Trademark Valuation
Case Study: Trademark Valuation for Client by Myvaluation
- FMCG & Ice Cream Industry
- Replacement Cost
Introduction
Client, a prominent name in the Indian FMCG and ice-cream industry, owns several registered trademarks under the brand name “XYZ”. These trademarks span multiple classes and jurisdictions, representing the brand’s long-standing reputation, consumer trust, and market value both domestically and internationally.
Client proposed a transaction involving the use and registration of a Double Branded Logo, incorporating these Identified Trademarks, and sought a Consent and No-Objection Letter for the same. As part of this process, a fair valuation of the consideration for the use of these trademarks was required.
To ensure an independent and robust valuation process, Myvaluation, a Registered Valuer, was engaged to perform the trademark valuation.
Scope of Work
Myvaluation’s engagement included the following:
- Review and analysis of the list of Identified Trademarks under various classes, as provided by Client.
- Examination of management-certified ledgers reflecting historical and ongoing expenses associated with the trademarks.
- Verification and due diligence of the ownership, usage, and registration details of the trademarks.
- Application of the Cost Approach – specifically, the Replacement Cost Method – to determine the fair value.
Valuation Methodology:
Replacement Cost Method under Cost Approach
The following valuation methodologies were adopted for the allocation of the purchase price:
- Rationale for Choosing Replacement Cost Method
The Replacement Cost Method was selected because it allows for a structured, objective estimate of the monetary investment required to establish a comparable trademark portfolio. This method is especially useful when:
- The trademarks are not actively licensed on the open market.
- Market-based or income-based approaches are not viable due to lack of comparable licensing data or revenue attribution.
- The objective is to quantify the cost to recreate the brand presence from scratch.
- Components Considered in the Replacement Cost
Under this method, the following costs were estimated:
- Brand Development and Design
- Logo and brand identity design
- Packaging and visual presentation
- Professional Services
- IP consultancy
- Brand design and legal advisory
- Global Expansion and Jurisdictional Protections
- Multi-country filings
- Enforcement and monitoring costs
- Trademark Registration Costs
- Statutory filing fees (domestic and international jurisdictions)
- Legal fees for classification, opposition handling, and renewals
- Marketing and Brand Awareness Expenditure
- Advertising, promotional campaigns
- Consumer outreach programs
- PR and digital marketing
Conclusion
This case illustrates the practical application of the Replacement Cost Method in valuing intellectual property assets, particularly when market data is insufficient or brand assets are not openly traded. Through a transparent and analytical approach, Myvaluation provided Client with a defensible and strategically aligned trademark valuation.
The case underscores the importance of engaging registered valuers with IP expertise to handle complex intangible asset assessments in line with legal and financial reporting standards.