Trademark filings can serve as valuable indicators for investors, according to a new study.
When comparing companies based on how many trademarks they register in a year—relative to their total assets—it is the shares of the companies that register more trademarks that do better the next year, outperforming shares of companies that register fewer, according to the study, which was recently published in Management Science.
Trademarks are sought when companies introduce names, logos, colors or symbols that distinguish a product or business brand. They offer the products and brands in question legal protection, and are used to help secure future profits, market values and long-term prospects, says Siew Hong Teoh, a professor of accounting at the UCLA Anderson School of Management, and a co-author of the study.
Companies…
