Business IP and Intangible Asset Blog, Michael D. Moberly

Intellectual Capital Calculating Infringement Damages?

May 11th, 2013. Published under Intangible Asset Value, Intellectual capital management.. No Comments.

Michael D. Moberly     May 11, 2013    ‘A blog where attention span matters’.

Here is a hypothetical which represents one of multiple issues in the global arena of intangible assets that I find pose persistently troubling aspects which I have yet to find definitive answers.

Let’s say for example, Company A produced, possesses, and utilizes, what I term ‘proprietary intellectual capital’ (know how) or ‘PIC’ for short.  When I arrive at Company A, as an intangible asset strategist, to conduct training and assessment of their intangibles, it’s apparent management team are respectfully lacking in achieving operational familiarity with intangible assets, i.e., identifying, unraveling, assessing, utilizing, exploiting, etc.

Again, this is a hypothetical, but one which, I would venture to say most every intangible asset strategist and practitioner has or will likely experience.  In this instance a management teams’ failure to recognize PIC as possessing and contributing identifiably specific value, efficiencies, or competitive advantages to their company.

I should say in this management teams’ defense however, this overall circumstance is not uncommon, in that many firms have, deeply embedded, in their routine operations and processes, a myriad of intellectual, structural, and relationship capital which frequently, due to its longevity and endurance is, for lack of a better explanation, taken for granted and remains unacknowledged as a distinguishable (intangible) asset that may deliver contributory value, competitive advantages, or efficiencies, etc., anyone of which could be exploited beyond their current use (status).

An additional (obvious at this point) exacerbating factor to this hypothetical is that the company management team has no perspective for the importance or necessity to preserve (safeguard) the contributory value and competitive advantages particular PIC is delivering and which the company has grown dependant.

So, one dilemma is, should or can PIC’s as portrayed here, be properly and defensibly cast, in an ex post facto manner, as trade secrets?  Admittedly, that’s very doubtful. Or, could the PIC meet, again in an ex post facto manner, the six requisites of trade secrecy when in fact, the proprietary intellectual capital has neither been recognized nor treated in a manner consistent with the requisites of trade secrecy, nor are any procedures in place to safeguard – preserve control, use, ownership, and monitor value, materiality and risks associated with infringement, theft, and/or compromise of this PIC?

A second, and equally important dilemma in my view is that if, not when, this particular PIC is stolen, copied, or otherwise compromised, absent having any specific safeguards in place, does Company A have any recourse at all, in terms of damages, assuming of course, the firm becomes aware, in a timely fashion that such adverse acts have occurred?

As articulated by Scott Hampton of Hampton IP and Economics, Title 35, Section 284 of the United States Code, often referred to as the ‘patent statute’, states that patent infringement damages should be in an amount adequate to compensate the patent holder for the defendant’s infringement of the patent-at-issue.  But, in this hypothetical, Company A, the developer and user of this PIC has neither filed or been issued a patent, so that remedy strategy seems, at best, irrelevant.

When litigation is evident to try to settle infringement, theft, misappropriation, and/or asset compromise claims, plaintiffs will routinely make a determination, usually early in the pre-litigation process, whether to seek lost profit damages, or limit remedies to only a reasonable royalty, again it’s certainly questionable whether either applies in this hypothetical.

Let’s recall now that today, globally speaking, 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets of which conventional intellectual properties are one.  But, a significant percentage of companies purposefully or otherwise, opt out of the conventional IP path.

Hopefully, this brings clarity to my initial dilemma (question), which is, can Company A, with its revenue – competitive advantage producing intangible assets, ever be positioned to seek lost profit damages if a key PIC were to be stolen when conventional intellectual properties, i.e., patents or trade secrets are either not in place or maintained?  More specifically are there satisfactory remedies to firms like Company A proprietary intellectual capital has been misappropriated?

Hampton says there is no single method for calculating lost profit damages, but the most common is a four-part test first recognized 1978 in the Panduit Corporation v. Stahlin Brothers Fibre Works, Inc. case.

According to the Panduit test, to obtain damages, the profit, in this instance, Company A could make but for the infringed intangibles, a real patent owner must prove…

• demand for the (patented) product or presumably process.
• the absence of acceptable non-infringing substitutes in this market space.
• manufacturing and marketing capacity to exploit the demand, and
• the amount of profit (the patent owner), i.e., Company A would have made.

Hampton also points out there are other means of proving lost profit damages in addition to the Panduit test, such as measuring increases in the cost of product inputs.  Could Company A then plausibly characterize the latter as costs related to the development (internally) or acquisition (externally) of other suitable intellectual capital to replace that which had been misappropriated – comprised?

Let’s be clear. I am only exploring potential remedies or defensible strategies to secure economic – competitive advantage relief for companies operating in the increasingly and irreversibly competitive and predatorial knowledge-based global economy where growing percentages of most company’s value, revenue, profitability, and sustainability are inextricably linked to intellectual, relationship, and structural capital, i.e., intangible assets, most all of which are quite vulnerable when effective processes – procedures are not in place, i.e.,

• to sustain – preserve asset control, use, ownership, value, and monitor their materiality and risk.
• for asset stewardship, oversight, and management.

A special thanks to Scott Hampton, Hampton IP and Economics for the inspiring this post (www.hamptonip.com)

Each blog post is researched and written by me with the genuine intent it serves as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of  unsubstantiated commentary or information piggy-backed to other sources.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Assets The Rapid Maturation Of Ideas!

April 26th, 2013. Published under Intangible asset focused company culture., Intangible Asset Value, Intangibles as strategic assets. No Comments.

Michael D. Moberly     April 26, 2013    ‘A blog where attention span matters’.

As noted repeatedly in this blog and by numerous intangible asset strategist colleagues, there is no other time in business governance history when, globally speaking, larger percentages, i.e., 80+%, of most company’s value, sources of revenue, and ‘building blocks’ for growth and profitability are more rooted in – evolve directly from intangible assets, i.e., intellectual property, structural, relationship, intellectual/human, and strategic capital, proprietary know how, brand, and reputation, etc.

