An interesting article in The Wall Street Journal covers a study by Professor Siew Hong Teoh, professor of accounting at the UCLA Anderson School of Management, which presents great news for intellectual property lawyers: “Trademark filings can serve as valuable indicators for investors”.
This finding should resonate with most trademark practitioners, who have always intuitively believed this to be true, but it is always gratifying when a person’s intuition is empirically proven.
The study states that: “When comparing companies by the number of trademarks they register in a year – relative to their total assets – companies’ stocks register the most trademarks. that register the most brands that do better the following year, outperforming stocks of companies that register less than.’
He continues that “companies that launch more new products and therefore have more trademark registrations, relative to their total assets, have significantly higher future earnings.”
The article details a metric called a company’s “brand intensity – a ratio that represents the annual number of its branding activities in a calendar year, divided by its total assets for the fiscal year that s completed during the past calendar year”.
While it’s useful to understand the extent to which “branding activities” are interpreted, it’s clear that the study shows that (at the very least) increased brand filings lead to better returns.
There shouldn’t be any real surprises here. Companies that are well run, understand branding, understand the importance of protecting their brands, understand the options and revenue streams that can be leveraged by commercializing their intellectual property assets under licensing and the like will generally thrive and outperform companies that don’t. obtain trademark and trademark protection.
It’s good to have hard evidence of this point, especially in language that investors and finance gurus will understand.
Let’s end with something related, but also a little different
One of the main problems with obtaining trademark registrations is, of course, lack of availability – the world’s trademark registers are overflowing. An article published in Bloomberg on April 13, 2022, discusses this dilemma.
In other words, it is becoming more and more difficult to find available trademarks. In the article, the author, Kalle Oskari Mattila, talks about an American WiFi router start-up that considered 600 possible names before a branding agency finally came up with an available name: Eero. It’s actually the first name of a well-known Finnish-American architect, Eero Saarinen. Names beginning with a double E are apparently rare in the United States, and the domain name eero.com was also available. Amazon later acquired the company and they kept the Eero name.
According to the article, American companies are opting for Finnish names – examples cited are Vuori, Levätä and Raaka. But why Finnish? Well, Finnish has only five million speakers and we’re told it’s a “treasure trove” of unique words. Finnish has similarities with only two languages, Estonian and Hungarian, and Finnish words are considered neutral, unaffiliated to Americans. The author suggests that a Finnish brand name “is an easy choice if you want to be different in a large English-speaking market”.
A perceived benefit is that “when consumers don’t have a preconceived idea of a word, brands can use it as an almost blank canvas.” The author cites as an example Raaka (raw), which is successfully used as a trademark for a chocolate that the brand owner likes to find “strong and wild”. Another advantage is that there are fewer offensive connotations. Brand owner Taika (magic) says the name “piques the consumer’s curiosity, lingers in the mind, and is really weird.”
From there, it seems easier to go back to trademark basics and invent your own words with no initial meaning, in any language.