Existing methods for evaluating the value of trademark rights

There are currently many methods for evaluating trademark rights. The most traditional method is the accounting intangible assets valuation method. There are replacement cost method, market comparison method and present value of income method respectively. Using the replacement cost method to price assets is to use the current and past technical and economic data of the assessed asset itself to derive the assessed value of the asset. Using the market comparison method to price assets is to deduce the assessed value of the asset by inductively inferring the current technical and economic data of assets similar to the asset being appraised. The income present value method is an analytical method. Using this method to price assets is to conduct economic analysis on the future use of the assets being evaluated to determine the assessed value of the assets. All three methods have shortcomings. The replacement cost method to evaluate the value of trademark rights is often restricted by the replacement conditions and cannot reflect the value accumulation factors in the use of the trademark; the replacement cost method and the market price method cannot reflect the trademark value. The excess profit-making ability of the trademark; although the income present value method can reflect the excess profit-making ability, it cannot reflect the value accumulation factors in the historical use of the trademark. Currently, the most commonly used and better method for evaluating the value of trademark rights is the method used by Interbrand to calculate brand value. The company calculates brand value in much the same way it evaluates other assets: based on the profits the brand is likely to earn in the future. Interbrand uses a combination of analyst forecasts, company financial information and its own qualitative and quantitative analysis to arrive at the net present value of these earnings. The first step is to calculate the proportion of a certain brand's sales to the company's total sales. According to reports provided by analysts from JPMorgan Chase Bank, Citigroup and Morgan Stanley, Interbrand first estimated the sales and profits of brand products and services in the next five years. The second step is to calculate the profits brought by the brand's own advantages. After deducting operating costs, corporate income taxes and capital expenditures, the profits from intangible assets are obtained. Excluding the profits brought by other intangible assets such as patents and management capabilities from these profits, it is the profits brought by the brand. Finally, the brand's future profitability is converted into a net present value. Interbrand discounts based on spot interest rates and the brand's overall risk profile, including brand influence. Considerations include the brand's market leadership, stability and global reach - its ability to transcend geographical and cultural boundaries. The resulting calculation treats the brand as a financial asset. Although this method considers a relatively comprehensive range of factors, it still involves personal preference when it comes to predicting a trademark's earnings in the next five years.

In recent years, the option pricing method of financial products based on risk-neutral probability measurement has continued to gain recognition, and with the continuous improvement of option pricing methods, its application has begun to shift to corporate investment decisions. . We found that options and trademark rights are both rights and there are many similarities between them. In this article, we use the option pricing method to price trademark rights.