Trademark Valuation: A Tool for Brand Management

Praise for Trademark Valuation "Forget all the hype about mega-patent portfolios. The only long-term assets of value are trademarks and brands, yet no IP right is more difficult to value. In Trademark Valuation: A Tool for Brand Management , Second Edition Gordon Smith and Susan Richey have built upon and expanded the iconic first edition of the book. The authors bring to bear in a clear fashion legal, accounting, financial, and economic analysis to elucidate the topic from both the practical and conceptual perspectives. The scope and depth of their analysis will make this book the gold standard for trademark valuation for years to come. No one engaged in the field can afford not to own a copy." —Neil Wilkof, author, Trade Mark Licensing "Gordon Smith and Susan Richey's Trademark Valuation: A Tool for Brand Management, Second Edition is a valuable tool for all trademark practitioners, educators, and business executives. Smith and Richey thoroughly cover trademark basics and sophisticated tools for trademark valuation and brand management. It's a must-have for your professional library and a real contribution to the trademark industry." —Anne H. Chasser, coauthor, Brand Rewired and Domain Rewired, and former Commissioner for Trademarks, USPTO "With a one-two punch of Gordon Smith, the authority on IP valuation, and Susan Richey, who has a deeper knowledge and understanding of trademarks than anyone I have encountered in my career, this is a must-have book that I will be referencing for years to come." —William J. Morris III, Trademark Counsel, Under Armour, Inc. "A must-read and ready reference for brand managers and trademark attorneys who are charged with building, maintaining, and monetizing brands! Gordon Smith and Susan Richey provide a clear and thoughtful explanation of the complicated and often murky legal and economic process and analysis that is required for accurate trademark valuation." —Edward T. White, Shareholder, LeClairRyan

Preface Acknowledgments Chapter 1 The Nature of a Trademark Trademark Defined The Legal Underpinnings of Trademarks Trademarks, Brands and the Products and Services They Represent Summary Chapter 2 Valuation Basics The Business Enterprise Valuation Principles Property and Rights to Property Premise of Value Valuation Methods Summary Chapter 3 Using Financial Information Financial Reporting Financial Statements and Value: Disaggregating S&R’s Assets Tax Issues Summary Chapter 4 Trademark Valuation Cost Method Estimating Reproduction and Replacement Cost Using the Cost Method for Trademarks Market Method Using the Market Method for Trademarks Income Method Using the Income Method for Trademarks Summary Chapter 5 Trademark Economic Benefit Future Economic Benefit Quantifying Economic Benefit Direct Techniques Indirect Techniques Summary Chapter 6 Income Method Economic Life and Risk Defining Economic Life Trademark Economic Life & Pattern Survivor Curves and Studies of Historical Life Forecasting Growth S–Curves in General Elements of Risk Summary Chapter 7 The Income Method Putting It All Together Trademark Valuation by Residual Multiple Exploitation Scenarios Valuation Based on Income Allocation Summary Chapter 8 Trademark Licensing Economics Licensing Economics Some General Thoughts Royalty Quantification Quantification Techniques Scoring and Rating Techniques Discounted Cash Flow Model Dividing the Economic Benefit Another Analytical Technique Rules of Thumb Summary Chapter 9 Quantification of Harm in Trademark Enforcement Cases Civil Trademark Enforcement Actions Monetary Recovery in Civil Actions Enhancement of Monetary Recovery Valuing Counterfeits for Purposes of Criminal Sentencing Summary Chapter 10 Special Trademark Valuation Situations Trademarks in Finance Trademarks in Bankruptcy Valuation Directions Trademarks and Ad Valorem Taxes Summary Chapter 11 Global Trademark Issues Trademark Holding Companies The Scourge of Trademark Trolls International Valuation Standards Counterfeiting:  A Worldwide Contagion Political / Investment Risk Summary Appendix A Basic Investment Principles Appendix B Theoretical Foundations for the Determination of a Fair Rate of Return on Intellectual Property Appendix C Investment Rate of Return Requirements References Appendix D Predicting Sales and Revenues for New Ventures with Diffusion Models (Richard A. Michelfelder, Ph.D., Rutgers University, School of Business – Camden and Maureen Morrin, Ph.D., Temple University, Fox School of Business – Philadelphia) New Product Sales Forecasting Models: Product Diffusion Types of Product Diffusion Models The Bass Model Caveats of the Bass Model Summary References Appendix E Dealing with Uncertainty and Immeasurables in Trademark Asset Valuation (William J. Murphy) Elements of Valuation Analysis Decision Analysis and Decision Trees Monte Carlo Techniques Obtaining Information from Indirect Observation Option Pricing Models Good Enough Decision Making Summary About the Authors Index

Gordon V. Smith is Chairman Emeritus of AUS Inc., a multidiscipline consulting and market research firm, a member of the Board of Trustees of the University of New Hampshire School of Law, and Distinguished Professor of IP Management at the law school's Franklin Pierce Center for Intellectual Property. During his long consulting career, he has advised clients on the value of intellectual property and closely held stock and has consulted in support of transactions, litigation, and tax-related matters. He is the author and coauthor of several books on IP valuation and exploitation strategies. An active international lecturer, Smith is Chair of the Advisory Board of the Licensing Economics Review, as well as an Adjunct Professor at the National University of Singapore (Division of Engineering & Technology Management). Mr. Smith earned an A.B. degree from Harvard University in 1959. Susan M. Richey is a Professor of Law at The University of New Hampshire School of Law (formerly the Franklin Pierce Law Center) and a former Associate Dean of the law school. She recently completed an appointment as Visiting Distinguished Scholar with the International Economic and Commercial Law Group at the University of Limerick in Ireland. Richey has been involved in numerous programs teaching intellectual property concepts to nonlawyers, including workshops sponsored by the World Intellectual Property Organization and UNITRAD, the trainingarm of the United Nations. Active in the International Trademark Association (INTA), she served a three-year appointment as an editor of The Trademark Reporter, a scholarly publication of INTA, a two-year appointment as Chair of INTA's Panel of Neutrals, and she currently serves on INTA's Academic Committee.