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101 reasons for not selling your unused trade marks ...

By Jeremy

A distinguished friend, colleague and fellow IP blogger has written to the IPKat say that he is doing some research on the ways that people make money from their trade mark portfolios. In this context he writes:

"... there is one aspect that remains somewhat in the dark: the question why companies do not sell or dispose of their non-used trade marks on the open market.

It becomes increasingly difficult to find and subsequently develop a trade mark that is short, attractive, descriptive in marketing terms but legally strong enough, etc. Many players who have such marks but have decided not to use them any more because the underlying business has ceased (e.g. the decision by ING not to use POSTBANK) do not sell but keep their marks in stock and thus risk losing the mark altogether (non-use for five years). The explanations I have heard are not very impressive, like

* trade mark owners see ?no need?,

* trade mark owners do not want to burn their fingers by selling a mark that is not being used but which is then made a huge success by the subsequent buyers.

None of these are very convincing arguments, let alone legally sound arguments".

He adds that, even with the aid of Google, he hasn't been able to unearth much literature on the subject. The IPKat came up with the following possibilities:

? Unused trade marks are sometimes variants or brand extensions of existing branded lines. The owner is unwilling to sell them because they are (often wrongly) believed to provide an extra level of protection;

? The act of publicly putting unused marks up for sale sends out a message to competitors, shareholders etc that the registered proprietor is seeking to reduce its commitment to the sector(s) corresponding to the Classes for which the mark is registered;

? There are no clear comparators that indicate what sort of price such a mark might fetch, since most sales of trade marks run in conjunction with the sale of businesses to which they are attached;

? The cost of maintaining an unused mark on the register is trivial, but the knowledge benefits derived can be considerable?for example where the proprietor receives requests for coexistence agreements;

? Most corporations have structures that provide for the supervision and maintenance of IP portfolios, but few have structures that provide for the regular audit of unused and superfluous marks with a view to their disposal.

Having said all this, he wonders if his readers have any more reasons - preferably cogent ones. Please post your comments below or email them to the IPKat here and he'll post them for you.

Full post as published by IPKat on January 15, 2008 (boomark / email).