What is a Trademark & How to Make Money with Them
Thanks for checking out the second blog in our How to Make Money with Trademarks series. In this blog, we will learn exactly what is a trademark and discuss the steps to making money with them.
What is a Trademark?
A common question that we hear asked is what is a trademark? It’s hard to learn how to make money from trademarks if you don’t fully understand what they are. To put it simply, a trademark is a mark that is used to represent a brand. A trademark lets the public know that one brand is different from other brands in the market. A trademark is sometimes called a “service mark” when it is used to identify a service instead of a product. A trademark can be a word, a name, symbol, logo, phrase or several of these things all combined. The most important thing to know is that a trademark differentiates a brand from other providers of similar offerings in the marketplace.
What is the difference between Trademarks and Copyrights?
How do I know if I have created a trademark or a copyright? Generally speaking, copyrights are used to protect literary and artistic works such as songs (music, lyrics, studio recordings, live performances), artwork, poems, books and manuscripts, etc. while trademarks are used to own a company name, logo for your business, or slogan or phrase that you use in the marketplace to identify your business.
What is the difference between Trademarks and Patents?
A patent is used to legally protect an invention. There are three different types of patents: design patents, utility patents and plant patents. An example of something you would need a patent application for would be if you invented a new pharmaceutical drug or a mechanical device. Patents are beyond the scope of this blog but are helpful ways to legally protect your inventions.
How to make money from Trademarks
Now that we understand what a trademark is and how it is different from copyrights and patents, let’s talk about what we need to do in order to make money from them. Many of the largest brands and companies have trademarks that are worth millions. How do they do it? Here is our proprietary three-step process that we help our clients with in order to position them to make money from their trademarks:
- Create a Money-Making Trademark
- Legally Own the Trademark
- Market Your Trademark
- License Your Trademark & Make Money
Step One: Create a Money-Making Trademark
The first topic that we will cover will be how to create a money-making trademark. There is a difference between trademarks that do not have value in the marketplace versus trademarks that are able to command substantial royalty income when licensed. In the future posts in this series, we will discuss exactly how you can create a money making trademark.
Step Two: Legally Own the Trademark
This is an important step that unfortunately many people skip. In order to command top dollar for your trademark, you need to legally own it. Companies will not want to license something that may be subject to a trademark infringement lawsuit. The future posts in this series will go into detail regarding the steps you need to take to legally own your trademark in order to increase its value.
Step Three: Market Your Trademark
Once you own the trademark, it is time to get the word out that it is available to be licensed. I will discuss various strategies you can use that are low-cost and will not take much time, but that could provide your trademark with the attention it needs to attract companies and individuals that may want to license your trademark.
Step Four: License Your Trademark & Make Money
In this section of the blog series, I will go into detail as to how to structure licensing deals to make money from your trademarks. We will first discuss what licensing means and how it works. We will also talk about the common terms you will need to negotiate and how to negotiate them. We will address how much you should charge, how often you should get paid as well as other clauses and details that need to be included in order to legally protect you and your brand when you’re making money licensing your trademarks. The goal is to show you how to create a passive stream of income entirely generated by the creative trademarks you create!