Trademarks May Be Worth More Than Investors Realize

Patents receive much of the attention when investors evaluate corporate innovation. They are tangible evidence that a company has developed a new technology, process, or design. Yet patents only capture part of the modern innovation economy. A retailer introducing a private-label product, a software company launching a subscription service, or a restaurant developing a new concept may create considerable commercial value without producing anything patentable.

Trademarks can reveal this less visible activity. A new study published in the Journal of Financial Economics¹ suggests that these familiar pieces of intellectual property are not merely legal labels. They can be valuable corporate assets and forward-looking signals of product launches, business expansion, pricing power, and competitive momentum.

For investors, the findings introduce a new way to interpret corporate innovation. Trademark activity may help identify commercial developments before their effects become fully visible in financial statements.

How Researchers Calculated the Value of Trademarks

The researchers constructed a dataset connecting approximately 1.2 million trademarks with 21,456 publicly traded US companies. They then measured the stock market reaction when individual trademarks were published by the United States Patent and Trademark Office.

This event-based approach differs from conventional accounting. Companies usually expense much of the spending that creates brands, software, organizational expertise, and other intangible assets. As a result, a successful trademark might appear nowhere on the balance sheet at a value resembling its economic importance.

By examining share-price movements, the researchers instead estimated the market’s expectations for the future income associated with each mark. Their headline result was substantial: the median trademark was valued at approximately $19.8 million in 2021 dollars.

At the company level, annual trademark output averaged $120 million, equivalent to 3.7% of total assets. For comparison, the researchers calculated that the median trademark in their sample was more valuable than the median patent measured through a similar market-reaction methodology.

Why Trademarks Can Signal More Than Branding

A trademark identifies the commercial source of a product or service. Unlike a patent, it does not protect the underlying engineering. Its economic function is to make an offering recognizable and distinguish it from competing products.

That distinction matters because commercialization is often the point at which technical innovation begins producing revenue. A patent may show that a company discovered something. A trademark can indicate that management is preparing to package, position, and sell it.

The study separates trademarks filed for products already in commerce from intent-to-use applications associated with products that have not yet launched. Intent-to-use trademarks were followed by more new product introductions but did not increase the prices of existing products. This makes them particularly interesting as possible signals of a developing product pipeline.

In-commerce trademarks produced a different pattern. They were associated with higher prices and greater quantities sold, consistent with the idea that legal protection helps established products remain differentiated. The USPTO’s explanation of trademark protection reinforces this distinction: a trademark identifies the source of goods or services, while patents protect technical inventions.

Together, the two filing types capture different stages of commercial development:

• Intent-to-use filings can point toward upcoming products or services.
• In-commerce filings can reinforce an established product’s market position.
• Trademark portfolios can reveal innovation in industries where patents are uncommon.

Trademark Activity Was Followed by Measurable Growth

The market reaction was not the study’s only evidence. Companies generating more valuable trademark output subsequently launched products, increased sales, hired employees, expanded physical capital, raised production, and became more profitable.

A one-standard-deviation increase in trademark output was associated with a 1.4% increase in profits after one year. For the median firm in the sample, that represented approximately $1.6 million in additional profit. The same increase in trademark output was associated with 0.8% greater market share after one year and 2.7% after five years.

The gains came from both scale and margin. One year after stronger trademark activity, production output increased by 0.9% and markups rose by 0.6%. This combination is important. Volume growth alone could reflect aggressive discounting, while higher margins alone could come from cost reductions. Simultaneous improvement suggests that trademarks can support both expansion and differentiation.

The results also indicate that patents and trademarks are complementary. Companies with stronger trademark output subsequently increased patent activity, while companies with more valuable patent output later produced more trademark value. This supports a broader innovation cycle in which invention, commercialization, and brand protection reinforce one another.

Intellectual-property disputes can therefore have consequences beyond legal costs. As a recent Securities.io examination of the tZERO and Securitize patent dispute demonstrated, control over intellectual property can influence competition and strategic positioning across emerging industries.

A New Signal for Fundamental Investors

The most useful conclusion is not that investors should buy every company filing trademarks. Applications vary widely in importance. Some protect minor product variations, defensive names, abandoned concepts, or routine geographic expansions. Large companies may also file batches of related marks, creating activity without a corresponding increase in economic value.