So, today it has become an indisputable economic fact – global business reality that the primary sources of most company’s value and revenue have shifted from tangible (physical) assets, e.g., property, equipment, inventory, etc., to intangible (non-physical) assets.  In other words, the global business landscape is being less shaped and influenced by the development, production, and/or flow of physical (tangible) goods and services than it is by the flow of ideas, information, and other forms of intangible assets.

One consequence is that in today’s tightly wound and increasingly compressed transnational R&D environments, product cycles, and business transactions,  ideas can mature very rapidly as ‘value add’ and revenue producing competitive advantages or intangible assets.  But, if those assets are ineffectively managed, i.e., protected, preserved, and monitored, etc., they can easily meld into open (public domain) sources or otherwise be vulnerable to myriad forms of compromise.  The reality then becomes, once such assets enter, inadvertently or otherwise, the public – global domain, conventional intellectual property (law) protections carry little, if any deterrent affects and becomes akin to ‘the genie getting out of its bottle prematurely’.  Trying to get ’the intangible asset genies’ back into their managerial and legal cocoon becomes a frustrating, time consuming, legally challenging, and costly experience.  Should such risks materialize, the rightful (intangible) asset holder (developer, owner) should be prepared to expect the assets to be, at best, only partially recoverable, and, at worse, irrevocably lost.

The long held American adage ‘talk is cheap’ no longer has relevance, at least in my view, in the current go fast, go hard, go global business transaction environment.  Unfortunately though, this adage remains somewhat indicative of a broader attitude which a significant percentage of business decision makers still hold regarding the value of information-based (intangible) assets.  That is, information is frequently considered to be valuable only if, or when, some specific action can be taken as a result.  In this context, it’s important to recognize that mere ‘ideas’ can mature very rapidly today, and, ‘in the right hands’ can be quickly converted to ‘contributory value and sources of revenue for a business.

Somewhat unfortunately, the consistently expanding and seemingly insatiable (nanosecond) demand for information and communication connectivity represents a growing influence about how large percentages of business decision makers conceive and use information-based assets, that is, in contexts that are primarily oriented toward short-term application versus a long term and/or strategic use and contributory value.

One result, often falling under business decision makers’ radar, influenced in part by the presumed speed in which we prefer ‘things to happen’, is that information-based assets, i.e., ideas and intellectual capital have become more than mere tools to manage other assets, they are now stand alone commodities with varying cycles of contributory value and relevance to the owners.  (Branscombe, Anne Wells. Who Owns Information? From Privacy to Public Access. Basic Books 1994)

The real ‘back story’ in my view, is that (ideas) intangible assets can advance an organization or company economically, competitively, and strategically only so long as the assets’ control, use, ownership, and contributory value is monitored and preserved.  In other words, there is effective stewardship, oversight, and management (of the assets) in place.  Similarly, it’s important to recognize that the contributory value of intangible assets and intellectual property seldom remain constant (static), rather it can change or fluctuate, sometimes quite rapidly for various reasons which is the rationale that value preservation, asset monitoring, and risk mitigation measure be sufficiently flexible to reflect the assets’ status, value cycle(s), defensibility, and sustainability.

Again, when risks to information-based intangible assets materialize, they can impact a company in many ways, e.g.,

• undermine competitive advantages, strategic planning, new business/product rollouts, etc.
• erode anticipated (profit) margins
• create time consuming distractions that disrupt and/or impede a projects’ momentum,
• entangle assets in costly and lengthy legal disputes
• cause investors to change their exit strategies and/or deter future rounds of investment

A good thing is, more management teams are recognizing the importance, through blogs like this and those of my colleagues, of taking steps to safeguard and preserve the standalone and contributory value and competitive advantages their intangible assets produce, the more profitable and sustainable their decisions and transactions will be.  A downside is, there remain percentages of management teams who sometimes…

• are too quick, in my view, to adopt a lawyer-law centric vs. a asset management, stewardship, and oversight approach for enforcing intangible asset rights, in part because they may be unfamiliar with their options, the broad nature of asset risks, and business – strategic needs, or
• mistakenly assume computer/IT security is synonymous with intangible asset preservation, that is to say, all (valuable) intangible assets exist in electronic ‘bits and bytes’ formats and can be adequately protected by conventional firewalls and passwords.
• mistakenly assume intangible asset safeguards will impede the flow and accessibility of intangible (information) assets necessary for business operation minimums.
• mistakenly place too much trust and faith in all employees, business partners, and others who have knowledge and/or access to their company’s intangible assets or ‘crown operating – profit making jewels’.

It remains essential then, that decision makers have a clear understanding where the value of their firm, which they have fiduciary responsibilities, lie and the form and context which that value manifests itself, i.e., intangible assets, competitive advantages, intellectual capital, etc., and ultimately perhaps, as intellectual property.

Though frequently characterized as being cliché, the emergence of the still relatively new global business economy dominated by intangible, rather than tangible assets, is prompting increasing numbers of business decision makers and boards to rethink the way they make decisions, manage, and value their companies and the intangible assets they produce and/or acquire.

What’s exactly ‘new’ about the new (knowledge – intangible asset dominated global) economies remains somewhat debatable, say’s Dr. Baruch Lev of New York University. But, one important feature about the 21^st century is crystal clear, he confirms, intangible assets are playing an increasingly important and integral role in most company’s value and wealth creation potential.

Lev goes on to say that economic activity today consists increasingly of exchanges of ideas, information, expertise, and know how, which are, of course, intangible assets.  Thus, company profitability is more often driven by its collective competencies and capabilities (again, intangible assets) than by control over or use of physical resources or tangible assets.

Each blog post is researched and written by me with the genuine intent it serves as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community.   Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of  unsubstantiated commentary or information piggy-backed to other sources.  Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Intangible Assets Beat The Odds Of Infringement, Compromise, Theft…

March 18th, 2013. Published under Intangible asset protection, Intangible Asset Value. No Comments.

