From a legal perspective, trade marks are property. Intellectual property to be precise. Although most laypeople would consider bricks and mortar type property as being quite distinct from “intellectual property”, the law makes no such distinction. A trade mark is treated as property that can be sold, licensed, and potentially even stolen.
Accordingly, when valuing a company’s assets, a trade mark should be included as part of the valuable property owned the company. And just how much can they be worth? The answer is a mind-boggling amount. Conveniently for us, a group called Brand Finance has recently produced a list of the most valuable trade marks.
Valuing a trade mark is a difficult task, but certainly not one which economists shy from. The figures below were derived by Brand Finance calculating the brand’s value by finding the present value of the estimated future cash flows attributable to the brand, then estimating what someone would have to pay for the use (ie. the licence) of that brand. And as David Haigh, founder of Brand Finance, points out; “Even using conservative financial measures you end up with extremely large asset numbers.”
The interesting thing to notice about the figures below is the portion of the companies’ values that is attributable to the trade mark itself. For example, you could theoretically buy the entire Google company for $164 billion (were you to have that loose change around), but if you wanted to buy just the “Google” name alone, you would still be up for a monumental $44.3 billion. For the $44.3 billion you would not get access to Google’s breakthrough search algorithms, any of its buildings or employees, the right to use its patents, its customer lists, nor its mega hard drives. All you would get would be the right to use the term Google. In Australia, that would be, specifically, the ownership of trade mark nos. 788234, 1049124, 1111537 and 1130283.
The lesson is that a name can be worth billions.
|Trade Mark||Trade Mark Value||Total Company Value||What?|
|$44.3 billion||$164 billion||World’s most popular search engine. Also has mobile operating system Android.|
|Microsoft||$42.8 billion||$204 billion||Producer of Windows and the number one software company in the world.|
|Wal-Mart||$36.2 billion||$184 billion||The world’s largest retailer with 9,000 stores.|
|IBM||$36.2 billion||$199 billion||Computer hardware giant. Has more patents than any other technology company.|
|Vodafone||$30.7 billion||$138 billion||Operates one of the largest mobile telecommunication networks in more than 20 countries.|
|Bank of America||$30.6 billion||$109 billion||Largest bank in Northern American with 6,000 locations in the U.S and another 300 offices worldwide.|
|GE||$30.5 billion||$197 billion||Massive multi-national conglomerate with fingers in every pie.|
|Apple||$29.5 billion||$307 billion||World’s largest company, primarily from iPhone, iPad, iMac.|
|Wells Fargo||$28.9 billion||$143 billion||Banking|
|AT&T||$28.9 billion||$182 billion||Largest provider of local and long distance telephone services in the U.S., with about 95 million subscribers.|