Valuation of an Un-Registered Trademark

In order to add some needed content to this site, I thought it would be beneficial to add some recent valuation work, starting with one that really took some lateral thinking.

My brief was to assess the market worth of an un-registered trademark of a business in the recruitment industry.  The business has been around for some time and has grown quite dramatically in recent years.

In all valuations I always assess who would be the likely buyer for this product and what benefits they would obtain from the purchase.  In most commercial transactions the person or organisation acquiring the item is doing so in order to obtain a financial benefit.

Long story short; after speaking to a number of well-respected Business Brokers and Valuers. I had many different ways I could calculated the potential value of the un-registered trademark.  However I was left with the lingering thought of, ‘Why wouldn’t the potential buyer just register the trademark?’  I found that despite the trademark being un-registered it still had some protection in law.  The main remedy for the un-registered trademark was if the owner had spent a significant amount on capital investing in the promotion of the trademark.  The reality in this matter was that the owner had invested very little in the trademark.  In fact my research showed the business had grown not as a result of the trademark but rather the goodwill and experience of the directors.  This was evident in the fact that over 50% of the income was derivedfrom one client whom originally had been serviced by one of the founding directors.

Given that this particular un-registered trademark had recieved very little investment in promotion and that the growth of the business was mainly contributed to the goodwill and experience of the directors, I concluded that the value of the un-registered trademark was very minimal.  My final conclusion was that if the un-registered trademark was sold.  The final agreed figure would be the result of an act of goodwill to keep the matter from incurring legal cost and to offset the seller implementing a new trademark.