VALUATION Corp. provides brand and trademark valuation services in Moscow and other Russian regions
According to the current Russian legislation (Federal law No. 3520-I “On Trademarks, Service Marks and Appellations of Origin of Goods”), trademarks (service marks) constitute designations aimed at distinguishing between goods and services provided by particular legal entities or individuals from similar goods and services (hereinafter referred to as the goods) provided by other legal entities or individuals.
Valuation of any brand, trademark, service mark or other designation is based on an analysis of the complete business cycle from manufacturing to sales of products or services by the company and is aimed to determine the fair market value of the subject designation through assessment of its contribution to the company’s profits and/or sales.
Valuation of a brand or trademark can be performed for the various purposes, the most common of these purposes are:
- closing of a buy-sell transaction;
- non-monetary contribution to the company’s charter fund (shareholders' capital);
- assignment of the right to use a trademark pursuant to a franchise agreement;
- re-valuation of company’s fixed assets;
- assessment of damages caused to the owner through unlawful use of a trademark, etc.
In certain situations, such as sale of the company, it is advisable to estimate the total contribution of all intangible assets to the company’s value. Such cases also require valuation of the company’s goodwill (value of the company business standing). The value of goodwill is determined when the company has a long-time history of stable operations in the market and has a higher than average income to net asset value ratio in the given market sector, and as a result the value of the business exceeds the total value of all assets held by the company.
Documents and information required for brand (trademark) valuation:
- Name of the subject intellectual property (IP).
- Description of the subject IP.
- Documents proving the title to the subject IP: patents, certificates, licensing agreements, copyright agreements, etc.
After the review of the principal documents, depending on the specific nature of the subject IP, we may also need:
- Specifications of products (services) made using the subject IP, compared with existing similar (competing) products.
- Specification of possible and/or existing sources of income from use of the subject IP.
- Description of the possible or existing market for subject IP.
- Annual sales volume of products (services) made using the subject IP for the past 3-5 years.
- Total expenses for acquisition of the rights to the subject IP.
- Technical, operating, environmental or economic benefits from the use of the subject IP, such as:
- Increase in sales of the company’s products when using the subject IP;
- Increase in prices attributable to the product quality when using the subject IP;
- Savings in production costs through application of subject IP;
- Revenue from sales of the licenses to use the subject IP.
- Incurred expenses for creating of the subject IP, for legal and other types of IP protection, for marketing of the subject IP.
This list of documents and information is preliminary and may be reduced or expanded after the valuer’s detailed review of the valuation assignment, depending on the purpose of valuation.
Should you have any questions regarding brand and trademark valuation in Russia, please contact us.
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