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Valuation Corp.
appraisal service & consulting
Valuation Corp.
appraisal & consulting

VALUATION Corp. Provides Professional Valuation Services in Regard to Brands and Trademarks (Servicemarks) in Russia

Trademarks (Service Marks) in Russia

According to the Russian civil law, trademarks and service marks are means of differentiation and individualization of products (services) aimed at distinguishing between goods and services provided by particular legal entities or individuals from similar goods and services provided by other legal entities or individuals. A trademark (servicemark) can be an original image, text, logo, shape or form and the rights to use it are protected by law.

Trademarks and servicemarks are very similar in nature – they are designed to make products more recognizable and to help consumers quickly distinguish some products from the others. The only major difference between a trademark and a servicemark is that trademark serves for individualization of goods, while servicemark – for individualization of services.

In Russia any legal entity or private individual can register a trademark or servicemark provided that this mark is unique, i.e. does not repeat and does not copy existing registered marks. After the registration procedure, the authorized government body - Federal Service for Intellectual Property (ROSPATENT) - issues a Certificate of Registration for Trademark (Servicemark), which confirms the exclusive right of the holder to use the mark for the certain classes of goods or services specified in the Certificate.

Russian Certificate of Registration for Trademark (Servicemark) is issued for 10 years and can be prolonged (for a fee) unlimited number of times by 10 more years at a time. State legal protection for registered mark works as long as Certificate of Registration remains valid.

Rights and Value

Valuation of a registered brand name, trademark or servicemark is a professional assessment of value of the exclusive right (see definition of the exclusive right in Russia) to the subject mark under current market conditions.

Exclusive right to an object of intellectual property is similar to an ownership right to a material property – is gives the right holder maximal possible control over his intellectual property under prevailing law.

The exclusive right holder may transfer non-exclusive rights to use his intellectual property (trademark or service mark) under a license agreement. The set of rights which licensee gets under license agreement depends on the specific conditions of a particular license agreement, but it always have some limitations which make this set of rights different from an exclusive right.

Valuation of non-exclusive rights to use a trademark (service mark) is often referred to as trademark (service mark) license valuation and the main purpose of license valuation is to get an independent professional opinion on fair amount of royalty for the use of trademark (service mark) under particular license agreement and existing market conditions.

Since non-exclusive rights transferred under license agreement are always limited in comparison with the exclusive right, the license value is always less than the value of the exclusive right to a trademark or servicemark under the same market conditions.

Valuation of Trademarks (Service Marks) in Russia

Valuation of brand, trademark or service mark is based on an analysis of the company’s complete business cycle from manufacturing to sales and is aimed to determine the fair market value of the subject mark through assessment of its contribution to the company’s profits and/or sales volume.

Our firm has been doing valuation of trademarks (servicemarks) and trademark (servicemark) licenses for more than 20 years now. We have experience in valuing trademarks in various industries and have gained extensive knowledge of value-moving factors in such industries as pharmaceuticals, food processing, aircraft manufacturing, textile industry, mechanical engineering, high-tech industry and publishing.

According to our practice, an independent valuation of brand name or trademark in Russia is often required in the following situations:

  • development of adequate pricing strategy when buying/selling a trademark (service mark);
  • trademark (service mark) licensing (granting of non-exclusive rights);
  • making a non-monetary contribution of exclusive right to trademark (service mark) to the charter fund (shareholders’ capital) of a Russian legal entity;
  • independent confirmation of trademark (service mark) market price in transactions between affiliated legal entities for taxation purposes;
  • determination of initial book value of a trademark (service mark) as an intangible asset on corporate balance sheet;
  • revaluation of trademark’s book value on corporate balance sheet according to existing accounting regulations;
  • pledging exclusive right to trademark (service mark) as collateral to bank;
  • independent confirmation of the trademark (service mark) value for capital raising campaigns;
  • determination of the amount of damages caused to the right holder by unlawful use of his trademark (servicemark).

For a detailed consultation on valuation procedure of brand name, trademark or service mark in Russia, please contact us by email info@koo.ru or Telegram

Information and Documents for Valuation

For valuation of trademark (service mark), the following documents and information generally are required:

  • copy of Certificate of Registration;
  • detailed description of the subject trademark (service mark) usage(s) and the list with characteristics of goods (services) sold under the subject trademark (service mark);
  • annual sales volumes of goods (services) sold under the subject trademark (service mark) for a period of the past 3-5 years;
  • copies of licensing agreements for the subject trademark (service mark) and report of proceedings from royalties - if any;
  • sources of income from usages of the subject trademark (service mark) other than selling goods (services) or licensing - if any.

For valuation of trademark (service mark) license, the following documents and information generally are required:

  • copy of Certificate of Registration for trademark (service mark);
  • copy of license agreement or a draft of such an agreement;
  • nomenclature of goods (services) produced or planned for production by the licensee using the subject trademark (service mark);
  • revenue, cost and net profit from sales of goods (services) under the subject trademark (service mark), received by the licensee for the past 3-5 years (if subject mark have already being used in production of goods or services);
  • projected revenue, cost and net profit from sales of goods (services) under the subject trademark (service mark), which the licensee plans to receive during the term of the license agreement (if subject mark is not yet used by the licensee, but planned to be used in near future).

Depending on the purpose of valuation and other factors, the above list of information and documents may be reduced or expanded after our review of the valuation assignment.