Michael D. Moberly   March 18, 2013    ‘A blog where attention span matters’.

It’s in every company’s interest, if not responsibility, to have practices – procedures in place now that are geared toward ‘beating the odds’ that their valuable, revenue and competitive advantage producing intangible assets will be vulnerable – fall prey to adverse acts/events, i.e., infringement, misappropriation, and counterfeiting.

Unlike other forms of intangible assets, i.e., intellectual property (patents, trademarks, copyrights) there is no certificate issued by the government to a company and/or asset holder that says…

• these are your intangible assets, i.e., proprietary competitive advantage driving intellectual, structural, and relationship capital as well as other forms of unique and/or specialized know how
• sustaining control, use, ownership, and monitoring (asset) contributory value, materiality, and risk falls exclusively to company/organization management teams in the form of a fiduciary responsibility.

Too, conventional forms of IP (intangible asset) enforcement, i.e., patents, trademarks, copyrights, and trade secrets are certainly less relevant today insofar as constituting markers of value or long term profitability.  True, patents, trademarks, and copyrights remain requisites for conveying ownership and standing to address disputes and challenges, these enforcement mechanisms do little in the way of representing a deterrent favorably changing the vulnerability, probability, and criticality risk equation relative to today’s increasingly competitive, predatorial, and ‘winner take all’ global business transaction environment.  Intangible asset and IP misappropriation, infringement, and/or counterfeiting is now culturally and economically embedded in many countries’ GDP.

Once a company’s assets are gone, they’re probably gone forever.  In large part that’s because core asset value and competitive advantages can be quickly identified and extracted from assets that have been compromised and instantaneously disseminated to a global labyrinth of information brokers, infringers, and counterfeiters, which may include economic-competitive adversaries.  Compromised assets, and their value, are often, worst case irreplaceable and irretrievable.

With respect to the valuation of a company’s IP, intangible assets, and (proprietary) competitive advantages, etc., it is unwise, in my judgment to consider value to be static or not susceptible to countless risk and market influenced fluctuations.  In my view, management teams should exercise respectful skepticism and caution about accepting (asset) valuations which are framed – produced in ‘snap-shot-in-time’ contexts.  It’s important to recognize assets’ (contributory) value can fluctuate and seldom, in my view, remains static for indeterminate periods.  Aspects that we certainly know for sure are that once an asset has been compromised, economic and competitive advantage hemorrhaging can (a.) commence immediately, (b.) it will be global, and (c.) very costly and time consuming to stop or reverse.

Of course, management teams, c-suites, and boards are obliged to recognize these economic – competitive advantage realities through the lens that 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets they produce internally or acquire externally.

The key takeaway here for management teams is to avoid treating intangible assets as being readily or easily renewed.  To bring clarity to this view, let’s very respectfully review some basics!

An idea, by definition, exists solely in one’s mind, where it remains relative secure, but not terribly useful unless and until it is effectively articulated in a business (commercialization, monetization, and marketing) context.   An obvious requisite to monetizing and commercializing an idea is that it must, at some point, usually in its earliest stage of development, be expressed, presumably to trusted others, and therein lies the starting point for experiencing vulnerabilities, risks, and challenges (to the idea as a potentially valuable intangible asset) to the originators, holders, and/or owners.

Fundamentally, the protection of ownership rights to ‘products of the mind’ represents a basic social contract between society, its government, and the individual(s) who created the idea. (Choate, p.218)

Today, the risks to intangible, particularly intellectual, structural, relationship capital, and reputation assets are globally asymmetric, change rapidly, and, when they occur, can instantaneously stifle, undermine, and/or substantially erode…

• competitive  advantage – economic momentum
• specific transactions or strategic business plans
• an assets’ value and projected (future) profitability.

Of course, this is particularly relevant to the rapidly rising numbers of companies globally which are increasingly reliant on and would be quite correctly considered ‘intangible asset intensive’ companies.

In the pre-Internet era, when intangible asset compromises occurred, usually template-based business continuity – contingency plans were executed with emphasis on containing the damages and/or extent of the loss.  Today, however, while containment may be admirable, it does not reflect the speed in which (intangible, non-physical) assets can be surreptitiously acquired and disseminated.  And, once an asset has been compromised, a strategy based on containment, in the conventional sense, is seldom a viable option.  That’s largely because dissemination – distribution of illicitly acquired assets is now measured in seconds and minutes, not days, weeks, or months.  In other words, intellectual, structural, and relationship capital, explicit know how and competitive advantages can be acquired and manifest as products and/or services and infect, i.e., appear in heretofore legitimate global supply lines in extraordinarily abbreviated periods of times.

Today, the contributory value and competitive advantages embedded in those intangible assets researched and targeted by global cadres of economic and competitive advantage adversaries can be quickly discerned and extracted, whole, or in part and instantaneously distributed to a global labyrinth of extraordinarily skilled and organized information brokers, counterfeiters, and/or economic-competitive adversaries, including state and non-state actors.

So, again, while conventional intellectual property enforcement mechanisms, i.e., patents, trademarks, and copyrights remain the mainstay for distinguishing ownership and standing for responding to (legal) disputes, challenges, and array of other risks, the fact is, they’re reactive and require self-policing.  In addition, the deterrent features those mechanisms are presumed to bring to their holder, remain, are, in my experience, misunderstood and worse, utterly ignored and circumvented by global cadres of infringers and misappropriators.

There are few credible (strategic) indicators – evidence that the current trends of global (intangible) asset infringement, product counterfeiting, and misappropriation subside.   With this perspective, I suggest that prudent and forward looking – thinking management teams should duly reflect on the potential obsolescence of conventional intangible asset enforcement mechanisms as representing the primary instruments to effectively safeguard intangible assets.  After all, intangible assets will be – are in play and integral to most every business transaction!

