A study recently released by the USPTO that cross-references US trademark application records with U.S. Census Bureau information demonstrates that companies that file trademark applications are statistically more likely to employ more people and grow more revenue compared to a control group of companies. In addition, first-time trademark filers are more likely to experience a growth in research and development activities after filing a trademark application as compared to a control group of non-filers.
The authors theorize that the linkage is explained by the connection between trademark protection and “customer acquisition and loyalty-building” by trademark owners. Other commentators cited by the study authors suggest that trademark ownership produces greater revenue because it establishes brand loyalty and goodwill, signals product or service quality, and reduces consumer search and switching costs.
The study theorizes that by protecting a company’s investment in marketing and reputation-building, “trademarks can lead to higher intensity of advertising and marketing expenditures, as trademark registrations can better appropriate the benefits from such expenditures.” Furthermore, trademarks “can reduce the price elasticity of demand, allow companies to maintain higher prices and facilitate investment into. . . further reputation building activities, R&D and innovation.”
The study indicates that protection of trademarks can have positive long term consequences for a company’s competitive position. If you have not yet applied to register your company’s trademarks, this study points to the advantages of taking that step.
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