Registered trademark protection helps US companies innovate and grow according to a new study linking registration to employment.
A new study provides fresh insights into the diverse US market, revealing the economic benefits of trademark ownership. Research from the US Patent and Trademark Office (USPTO) showed that registered trademark protection helps companies to grow, employ more people and innovate.
This data shows that, in total, R&D and patenting activity tend to be higher following a company’s first trademark filing, when compared to a control group. Trademark-filing companies, it reveals, are 20 times more likely to file for a patent or perform R&D than a typical US firm. The proportion of R&D-performing companies that had applied for at least one trademark was significantly larger in 2011 (68 per cent) than the share that had applied for at least one patent (50 per cent). More firms filed their first trademark prior to their first patent, than the reverse, with initial registrations for both kinds of rights often coming within a few years of each other. The authors argue that trademark registration is a useful measurement for capturing of innovativeness, but the evidence also suggests that trademark registration causes companies to be more inclined or able to innovate.
The study also provides new evidence about the relationship between trademark registration and growth. It shows that the average number of employees at a company increases following its first filing, and that employment growth is quicker at firms with at least one trademark registration than at companies in a control group; the gap between companies that file for brand rights in their first year and those which do not, for example, grows as the businesses age. Similarly, while pre-filing average revenue trends for trademark-owning companies and the control group are similar, a considerable revenue gap opens between the two groups shortly after registration of the first trademark. The study adds to other recent research showing the positive economic effects of trademark protection, such as an academic report demonstrating the link between brand rights and the financial performance of SMEs.