimated to have a value ranging from twenty to seventy billion dollars under various valuation models. Commentators have noted that if all of the physical assets of the company were destroyed (e.g. the buildings, the trucks, the bottling companies), the "COCA-COLA" trademark and other intellectual
property  would be sufficient valuable to enable positive cash flow within one year. In other words, its branding and other intangible assets would comprise all that is necessary to fuel its rebirth. The time and money that the company has spent on its brand has built recognition and loyalty that support demand for its products worldwide.

Branding, and protection of that branding via means such as trademarks, can generate or sustain income streams for its owner and create differentiation between competitors. On a smaller scale than the Coca- Cola ® trademark, think about a potential purchase of Dasani ®, the bottled water line of Coca-Cola ®. Would a prudent purchaser consider buying the inventory, the recipe, and the manufacturing facility without purchasing the trademark? No, unless the purchase was for pennies on the dollar. The value of the bottled water line lies as much in its branding as the physical product. A large segment of the bottled water market is influenced by the brand equity that Dasani ® has cultivated over time.

The Coca-Cola ® and Dasani ® marks did not start with such value. That value was achieved by cultivating the brands over time.

This article was written by a strategic business partner of Brandwise.

John Lindsay is an intellectual property attorney focusing on patent, copyright, trademark, and technology law for startups
and small businesses. He can be reached at 214-736-4306 or john@StartupIPServices.com. His website is
www.StartupIPServices.com.