A Comparative Guide: Choosing Between Hypothecation, Licensing and Assignment
Trade marks are valuable assets for businesses, and they can be utilised in various ways to achieve commercial benefits. Three key concepts in the management of trade marks are hypothecation, licensing, and assignment. Each of these has distinct commercial implications and advantages.
| Hypothecation | Licensing | Assignment/transfer |
| Business owners gain access to capital while retaining ownership | Business owners generates revenue and expands brand presence through permitted third-party use | Business owners monetises assets and supports strategic business decisions |
| Commercial advantages | Commercial advantages | Commercial advantages |
| Access to Capital | Revenue Generation (royalty payments and/or licensing fees) thus monetising the trade mark without selling | Monetization of Assets, subject to the market value |
| Retention of Ownership | Brand Expansion into new markets | Supports strategic business decisions (merger, acquisition or restructuring) for streamlining operations and consolidating brand assets |
| Tailored Financial Flexibility: | Risk Mitigation when entering new markets | Expansion opportunities when entering new markets through new ownership |
| Quality Control – secure brand reputation protection | Risk management through risk ownership |
Hypothecation, licensing, and assignment of trade marks each offer unique commercial advantages. Understanding these concepts can help businesses make informed decisions about their intellectual property portfolio management.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
