What Is Goodwill Intellectual Property Definition?
The goodwill intellectual property definition is a business asset like any other intellectual property (IP) but refers to a business's relationship with certain clients or customers.3 min read
The goodwill intellectual property definition is a business asset like any other intellectual property (IP) but refers to a business's relationship with certain clients or customers. Goodwill can belong to an individual or a business as a whole.
What Is Goodwill?
Like most intellectual property, Goodwill is not a tangible thing, but it is essential to successful businesses nonetheless. A business or person's goodwill toward consumers keeps them loyal to the company and can even generate more customers for the business.
Another word for a business's goodwill is its reputation. Many tort cases involving goodwill claim that a plaintiff's reputation or goodwill was damaged because of the defendant's actions.
Goodwill has also been defined as a client or customer's investment in a particular business.
In the world of accounting, goodwill is calculated as a company's value beyond the fair market value of its assets. This type of goodwill matters most when companies are negotiating business purchase agreements.
Other types of intellectual property, like trademarks, can be wrapped up in a business's goodwill value. Consumers may be attracted to a particular trademark because they associate it with products or services they trust. In that case, the trademark has its own goodwill.
In leasing agreements, goodwill can refer to how certain tenants might increase the value of the building.
Goodwill Related to Trademarks
Many trademarks are basically the name of a business. Other trademarks can combine the name of a business with a logo to form what's called a combined mark, or the logo alone can be protected by a trademark.
Trademark goodwill is usually only assessed during business purchase agreements as well. Tangible assets are an obvious consideration when deciding on the monetary value of a company. However, trademark goodwill can also add value to a business, so it's very important to have it properly assessed.
How to Protect Goodwill and Trademarks
There are two general types of trademarks:
- Common law trademarks
- Registered trademarks
The USPTO, or United States Patent and Trademark Office, handles trademark registering. Any time a business owner starts a company and chooses a business name, they automatically create a common law trademark. Common law trademarks are not registered with the USPTO and, therefore, are not legally allowed to use the trademark symbol. As a result, the process of choosing a business name requires careful consideration. If a business owner doesn't first check to make sure his or her desired name isn't registered as a trademark, they could end up with an infringement case filed against them.
Business formation and intellectual property lawyers are a great resource when starting a company. They can not only help make sure no competitors or other businesses infringe on your rights, but they can also ensure that you don't accidentally infringe on the rights of another. Trademarks can be easily searched online using the USPTO database.
Enforcing Infringement Law
Even though the USPTO registers trademarks, it does not enforce them. The enforcement of trademark protection is in the hands of its owner. If you believe that someone is infringing on your trademark, you should contact a lawyer to help you enforce your intellectual property rights (IPR). This process of enforcement usually begins and ends with a cease and desist letter warning the infringer that you will file suit if they continue to use your protected IP.
Goodwill as Unregistered Intellectual Property
When starting a company, business owners use their own ideas and creativity to get things up and running. As the business continues, owners and employees put their own designs into many aspects of the business that draw customers.
In order to encourage these creative processes, the government offers protection for the intellectual property of workers. These policies give creatives peace of mind while they create their intellectual property and grow their business. Most individual creations can be registered for intellectual property protection.
- Trade secrets
Goodwill is considered the fifth type of IP protection by many.
If you own a business, it's essential that you understand the different types of intellectual property protection, which protect your business's brand.
If you need help with goodwill intellectual property definition, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.