Business Transformation Strategy: How to build a brand moat with trademarks and patents (IP) and avoid AI-driven low-price competition?

As 2026 begins, generative AI is gradually becoming more widespread, and many Hong Kong SMEs, including ours, are facing the same crisis: "If AI can do my job at 1% of the cost, will my company still be worth anything?"

When content, design, and even code can be rapidly replicated by AI, companies that continue to compete head-on with AI in terms of "speed" and "output" are destined to fall into a red ocean. Looking at the strategies of industry leaders, smart business owners are doing one thing: shifting their focus from "selling products" to "selling assets." And these assets refer to legally granted exclusive rights—trademarks and patents.

1. Building a "Brand Moat": Reputation Assets That AI Cannot Replicate

In SEO search trends, we've seen a growing number of entrepreneurs searching for "how to prevent AI from copying your brand." In fact, AI can generate an unlimited number of logos, but it cannot generate a "registered trademark."

Why are trademarks more valuable than AI-generated content?

Legal exclusivity: This is a bottom line that AI algorithms cannot cross. Once you successfully register a trademark, you have the sole legal right to use it. If competitors (or AI users) use similar brands, it constitutes trademark infringement and they will be held legally liable.

Consumer Trust Premium: In an era rife with deepfake technology, consumers increasingly rely on brands to distinguish between genuine and fake products. A protected trademark is the only anchor point for building customer trust.

Transformation Strategy: Don't just treat your trademark as a logo. Leverage your brand awareness to develop a brand licensing model. License your trademark to other manufacturers or service providers, transforming yourself into a brand manager to earn stable royalties and completely escape low-end production competition. Examples include local brand B.DUCK collaborating to launch merchandise, and Ocean Park collaborating with Sanrio characters to create a new themed pavilion.

2. Patent strategy: Focus on "business logic" rather than "execution results".

Many traditional industry owners believe that "patents" are only for tech giants. In fact, in the transformation race, patents are the strongest business asset.

AI excels at "execution"—writing copy, creating graphics, and programming. However, it struggles to invent entirely new "business methods" or "technical solutions." If your company develops a unique workflow or technological system during its transformation, patent protection can grant you market exclusivity. A recent headline story is that AI startup Manus was acquired by Meta for approximately $2 billion less than a year after its founding, demonstrating the immense commercial potential of patents.

How can patents help you change tracks?

Technology Valuation (IP Valuation): Many startups use patent valuation reports to finance their technology as an intangible asset or invest in partners, directly increasing the company's valuation.

Preventing Giants from Dominating: Even large companies with powerful AI cannot freely use your patented technology. This "patent certificate" is your biggest bargaining chip at the market negotiating table. For example, a recent judgment ordered Apple to pay $634 million (approximately HK$4.9 billion) in damages for infringing on the patent of medical technology company Masimo.

3. Make good use of Hong Kong government subsidies: build IP assets at low cost

When searching for "patent application fees," savvy Hong Kong business owners pay close attention to government subsidy schemes. To encourage businesses to leverage intellectual property for transformation, the Hong Kong government offers a range of support measures:

Patent Application Grant Scheme (PAG): Each approved application can receive a grant of up to HK$250,000, covering patent search and application fees. (Now integrated into other grant programs)

Technology Voucher (TVP): If you are introducing technology systems during your transformation process and it involves IP protection, you may also consider applying for TVP funding. (This has been integrated into other funding programs.)

BUD Special Fund: Assists businesses in developing their brands, upgrading and transforming, and expanding their domestic market, including subsidies for trademark registration expenses.

Experts advise that applying for funding often requires a professional patent search report and a comprehensive business plan. Don't miss out on these opportunities that can reduce costs by 50%-90% just because you're afraid of the hassle.

Conclusion: Using "rights" to counter "computing power"

The future of business competition will not be about whose AI runs the fastest, but about who has the most "chips" in their hands.

AI possesses limitless computing power, but it lacks property rights. Businesses should immediately take stock of their intangible assets, lock in brand premium through trademark registration , and protect their innovative logic through patent applications . This is not only legal defense, but also the best path to change course and realize asset appreciation.

Don't want to be left behind by the AI era? Consult Regeasy.hk 's professional intellectual property advisors now to design a complete IP strategy for your transformation journey.

👀 Still want more? There are two more "trump cards" we haven't told you yet!

While trademarks and patents are important, copyrights and registered designs are often overlooked hidden goldmines for the cultural and creative, design, or software development industries.

-Who owns the AI-generated images?

-Will I be sued for using AI-generated images to approximate IPs?

-How can you prevent your product's appearance from being copied "one-to-one" by Taobao?

-Is there protection even without registration?

-The Myths and Truths of Copyright?

In our next article, we'll delve into **"Copyright and Appearance Design: The Last Line of Defense for Asset-Light Businesses"**, teaching you how to protect the value of your creativity at the lowest possible cost. Remember to follow us and don't miss this valuable article!