Let’s be clear though, I am not suggesting that conventional intangible asset enforcements should be eliminated.  However, the reality is that the once respected rights and protections afforded to innovators and entrepreneurs (through patents, trademarks, and copyrights, Article I, Section 8, U.S. Constitution) are now being routinely outpaced, circumvented and disregarded globally.  Any assumption today, and for the foreseeable future that the issuance of a patent, will serve as a standalone deterrent (i.e. inhibit infringement or misappropriation) and otherwise be sufficient for the rightful holder to sustain full control, use, and (asset) ownership rights, is unfortunately, a not-so-credible business reality.

Each blog post is researched and written by me with the genuine intent they serve as a useful and respectful medium to elevate awareness and appreciation for intangible assets throughout the global business community. 

Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information piggy-backed to other sources, or unsubstantiated commentary.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

‘Harvesting Intangible Assets’…A Review of Andrew Sherman’s Book!

January 22nd, 2013. Published under Book Review, Intangible asset training for management teams., Intangible Asset Value. No Comments.

(Harvesting Intangible Assets: Uncover Hidden Revenue In Your Company’s Intellectual Property  by Andrew J. Sherman)

Michael D. Moberly   January 22, 2014

Let me say at the outset, the perspectives put forth here regarding my assessment of Andrew Sherman’s ‘Harvesting Intangibles’, are dually rooted, first in a careful study of Sherman’s book, and second, a personal conversation (meeting).  Unmistakable takeaways of both are clear; Sherman literally radiates a strong passion for intangible assets! Too, he has the requisite practical knowledge, operational familiarity, legal training, and strategic visioning to effectively ‘bring it altogether’ and intersect intangible assets with positive business (transaction) outcomes.  Sherman truly recognizes and consistently conveys throughout his book, the increasingly strategic role intangibles play in companies (globally) as contributors to and generators of value, revenue, and sustainability.

To be sure, Sherman has very deservedly accumulated the requisite ‘street creds’ as many readers of this blog recognize him as a much respected, articulate, and forward looking thinker, and practical tactician in the intangibles’ arena, e.g., named by Fortune as one of the ‘Top Ten Minds in Small Business’ and Inc. magazine recognized him as one of the 19 leading resources and advocates for growing companies, of which intangible assets are clearly an important component.

‘Harvesting Intangibles’ is replete with Sherman’s sage counsel regarding the nexus of intangible assets and business.  This clearly and most properly positions him to be one of a respected handful of global ‘go to professionals’ on intangibles, particularly the millions of small, mid-size, early stage, and start-up firms, which concurrently form the foundation to the education and training company, ‘Grow Fast, Grow Right’ that he founded.

Sherman built ‘Harvesting Intangibles’ on a distinctive and understandable ‘agrarian’ metaphor platform in which he describes intangibles as being (a.) planted (developed or acquired), (b.) nurtured (cared for and integrated), (c.) safeguarded (protected), and of course (d.) harvested (applied, commercialized, and/or monetized) at opportune times.  This sequence is necessary, Sherman advocates, as the most correct path to maximize intangibles’ contributory value and sources of revenue, which most are capable.

Throughout ‘Harvesting Intangibles’, Sherman respectfully pushes many conventions (i.e.,past practices, antiquated attitudes) off the table by demonstrating that (a.) attitudes, i.e., this is the way it’s always been done, and if it doesn’t seem to be broken, why try to fix it, now?, and (b.) practices, i.e., balance sheets are an archaic measure of any company’s true intrinsic value, and are no longer well-suited for operating knowledge (intangible asset) intensive businesses.

Another strong positive is that Sherman uses a distinctively normative, but respectful, style (i.e., metaphors, language, etc.) to articulate his ideas, positions, and perspectives to aid readers, some of whom may be, up to this point, operationally unfamiliar with or disinterested in intangibles.  That includes not just c-suites and boards, but business unit management teams as well.  Of course Sherman’s objective is to respectfully aid them to more effectively identify, capture, and exploit the value and other contributory elements of (their) intangible assets through better asset management, stewardship, and oversight practices.

Too, Sherman has integrated numerous informative graphics and visuals in ‘Harvesting’ that are not merely modified replications of others’ work.  Instead, each graphic/visual can be readily grasped and conveys a positive strategic, rather than a fear orientation, which in my view is precisely the tact to take.  Equally favorably, Sherman’s graphics and visuals can be interpreted and framed by management teams for (asset) comparison and/or measurement-performance purposes.

As with many books, relatively small things resonate with readers that collectively set a book aside from it competitors.  One such example is that Sherman commences each chapter with a relevant and thought provoking quote which I found especially compelling and relevant to those of us who are truly ‘boots on the ground’ intangible asset practitioners.  For example, a quote attributed to Charles Browder (Chapter 6) is a follows…

“a new idea is delicate…it can be killed by a sneer or a yawn…it can be stabbed to death by a joke, or worried to death by a frown on the key person’s face.” 

For most intangible asset advocates and practitioners know this caricature represents as unfortunate business reality and have likely experienced it personally on numerous occasions. This example, along with countless others, already eluded to further reveals Sherman’s passion for and understanding of intangible assets.  Too, it adds much needed clarity that will respectfully elevate management teams’ operational familiarity with intangibles relative to (a.) their development, (b.) how they can be best exploited, and (c.) the all-important value proposition for a range of business sizes and sectors.

To address this further, Sherman includes countless real and thought provoking examples of  actual ‘harvesting intangibles’ to provide readers with practical insights which can be rapidly and efficiently applied by seasoned business leaders who recognize the rapidly expanding (fiduciary) responsibilities associated with managing and exploiting intangible assets.

Those still unfamiliar with Sherman’s work should not conclude ‘Harvesting Intangibles’ merely represents a ‘one hit wonder’.  Sherman has published numerous other books and articles of this caliber, many of which press a solidly framed business orientation for intangible assets to forever advance his unique theme of ‘harvesting intangibles’.

As readers of this blog know well, I am a strong advocate of intangible assets.  Such advocacy, as Sherman articulates so well, comes with responsibilities which ‘Harvesting Intangibles’ elevates, due in no small part to Sherman’s training and expertise in intellectual property matters.