Instead, trademark data can supplement fundamental research. Investors can compare new filings with management commentary, research spending, hiring, capital expenditures, and regulatory activity. A cluster of intent-to-use filings across related product categories may deserve attention when it aligns with other evidence of an approaching launch.

The wording and classifications within applications can also reveal strategic direction. A company known for hardware might begin protecting names associated with subscriptions, financial services, or artificial intelligence. The individual filing may be inconclusive, but a consistent pattern can expose how management intends to extend its technology into new markets.

Tesla offered a recent example when trademark applications connected to the next-generation Roadster appeared before its anticipated unveiling. The filings covered more than the vehicle itself, extending to charging equipment, services, and merchandise. As reporting on the Roadster applications illustrated, trademark classifications can indicate the potential commercial perimeter of a future product.

This approach is especially relevant in sectors dominated by intangible capital. Software, media, consumer technology, financial services, and platform businesses often own relatively few physical assets compared with their market values. Traditional book-value measures can consequently understate the resources supporting their competitive positions.

Recent analysis of America’s expanding intangible economy has highlighted how software, algorithms, intellectual property, and brands now account for much of the value concentrated in leading US companies. Trademark analysis provides a more granular way to examine one part of that otherwise difficult-to-measure capital.

Where Investors Should Remain Cautious

The study does not turn trademark filings into a standalone trading strategy. Its market sample covers 1961 through 2016, meaning the findings span many business cycles but do not directly measure the latest filing environment. The value estimates also rely on short-term stock movements, which can be affected by unrelated news.

Publication may reveal information about the underlying product as well as the legal protection. The authors address this by separating intent-to-use and in-commerce trademarks, but the two effects cannot be perfectly disentangled.

The researchers strengthen their argument through the USPTO’s quasi-random assignment of examining attorneys. Some examiners historically approve a higher percentage of applications than others. Companies assigned to more lenient examiners obtained more registrations and subsequently performed better, providing evidence that trademark registration itself can contribute to corporate performance.

Even so, investors should treat trademark activity as an investigative lead. The strongest signals will usually combine filing activity with product evidence, management investment, addressable-market growth, and a credible commercialization strategy.

Investing in Trademark Intelligence Through Clarivate

The growing value of intangible assets creates demand for tools capable of searching, analyzing, and protecting them. Investors interested in this supporting infrastructure may wish to examine Clarivate, a provider of data, analytics, and workflow software for intellectual-property professionals.

Turning Trademark Data Into Usable Intelligence

Clarivate’s CompuMark trademark solutions cover screening, searching, monitoring, and portfolio management. These capabilities help companies identify conflicting marks, assess availability, monitor possible infringement, and manage protection across jurisdictions.

The company has also been integrating artificial intelligence into intellectual-property workflows, including trademark monitoring and analysis. That positions Clarivate at the intersection of two related trends: the rising economic importance of trademarks and the increasing volume of intellectual-property data that companies must evaluate.

Clarivate should not be viewed as a direct proxy for the trademark values calculated in the study. Its investment case depends on subscription retention, competitive positioning, debt, margins, execution, and demand across its broader information-services portfolio. However, its trademark operations provide direct exposure to the infrastructure used by businesses to manage the type of intangible capital examined by the researchers.

Trademarks Belong in the Investor Toolkit

Patents remain important indicators of technical invention, but they are not universal measures of innovation. Trademarks reach industries and business models that patent analysis frequently misses. They can also appear closer to commercialization, when a company is preparing to turn an idea into a recognizable product or service.

The study’s broader lesson is that intellectual property should be evaluated as a system. Patents can reveal invention, trademarks can reveal commercialization and differentiation, and financial results eventually show whether those efforts worked.

For investors willing to examine public filings beyond quarterly reports, trademark activity offers another window into corporate strategy. It cannot predict every successful launch, but it may reveal where a company is placing its next commercial bet before that wager becomes obvious in its revenue.

References:

¹ Desai, P., Gavrilova, E., Silva, R. C., & Soares, M. (2026). The value of trademarks. Journal of Financial Economics, 185, 104358. https://doi.org/10.1016/j.jfineco.2026.104358