Lead - Transactions, Valuations and M&A
Taking the example of corporate partnerships, it is quite easy to understand a fundraising team focusing on the fact that a proposal will generate income (which is, after all, their main function), rather than seeing it as a transaction. The transaction view has a charity allowing another party to enhance its own income (and profit) by association with your brand, offering you a slice of that benefit in return: but is your ‘slice’ fair in comparison to the total benefit to the partner? Unless you have a clear and consistent view across the organisation that the brand is of value and needs protection, that question will be very difficult to answer.
Equally, there is a strategic question around the risk to brand value from potential uses. That might come from the realisation that only one partnership can be agreed in a particular sector, and so other opportunities have been cut off by the one that was taken (we might think of this as the bandwidth of a brand). It might also come from the potential for a partnership with another organisation leading to reputational damage: does your agreement allow for termination if the partner’s behaviour is damaging to your organisation, and does the price paid adequately reflect this risk?
Before you can get to a partnership, though, there is also the question of how robustly your brand and name is protected in law. It is difficult to extract value from a brand that is poorly protected. Equally, there is a need to ensure that your brand does not infringe someone else’s rights. Let’s think a bit about how brand value can be measured and the steps you can take to protect it in law.
The methods for valuing brands are many in number, and some are ‘black boxed’ approaches used by consultancies that are not publicly disclosed in full. Generally, there are three broad approaches:
These approaches can be used either to value the whole brand, or to assess the value of an aspect of it. They can also be used to consider questions such as the fairness of licence fee or royalty rate that is offered, or as a means of setting benchmarks against which offers can be judged before further negotiation or acceptance.
There are a number of tools available to help a charity protect its brand.
It was also interesting to see that a handful of people in the room worked for charities which had not registered a trade mark for its main brand. This could be for a number of reasons, including the fact that charity names are often fairly descriptive (often being a call to action), and trade mark law prohibits registration of names that describe the nature or purpose of the activities covered. This said, names that describe the organisation, rather than what it does, can be registrable and we at Bates Wells have considerable experience convincing Examiners at the UK and EU Intellectual Property Offices of this.
And before embarking a rebrand or new campaign, we would always recommend conducting clearance searches to ensure that your brand does not infringe someone else’s rights.
Conversely, if you notice someone else using your brand or a confusingly similar brand, don’t bury your head in the sand. Prompt action usually works best.
It was pleasing to see so many organisations actively engaging in the subject of brand protection and value at our seminar. It was equally striking to hear a number talking about how different parts of their organisation view the brand. On one extreme, a brand might be treated as a tool: as any DIYer knows, tools get broken when they are used carelessly or with age. On the other extreme are ornaments: there to be admired but not used.
A more helpful view might be to look at the brand as an income generating asset. If you use a building to deliver services that bring in income, you will invest in its upkeep, you will ensure that it is not damaged by users and you would take action to stop anyone using it for undesirable purposes or without permission. And you would expect to see the entire organisation sharing a common view of what it is there for.
Perhaps now would be a good time to reflect on and refresh how your organisation treats and uses its brand, and whether that view is shared by all?
The team at Bates Wells has in-depth experience of helping organisation to:
If any of the issues raised in this article resonate with you, we’d be delighted to talk with you and to see where we can help.
All content on this page is correct as of September 30, 2019.