And finally, who should be reading, not just ‘Harvesting Intangibles’, but other works of Sherman?   For me, the answer is straight forward, that is, most all have relevancy in university classrooms as well as company boardrooms!

Ultimately, a message I trust readers of ‘Harvesting Intangibles’ will quickly and readily recognize by page five, is that clinging to conventions of past practice that ignore, dismiss, or otherwise underestimate the role and contributory value of intangible assets and the responsibility to consistently and effectively engage them will lead to business adversity vs. business sustainability and profitability.

To be sure, Sherman’s book is certainly not one of the growing numbers of books that I, not-so-respectfully categorize as the ’10 easy steps from rags to riches in one minute per day’.  Instead, Sherman’s book is embedded with relevant, timely, and real knowledge framed in a manner that will not just add reasoned value to readers, but again, provide a viable and strategic path to more complete utilization of most every company’s intangible assets.

Harvesting Intangible Assets: Uncover Hidden Revenue In Your Company’s Intellectual Property  by Andrew J. Sherman.  American Management Association, 2012  (ISBN – 13: 978-0-8144-1699-0)

My blog posts are researched and written by me with the genuine intent they serve as a worthy and respectful venue to elevate awareness and appreciation for intangible assets throughout the global business community.  Most of my posts focus on issues related to identifying, unraveling, and sustaining control, use, ownership, and monitoring asset value, materiality, and risk.  As such, my blog posts are not intended to be quick bites of information, unsubstantiated commentary, or single paragraphed platforms to reference other media. 

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of any of my posts, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction.  I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com.

Intangible Asset Valuation Should Focus On Contributory Value…!

December 27th, 2012. Published under Intangible Asset Value. No Comments.

 Michael D. Moberly     December 26, 2012

When clients I serve, find it necessary to have their intangible assets valued, I draw their attention to the necessity for the valuation to address – reveal much more than merely the assets’ standalone value, that is, without regard to their relationship – connection to other (revenue, competitive advantage producing) assets.

Instead, I prefer (intangible) asset valuations be framed (conducted) on the basis of what I refer to as their contributory value, i.e., as individual and/or integrated clusters of intellectual, structural, or relationship capital relevance or contribution to (current) projects, products, services, new ventures, R&D, efficiencies, competitive advantages, and/or revenue streams, etc.

My rationale for encouraging intangible asset valuations be conducted in this manner are…

• 65+% of most company’s value, sources of revenue
  and ‘building blocks’ for growth, sustainability, and profitability today, lie in – evolve directly from intangible assets.  In other words, in this knowledge-based global economy, companies are becoming more intangible asset intensive!
• this approach will provide boards, c-suites, and management teams with much needed, but frequently overlooked insights about their intangible assets, i.e., best practices for their management, stewardship, oversight, monitoring, and protection based on their contributory value and functionality cycles, not for the lifetime of a company, and
• most conventional (asset) valuation methodologies are variously subjective or speculative which tends to inflate or minimize asset value.

The ‘contributory value’ approach, allows assets to be more readily tracked, traced, and  measured relative to their origins and contributions which minimizes subjective and/or speculative inputs that have little or no bearing on assets’ actual contribution to a company’s and/or business unit’s core objectives.

When intangible asset valuations are applied specifically to intellectual property, i.e., patents, I wonder, particularly as auctions of standalone patents are becoming a global fixture, whether, by applying the ‘contributory value’ approach, it may lessen or perhaps even alleviate the need for conventional IP-only valuations, other than to establish a minimum bid. An example of such a patent auction was the ICAP Patent Brokerage Auction held in San Francisco in July, 2012.

Should this ‘contributory value’ approach be recognized as a viable methodology for valuing intangibles, it will, in my judgment provide business decision makers with much needed and practical (additional) strategic insights and options for optimizing the contributory value of their company’s intangibles.

Too be sure, conventional (business) valuation practitioners will surely critique and possibly find some disagreements with my ‘contributory value’ methodology as described here.  I am the first to admit the methodology warrants more study.  However, I do not believe it should be summarily dismissed, particularly during a time when management teams, c-suites, and boards are assuming more fiduciary responsibilities (regulatory) mandates for the management, stewardship, and oversight of intangible assets under their control, use, and ownership.

After all, it is my genuine intent to not only elevate operational awareness of intangibles, but contribute to learning how to develop, utilize, and exploit intangibles in the most efficient, effective, and profitable manner possible.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance. And, I always welcome your inquiry at 314-440-3593.

Safeguarding Intangible Assets Through Restrictive Covenants

November 23rd, 2012. Published under Intangible Asset Value, Managing intangible assets. No Comments.

Michael D. Moberly   November 23, 2012

The broad intent of this post is multifold, i.e.,

•  address (examine) personnel restrictive covenants in a way that
• recognizes their contributory role in safeguarding company’s most valuable intangible assets, and
• encourages senior security, HR, c-suite, and legal executives to recognize the necessity for collaboration insofar as formulating specific, transparent,  and defensible restrictive covenants.

Intangible assets are now the globally universal and dominant sources of most company’s value,  revenue, profitability, and sustainability.  Conservatively, 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets.

So, whether one is a senior security executive or part of a company’s expanding (c-suite) management team, the objective is to help a company and/or client build and maintain a profitable and on-going concern of which an integral obligation, be it cast as a fiduciary responsibility or in a contractual context, is to contribute to safeguarding those (intangible) assets by sustaining control, use, ownership, and monitoring their value and materiality throughout the assets’ respective life, value, and/or functionality cycle.

Intangible assets include not only conventional forms of intellectual property, i.e., patents, trademarks, and copyrights, but also a company’s trade secrets, along with an array of proprietary innovation and unique operational knowhow in the form of (a.) intellectual, (b.) structural, and (c.) relationship capital.

Speaking from 20+ years of experience, in part, because intangible assets are intangible, i.e., non-physical, their vulnerability to misappropriation, theft, infringement, etc., seldom tidily fits conventional risk management – prevention regimes which, in most instances are designed for tangible-physical assets.   One consequence to this ‘un-tidiness’ is that the full extent of intangible asset losses, compromises, thefts, and misappropriations, etc., are more likely to go un-noticed, unreported, or objectively measured.

