The Connection Between Product Trademarks and Innovation

Product trademarks are indicators that differentiate one enterprise’s goods or services from those of other firms. It safeguards your identity and prevents other firms from stealing your intellectual property. A product trademark, a service mark, or a trade dress are all examples of product trademarks. These assets’ value continues to rise over time. As the value of your company and brand grows, so does the value of your trademarks. This article on UCLA Anderson Review describes how product trademarks are now valuable in measuring a company’s development in the sphere of innovation.

Product trademarks and innovation

The article begins by stating that one of the most important tenets of corporate success is innovation. It is critical for businesses to continue innovating in order to create a strong position in the industry. However, the article implies that determining the amount of a company’s innovation is difficult. According to the article, it is frequently limited to tracking R&D expenditures and providing management feedback on the patent activity. Though this strategy works for patent-heavy businesses such as technology and pharmaceuticals, the approach adopted is far from optimal. Furthermore, the article suggests that this technique is rather ineffective in areas where neither R&D nor patents are important to operations, such as finance and food. This is not providing any concrete outcomes other than the storyline that businesses in low-patent industries are less inventive. According to the article, CEOs in low-patent businesses whose income is mainly based on stock options appear to be highly motivated to innovate, based on a database built by the researchers that monitored new product trademarks. This was shown to be true because they tend to develop a greater number of new product trademarks, and those new trademarked items appear to contribute to improved performance. According to these studies, R&D and patents fail to capture inventive activities that may result in new goods. As a result, the researchers looked at new product trademarks as another potential proxy for innovation. According to research, the more a CEO’s wealth is based on stock options, the more risk the organization will take. The researchers conclude that offering risk-taking incentives to CEOs encourages better product innovation regardless of patent inventiveness.

The greater the risk a firm takes, the more motivated they are to innovate something that proves to be incredibly successful. The preceding text indicates how new product trademarks and an organization’s proclivity to innovate are inextricably linked.