How Patents, Trademarks, and Copyrights can increase the value of your business

Patents, Trademarks, and Copyrights can become a valuable asset in the portfolio of your small business or corporation and should be managed judiciously.

One of the most daunting questions a small business owner faces when he or she decides to sell their business is "what do I have to sell?". Aside from the phone number, address, and equipment, the main asset that is marketable is goodwill in most cases. Yet the concept of goodwill is elusive, amorphous, and difficult to quantify and monetize.

How do you measure goodwill? How difficult would it be for another business to amass the goodwill your business has accrued in the marketplace from scratch? How quickly could they build their own good will especially after the impending vacuum your exit will inexorably create? Sure, accountants have artful methods of ginning up the numbers in support of your goodwill appraisal, yet all the silver tongue number crunching will still leave you uneasy and leave your prospective bidders unconvinced.

One surefire way of providing flesh, structure, and a skeleton to support your goodwill appraisal is the Intellectual Property portfoliio of your business. In particular, if you assert to a prospective bidder for your business that your goodwill is worth $x, you may bolster your argument with a United States Patent and Trademark (USPTO) registration and/or a state registration of your Trademark. At least now your asserted appraisal of your goodwill has support in the form of a nice seal and ribbon which may release concerns your prospective purchaser may have regarding how they may be able to monetize your goodwill.

In addition, if you are in the manufacturing industry, a prospective bidder may feel more at ease if you can point to some patents you have on the products you make, or the proprietary methods and processes you use in order to conduct your business. Your prospective bidder may take comfort in the fact that he or she may be given some leverage to assert in the marketplace with patent protection.

Now, on the flip side it is true that a portfolio of patents, trademarks, and copyrights can get a bidder to sit up straight and get their eyebrows creasing may also be difficult to appraise and monetize in their own right. Not all patents, trademarks, and copyrights are enforceable or even valuable. Many patents are not worth the paper they are printed on. Many trademarks upon which there is a registration are actually enforceable due to their inherent weaknesses. As such, if you are in the position of purchasing a business with an Intellectual Property portfolio, you may want to enlist a Patent Attorney to take a look at what is underneath the hood and do some diagnostics on the true strength and value of the value of the Intellectual Property portfolio.

As such, business owners who desire to sell their business sometime in the distant future would be well advised to immediately start building up a strong Intellectual Property portfolio consisting of Patents, Trademark registrations with the USPTO and their Secretary of State, and Copyright registrations. And on the other side of the transaction, a business purchaser should be advised to enlist the services of an experienced Intellectual Property attorney to evaluate the strength of each Intellectual Property asset to arrive at a fair value of the business.

For more information on patents, trademarks, and copyrights please visit the Los Angeles Patent Lawyer website.