This situation will likely persist unless and until companies formally recognize their intangible assets and design – put in place effective processes and procedures to consistently identify, assess, safeguard, and monitor the value, materiality, and vulnerability of key revenue – competitive advantage driving intangible assets.

The Preliminary Injunction Hearing

In my view, processes, procedures and restrictive covenants to safeguard companies intangible assets should be designed and implemented based on an inevitability not merely a probability, that asset risks – threats will materialize and reach the point that legal action is warranted to try to recover control, use, ownership, value, competitive advantages, and market space of misappropriated, infringed, stolen (intangible) assets.

Legal action will almost always involve a (preliminary) injunction hearing in which the plaintiff’s primary objective is to very ably and convincingly demonstrate, to the satisfaction of the court, that all that could be reasonably expected and necessary, in accordance with existing standards and/or best practices was in place and fully implemented, i.e., relevant procedures, policies, and practices to effectively and consistently safeguard a company’s key intangible assets.

From legal counsel (plaintiff’s) perspective, the most important outcomes of a (preliminary) injunction hearing are that…

• the court recognizes the cause is just, i.e., the allegations counsel make are well founded and convincing, and,
• there is clear evidence that intangible assets developed, possessed, and used by plaintiff have been compromised, stolen, misappropriated, and,
• those assets have specific and contributory value to plaintiff’s company, i.e., in the form of competitive advantages, brand, reputation, sources of revenue, etc.

For the plaintiff (victim company) a grant of injunctive relief can impede, stop, or at least minimize additional (asset) value and competitive advantage hemorrhaging and market space erosion relative to the stolen and/or compromised (intangible) assets.  A favorable injunction ruling is important to the plaintiff company because experience clearly suggests that asset hemorrhaging in all its forms has already commenced, in most instances, immediately following the perpetration of the adverse act itself.

This means that quantifying asset value losses, competitive advantage hemorrhaging, and market space erosion that have occurred as a result of the alleged illegal act can be very useful evidence presented in preliminary injunction hearings.  That is, providing of course, the assessments are readily distinguished as being linked to the (specific) alleged adverse act and not to other coincidental or irrelevant market forces or events or operationally poor or non-existent safeguards, both of which defendant’s counsel will surely seek to draw attention.

Plaintiffs of course, seek expedited preliminary injunction hearings, due largely to…

• its implication that plaintiff company had asset monitoring practices in place that provided timely notification of circumstances (economically, competitively) adverse to the company’s intangible assets, and
• the high probability, as already conveyed, that asset value hemorrhaging and market space erosion has and will persist, if not surge up and to the time a favorable injunction ruling may be granted.

Make no mistake though, regardless of the preliminary injunction hearing outcome, asset holders should not assume any/all asset hemorrhaging will immediately cease, for we are talking about a truly global business economy comprised of literally thousands of ‘legacy free’ players who not only disrespect but genuinely feel immune to western law.

Restrictive Covenants: Non-Competes, Non-Solicitation, and Confidentiality

Embedded throughout this post is the genuine intent that important foundations are laid that will  encourage senior security executives, management team members, HR, and legal counsel to collaborate in advance to formulate viable, defensible, and transparent restrictive covenants to mitigate, if not prevent ‘insider’ (employee) initiated acts of (intangible) asset theft, misappropriation, or infringement, etc.

Having well-articulated, explained, current, and transparent restrictive covenants in place can increase the probability that a court (in a preliminary injunction hearing) will grant the preferred outcome i.e., injunctive relief against the alleged perpetrator(s).

Restrictive (personnel) covenants essentially constitute strategies for contractually safeguarding a company’s information-based (intangible) assets and generally exist in three forms and are intended to…

• Non-compete – prohibit/restrict current – former employees from re-engaging in employment related to one’s former position (occupation, profession) in a particular geographic area for a specific, but often limited period of time following either their voluntary departure or termination.
• Non-solicitation – deter, but preferably prevent, about-to-be dismissed or voluntarily separated employees from soliciting customers or colleagues from their former employer for a specified period of time.
• Confidentiality – protect an employer’s confidential, proprietary information, operational knowhow, and/or trade secrets from being improperly (or illegally) disclosed or used following an employee’s voluntary departure and/or dismissal.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to the circumstance.  And, I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Please watch for Mike’s book ‘Intangible Assets: Security Managers Roadmap’ to be published soon!

Intangible Asset Business Valuations…

October 23rd, 2012. Published under Intangible Asset Value. No Comments.

 Michael D. Moberly    October 23, 2012

In the coming week, I will engage in business travel to a major city with an SMSA population well north of 4 million.  Even though my business meeting card is already full, as usual I will make a concerted effort to identify firms and strategists in the area who, based on language I find in their website, convey a shared interest in safeguarding and monitoring the stability, sustainability, and value of their clients’ intangible assets vs. merely conducting, what I frustratingly describe as subjective glimpses and/or ‘snap-shots-in-time’ (business) valuations.

My rationale is, unless and until the legitimate originators and/or holders of intangible assets recognize the importance of, and possess the interest and where-with-all to, sustain control, use, ownership, and monitor the value and materiality of their (key) intangible assets, all else may be for naught, because asset value can ‘quickly go to zero’!

In this context, I am often amazed with individuals and/or companies that seek business – intangible asset valuation services, that exhibit – express little or no appreciation for the business reality that most intangibles are routinely and persistently vulnerable to – targets of an array of asymmetric global threats and risks, not the least of which are misappropriation and infringement.  When such risks-threats materialize, they can produce almost instantaneous (value, competitive advantage) loss, erosion, dilution, and undermining, etc.  In other words, if one can’t consistently practice effective (intangible) asset oversight, it’s no longer proper to characterize asset risks – threats as probabilities, rather inevitabilities!

