The useful life of trademarks
Trademarks are often deemed indefinite simply because they can be continually renewed. However, almost no asset is imperishable and the indefinite life assumption has serious consequences for the values ascribed to trademarks.
Expected remaining life is a major determinant of any asset’s value. The longer the asset generates profitable returns into the future, the higher its value. Most intellectual property has a finite life. With patents, remaining lifetime is determined by expiry of the patent itself; within a few years, the patented technology will become available to everybody. With copyrighted works such as music, films, text or pictures, their economic life is typically determined by how up to date they are; most copyrighted works depreciate fast and few are timeless. Similarly, software and databases need continuous updating to remain useful. Know-how and trade secrets cannot even be updated and are typically deemed to lose all of their value within a few years. Thus, intellectual property generally has a limited life in a world of continuous innovation. However, the situation is different for trademarks.
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