The importance of legal protection for brand value

Insights|September 23, 2025

Brands are among the most important intangible assets a company owns. They identify goods, services, or entities, create associations in the minds of stakeholders, and generate economic value. At the same time, the more valuable and recognized a brand becomes, the more exposed it is to infringement.

Understanding the risks and the role of legal protection is therefore essential for safeguarding brand value. The greater the recognition of a brand, the more likely it is to be subject to infringement, and infringements may cause financial, reputational, and strategic damage that can be difficult to reverse.

Financial damage may appear as lost revenue, litigation and enforcement costs, and market share erosion. Reputational harm includes brand dilution, loss of consumer trust, negative publicity, customer confusion, and reduced brand loyalty. Strategic damage can mean disruption of business plans, loss of competitive advantage, or barriers to entering new markets. These impacts underline the importance of legal protection.

When performing a monetary brand valuation according to ISO 10668, financial, behavioral, and legal factors are considered. A very commonly used method is the royalty relief method, where the value of the brand is assessed as the present value of expected future royalty payments. In this calculation, legal protection influences the discount rate: weaker protection raises risk and the rate, while stronger protection lowers both. Expenditure on legal protection should therefore be regarded not merely as a cost but as a strategic investment that enhances both brand and company value.

Legal protection is also relevant to profitability. Cost-effectiveness can be improved through centralized registration systems such as EUIPO, WIPO, and Hague, through searches that reduce the risk of violating third-party rights, and through aligning investments with the importance of the intellectual property. Strategy and policies, selective registrations, and regular monitoring of the IPR portfolio can all contribute to a better return on investment.

A systematic approach is essential. Companies should review the current scope of protection, update IPR protection if necessary, and regularly monitor both the scope of protection and infringements. They should develop a clear IPR strategy and policies, provide training to employees, and ensure that monitoring of the portfolio remains aligned with business activities.

Robust legal protection contributes significantly to brand value. By ensuring that intellectual property rights are systematically secured and enforced, companies strengthen their brands, reduce risks, and support long-term economic value.

Read more insights from our Brand Protection team:

Copyright in the Applied Arts: Safeguarding creative value

Protecting your brand: trademark rights and enforcement

Consumer trust is the cornerstone of a strong brand

Design rights made simple: protecting product look and feel in the EU