Of course, an unknown percentage of these risks – threats are attributed to accidental or inadvertent acts or behaviors, largely by employees or contractors, while others, most in my view, are products of specific acts/events emanating from a growing global cadre of ultra-sophisticated and predatorial ‘legacy free’ players who consistently and effectively target, not necessarily a company’s intellectual properties, rather its knowhow, i.e., intellectual, relationship, and structural capital, which are, in my judgment, are the most consistent and substantive contributors to a company’s value, its sources of revenue, and ‘building blocks’ for (future) growth, sustainability, and profitability!

Again, most business (intangible asset) valuations are subjective glimpses and/or snap-shots-in-time.  Unless and until the holders of intangibles can demonstrate they have effective practices, procedures, and culture in place to sustain control, use, ownership, and monitor their assets’ value and materiality, little else matters in my view.  Arguably then, business valuations will remain mere ‘snap shots’ that prospective buyers should give less credence unless, that is, they are satisfied asset stability, durability, sustainability, resilience, and longevity have been properly factored.

Should this level of awareness and understanding rise to being periodic, if not consistent agenda items in management team  - c-suite (board room) meetings, we’ll know something good and right has occurred!

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance. And, I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Understanding Intangible Asset Value: Key To Mitigating Risks and Threats…

October 10th, 2012. Published under Enterprise risk management., Intangible Asset Value. No Comments.

Michael D. Moberly     October 10, 2012

Information asset protection programs (for companies) should be constructed to withstand the inevitable consequences of ‘category five hurricanes or Richter scale 5+ earthquakes’!

The proper starting point for achieving this level of sustainable protection is to be alert to anecdotal accountings that provide important glimpses into new techniques, methodologies, and perhaps most important of all, the players.  However, to ensure that the asset protection policies and practices address and mitigate specific and growing number of challenges, risks, and threats,  I strongly urge practitioners to take the time to become well versed in the most current and objective findings of social science research.  Too me, anything less is reckless.

But, perhaps worse, being unreceptive or unwilling to integrate relevant research( findings) in an enterprise-wide information asset protection program can be  uncannily apparent to both insiders and outsiders, serving as a global beacon, of sorts, to economic – competitive advantage adversaries that vulnerabilities exist,  they can be targeted, they can breached, and assets compromised with a high probability of success.

That readers, conveys the level of sophistication which many adversaries have already achieved and regularly hone to stay well ahead of their respective, all be it, illegal curve!

Readers’ who elect to construe these characterizations as over dramatizations, would not only be mistaken, but it likely suggests they’re simply not current about the risks/threats posed by increasingly (ultra) sophisticated and organized groups of state sponsored, independent actors, and a host of legacy free global (economic – competitive advantage) adversaries, each functioning quite effectively, efficiently, and profitably in the increasingly predatorial and winner–take-all global business transaction environment.

Integral to achieving this defensible level of information asset protection is understanding that today, 65+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, future wealth creation, and overall sustainability lie in – evolve directly from an array of intangible assets, most of which are outgrowths of internally developed intellectual, structural, and relationship capital and intellectual properties.

In far too many instances, however, I observe information asset protection practitioners and programs that appear to have been constructed using quite conventional  ‘infosec’  frameworks…

• designed to address subjective, anecdotal, or one-off types of (information asset) threats, risks, or events, or
• based on pre-conceived and outmoded notions of who the adversaries’ are, their origins, motives, MO’s, and beneficiaries (recipients) of any misappropriated (information, intangible) assets, or
• that are country (adversary) specific.

So, in many instances, what such initiatives don’t do, or, do poorly, is to distinguish – focus information (intangible) asset protection resources on specific and/or bundles of intangible assets which…

• elevate company or project value by delivering sources of revenue, competitive advantage, market position, reputation, and
• serve as ‘building blocks’ for (company) growth, future wealth creation, and sustainability.

For the remainder of 2012, and for the foreseeable future, intangible assets are, I am confident, the focal points (targets) of global economic – competitive advantage adversaries and economic espionage.  Why?, because it’s the intellectual, relationship, and structural capital (know how) they’re after!

C-suites, including CSO’s, CIPO’s, CTO’s, CRO’s, and CFO’s would be well served to acknowledge the above by distinguishing their company’s intangible assets on the basis of where their company’s value, sources of revenue, competitive advantages, and ‘building blocks’ for growth and sustainability lie, i.e.,  the…

1. Objective value the assets deliver relative to being directly linked to business operations and continuity, i.e., legal, financial, etc.
2. Subjective value the assets deliver, i.e., that which flows from the nature and/or context of the assets, i.e., customer lists, pricing lists, relationship capital, strategic planning, new product launches, etc.

Equally essential to constructing effective information (intangible) asset safeguards is recognizing that intangibles are now, more than anytime previous time in business governance history, routine components to any/all business transactions.

Business realities dictate then, knowing precisely which intangible-information/knowledge-based assets carry the greatest value and competitive advantage, will be on most every adversary’s ‘shopping list’.

For these reasons, I recommend information (intangible) asset protection measures be framed around this key principle…the immediacy and criticality of adverse (economic, market, competitive advantage) impacts should specific risks-threats materialize.

Integral to this principle, is understanding key methodologies for valuing information-based (intangible) assets, i.e., based on their…

Fair Market Value – the price which property (ala intangible-information assets) would exchange hands between a willing buyer and a willing seller with neither being under any compulsion to buy or sell and with both having reasonable knowledge of the relevant facts regarding the assets.

• However – in instances in which an insider acquires and sells information assets to an information broker, business intelligence operative, competitor, or foreign agent without knowing the ultimate end user, ‘fair market value’ is merely a euphemism for the highest price.

Value-in-Exchange – Considers the actions of buyers, sellers, and/or investors. It implies the value at which, in this instance, intangible (information-based) assets would sell (legitimately) if offered – became available on a piecemeal or compartmentalized basis.

• However – proprietary information, trade secrets, or other forms of intellectual property sought and illegally acquired by an insider are likely to have multiple and/or standalone elements of value, i.e., a formula, plus the process to operationalize that formula.

