What Is the Meaning of Intangible Assets?
Intangible assets are non-material items that have a lasting value. They include patents, trademarks, copyrights, brand names and different types of licenses such as a franchise license. The value of intangible assets can be appraised using a process called "amortization." Inventors can register their intangible assets like patents and trademarks with the United States Patent and Trademark Office. The patent and trademark office's Patent and Inventors Center provides technical assistance and general information to independent inventors.
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Patent
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A patent is an intellectual property right that is provided to individuals or organizations by the United States government. Patents are assigned to inventors to prevent the unauthorized sale or reproduction of an invention and to promote scientific and artistic innovation. Inventors who receive patents have the exclusive right to their inventions. The U.S. government awards various types of patents including utility patents, design patents and plant patents. Patent rights were established over 200 years ago as a part of the U.S. constitution.
Trademark
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A trademark is an exclusive brand name. Trademarks can contain words, names, symbols or devices. They are used to make distinctions between manufacturers or sellers of specific types of goods. Brand names are used to identify the goods of a manufacturer. Popular brand names include products made by the makers of Adidas, Nike, Pepsi and Kraft. Like patents, trademarks can be registered with the U.S. Patent and Trademark Office. It is illegal to reproduce a registered trademark without a manufacturer's consent.
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Copyright
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Copyrighted materials include original works such as books, music, research or other forms of creative expression. Copyrighted materials are considered intangible assets or intellectual property. Writers, editors and publishers are especially concerned with copyrighting their works to prevent infringements like plagiarism and piracy or counterfeited materials. Copyright laws protect individual creators and small business owners. Under the 1976 Copyright Act, a copyright owner has exclusive rights to reproduce, adapt, distribute or publicly display his or her works.
Considerations
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Unlike physical assets, intangible assets cannot be used as collateral to obtain loans. Intangible assets do not have any physical existence but can provide short or long term value, which they derive through legal or intellectual rights. Intangible assets like patents and copyrights generally have a limited life; however, some forms of intangible assets such as trademarks can be endowed with unlimited life. In some cases, intangible assets, like the brand name Nike, can have a global reach, adding significant amounts of value to a firm.
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References
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