When you launch an advertising campaign through AdWords, billboards, PR articles or in other media, you will attract new customer base. New customers should remember your company and your offering through a single phrase or logo, and, if they need your products or services in the future, they will return to your company. Once the brand or logo is remembered in the minds of your customers, you should protect it from use by competition, which wants to attract your clients
A common situation when the owners of the brand decide to register a trademark is a dispute in the company. In this situation one of the partners leaves the company and the remaining partners register a trademark to prevent the former partner from competing with their company by using the same brand.
Owners of a well-run business often want to share their experience with younger or starting entrepreneurs and help them by lending them their brand or logo. This brand or logo already has an established reputation among customers, either through repeated ads or recurrent good experience with their products or services. This concept is called franchising. When the former owner of brand or logo intends to lend it to somebody, it is necessary to have this brand or logo registered as a trademark. After you lend your label or logo, you can come into disagreement with the borrower about the quality of the products or services provided under the brand or logo, or you can disagree about the extent of permissible competition. In such situation, you, as the owner of the brand or logo, need to be exclusive owner of the brand or logo.
If a trademark is owned by foreign entities, the domestic entities have to pay royalties for use of the trademark. Such royalty payments are tax expense. However, it is important that these tax expenditures, which reduce the tax base and thereby the amount of tax, are not subject to a withholding tax, and, therefore, they do not abate tax. Withholding tax can be avoided by the payment of royalties to mother companies incorporated in other EU state, because the EU Directives command for elimination of barriers in the single European market. To structure trademark royalties correctly, seek our professional help.