Value-in-Use – The value of a unit of proprietary information and/or trade secret that produces on-going contributory value to an enterprise.

• However – the information asset that is sought and acquired is integral to a company’s business operations and is necessary to sustain company value, sources of revenue, market share, competitive advantages, reputation, etc., i.e., Coca-Cola syrup recipe.

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance. And, I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Rent-To-Own Reputation Risk…A New, But Obvious Twist!

September 27th, 2012. Published under Intangible Asset Value, Reputation risk.. No Comments.

Michael D. Moberly    September 27, 2012

Actually, I would be hard pressed to characterize the following complaint brought by the Federal Trade Commission (FTC) against seven rent-to-own (RTO) operators and a software company as representing a ‘pure’ example of materialized reputation risk.  That’s because, at least in my view, there are quite compelling indicators of intent, collusion, and premeditation. Incidentally, both defendants opted (agreed) to settle the case out of court earlier this week.

The complaint stated that the RTO’s had software secretly installed on (their) rented computers to collect particular data that enabled RTO stores to track the (physical) location, among other things, of rented computers without consumers’ knowledge.

More specifically, the complaint stated that by installing the specifically designed software in its rented computers, allowed the RTO’s to (a.) capture screenshots of confidential and personal information, (b.) log consumers’ computer keystrokes, (c.) track consumer’s location, and (d.) in some instances, take webcam pictures of people (consumers) in their home, again, without notice or consent from the consumers.

The software embedded in the (rented) computers contained a “kill switch” which RTO stores could use to disable a computer if it was (reported) stolen, or if a renter failed to make timely (rental) payments.  The software also had an add-on program known as “detective mode” that…

• revealed private and confidential details about computer users, such as user names and passwords for email accounts, social media websites, financial institution data, Social Security numbers; medical records; private emails to doctors, bank and credit card statements, and webcam pictures of individuals in their home.
• could collect data that allowed RTO operators to covertly track the location of rented computers and the computers’ users.
• presented a fake software program registration screen that tricked consumers to provide personal contact information.

I, and I suspect readers of this blog won’t find the elements in this complaint rising to the level of ‘rocket science’ in as much as this software was designed to facilitate recovery of stolen and/or late rental payment merchandise by the RTO industry.

The settlement that was agreed to prohibits RTO’s from engaging in any further (consumer) spying of this nature, e.g., location tracking without notice and consent of consumers and/or deceptively collecting and disclosing consumer information, etc.

An interesting element of the FTC’s response was directed specifically to the software firm by stating quite succinctly, that providing RTO operators the means, i.e., software, to break the law was deceptive and unfair.

I certainly don’t believe readers should assume incidents such as this represent the proverbial one-off.  Instead, there’s no doubt, at least in my view, that technologies will continue to be developed and applied to achieve whatever a user wishes and wherever it’s functionality may lie on a legal – illegal continuum.  But, one thing is crystal clear, that is, consumer perceptions and expectations (reputation) are powerful and valuable intangible assets, which in most instances, once compromised or lost, are quite expensive and time consuming to recover, if, that is, recovery is even an option?

Comments regarding my blog posts are encouraged and respected. Should any reader elect to utilize all or a portion of this post, attribution is expected and always appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance.  And, I always welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com

Safeguarding Intangible Assets….But, Only For Their Life, Value, and Functionality Cycles!

September 14th, 2012. Published under Intangible asset protection, Intangible asset strategy, Intangible Asset Value. No Comments.

Michael D. Moberly    September 14, 2012

As noted in numerous posts here, it is an irreversible economic fact (business reality) that steadily rising percentages (65+%) of most company’s value, sources of revenue, and ‘building blocks’ for growth and sustainability globally evolve directly from intangible assets!

Ensuring (monitoring) control, use, ownership and value of those assets throughout their respective life, value, and functionality cycle versus for the lifetime of the company and/or holder is, in my judgment, a more practical, efficient, and probably a more advantageous strategy. 

The rationale is, in large part due to the assets’ increasingly integral role and relevance to the growing variants of business transactions constrained only by participant’s collective imaginations how to formulate relationships to achieve lucrative outcomes, be they joint ventures, collaborations, strategic alliances, etc.

But, companies are essentially on their own, to find the requisite expertise to not just understand intangible assets and their respective contributory value, but identify, safeguard, and preserve-monitor their stability, fragility, sustainability, and defensibility.  Importantly, these responsibilities are rapidly becoming fiduciary in nature and fall exclusively to management teams and c-suites to delegate.

Practically, intangible assets actual and contributory value seldom remains static.  In other words, intangible assets’ contributive elements – value may rise, fall, and otherwise fluctuate in cyclic fashion, i.e., in accordance with an assets’ contribution and/or functionality, again to a particular project, initiative, or a company as a whole.

A perhaps crude, but relevant characterization of an assets life, value, and/or functionality cycle is akin to what a doctor once told me about the need for a particular prescription medicine, i.e., ‘you will know when you don’t need it anymore when you start forgetting to take it and realize you are fine without it’.

This cyclic aspect to intangible assets’ (contributory) value, renders most conventional, snap-shots-in-time or one-size-fits-all valuation techniques less relevant or useful because among other things, they

• do not factor materialized intangible asset risks – threats that can take asset value to zero almost instantaneously, and
• provide little, if any, strategic (post transaction) context to asset value, in light of consistent presence of asset risks and threats.

We do know, once an (intangible) asset is compromised, infringed, or misappropriated, etc., their contributory value to a company’s competitive advantages, relationship and/or structural capital, or to a company specific initiative can begin to unravel and hemorrhage value and competitive advantages rapidly, globally, and in many instances, irrevocably.

For me, this makes it all-the-more-important to monitor intangible assets life, functionality, and contributory value cycles.  The point in time which assets’ contributive features no longer carry the value they once did or are necessary to deliver competitive advantages, it’s quite logical to assume there is no longer a need to devote resources to preserving their proprietary status. This suggests those resources and that time should be devoted elsewhere, perhaps to newly developed and valuable intangible assets.