Distinctive designs, graphics, logo, symbols, words or any combination that uniquely identifies a firm and/ or its goods or services, guarantees the item’s genuineness and gives its owner the legal right to prevent the trademark’s unauthorized use. A trademark must be
- distinctive instead of descriptive
- affixed to the item sold
- registered with the appropriate authority to obtain legal ownership and protection rights
Trademarks are granted for a period of 7 to 20 years and are renewable indefinitely. Trademarks rights are protected worldwide by international intellectual property treaties. These rights are transferable in nature that means the the owner of these rights can willingly give these right to some other parties. Although trademarks are for indefinite time period but the right to use these can be lost because of misuse or lack of use.
Trademarks are divided into 42 international classes where each class represent similar types of goods and services.
Costs incurred in design and registration of and, in defending a trademarks are usually amortized over the life of trademark or 40 years, whichever is shorter.
In Balance Sheets, trademarks are identified as intangible assets and some organizations such as Coco Cola Co., treated trademarks as more valuable than the all other assets of a firm together. Service mark is an associated term of Trademark.