Trademark valuation methods and an alternative pricing mechanism

Abstract

This thesis explores the historical, emotional, and economic dimensions of trademark valuation, focusing on the complex challenge of assigning monetary value to trademarks—sophisticated instruments of modern commerce with deep cultural and psychological significance and offers an alternative mechanism for valuation. Beginning with the evolution of trademarks from simple ownership markers to powerful tools of consumer perception, the study highlights how trademarks now aim to evoke feelings related to quality, desirability, and identity. The core of the thesis analyzes various trademark valuation methodologies, categorized under three main groups: Financial Methods, Behavioral Methods, and Mixed Methods. Financial Methods—such as the Cost-Based, Market Value, and Income-Based approaches—offer quantifiable models rooted in accounting and market comparisons, yet often fall short in capturing a trademark's intangible value and future potential. Behavioral Methods, including those by Aaker, Keller, and Kapferer, provide rich insights into consumer perception and brand equity, though they lack financial metrics and were originally designed for marketing analysis rather than valuation. Mixed Methods, exemplified by Interbrand, BBDO, and Semion, attempt to integrate diverse variables into a unified valuation model, but are criticized for the subjective nature of their metrics and weighting systems. The research highlights the shortcomings of traditional valuation methods and proposes an alternative solution based on the Austrian School of Economics, emphasizing the subjective nature of value. The thesis presents a system in which the commercial value of trademarks would be determined by the market through the public offering of trademark shares on an international trademark exchange, to be managed by the World Intellectual Property Organization (WIPO). This system would allow for the objective valuation of trademarks by enabling the market to set their values based on transparency in key metrics and the collective judgment of investors. Furthermore, the thesis explores the potential challenges that may arise in implementing such a system on a global scale. It addresses complexities such as the need for international cooperation, legal harmonization, and the practical difficulties of integrating trademark valuation into a stock exchange platform. Possible issues related to market manipulation, transparency, and regulatory oversight are also discussed. By examining these potential obstacles and offering solutions, the research provides a comprehensive framework for both theoretical and practical applications, contributing valuable insights to future studies and the global practice of trademark management.