Law Firm Marketing That Includes Intangible Assets Produces Results…

June 17th, 2014. Published under Intangibles as strategic assets, Strategic Planning. 1 Comment.

Michael D. Moberly     June 17, 2014    ‘A long form blog where attention span really matters’.

Conventional strategic planning irrelevant if intangible assets are not at the center…

The increasingly competitive  business terrain in which know how and other intangible assets have become the overwhelmingly dominant drivers and producers of value and revenue is clearly prompting many companies to re-examine the relevance of their often times, conventional and even static business plans and mission statements.

I am not suggesting there is anything inherently wrong with continuing to write business plans and mission statements, because they frequently do serve as a descriptive (Gannt Chart type) of roadmap of what leaders want their business to eventually look like and how to get there!

But, for analogous purposes, some (management teams, boards) are inclined to view business plans and mission statements in a ’constitutional’ like fashion, i.e., either as a ’living’ document that’s malleable and subject to flexible interpretations to reflect an evolving global business environment, or a more static document that can only be interpreted on the basis of its ’original intent’.

A law firms’ strategic plan, particularly one that incorporates client’s intangible assets, is a dynamic and on-going exercise. The reasons are that client’s intangible assets are often nuanced, business/company centric, seldom remain static, and frequently fluctuate relative to the materialization of risks, threats, and the nature and type of transactions engaged in which clients’ intangible assets will inevitably be in play.

Leaders, late adopters, or followers…

Law firms can choose to be leaders, late adopters, or followers. Today however, in an increasingly intangible asset intensive and global business – economic – transaction environments, a law firms’ initiative to devote attention and practice area resources to clients’ intangibles will reap benefits in terms of being more reflective and accommodating to client needs by, among other things, respectfully bringing clarity to the necessity for tactical and strategic stewardship, oversight, management, and assessment if intangibles other than IP, sometimes even before business clients become fully aware of their (the assets’) potentially favorable advantages.

Intangible asset relevancy to each practice area within full service firms is one in which each practice area can contribute through their respective and specialized lens.

Unfortunately, the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets, has yet to become so self-intuitive to management teams, c-suites, and boards that they instinctively recognize the necessity to identify, develop, safeguard, and exploit the intangibles their company produces internally and/or acquires externally.

Effective strategic planning produces client benefits…

Law firms have varying levels of experience and depth in IP matters. This makes it, in my view, all the more legitimate and necessary for firms to include, as part of their strategic planning, the acquisition of the necessary expertise to aid clients to recognize the various ways their company can elevate its value, add sources of revenue, and solidify its sustainability through better utilization, governance, and exploitation of its intangible assets.

Benefits to firm clients can occur not just by recognizing intangibles assets and their relevance to business profitability and market space, but also by taking affirmative steps to guide clients in identifying, unraveling, assessing, auditing, positioning, bundling, and exploiting intangibles and defending intangible asset intensive client companies in the intricacies intangible asset rooted disputes and challenges..

Thus, the more clarity a firm’s client decision makers achieve regarding the intangible assets their company produces or has acquired and the inevitably which they become embedded in the products and/or services a business client produces will lead to better – more informed decisions about the necessity to engage leading edge law firms that provide such services, as competitive leaders, not followers or late adopters.

When prospective clients – buyers of legal (IP) services, or merely consumer products for that matter, initially approach a law firm, if they find it challenging to distinguish/assess a firm’s comparative quality, particularly when such information is neither readily available or distinguishable, a percentage of those prospective clients will be inclined to promptly ask about pricing and fees.

More specifically, such circumstances often translate as an inability to quantify the value of what may appear, to prospective clients, as competing services and/or offerings because, unfortunately, pricing (fees) tends to be the primary form of measurement business decision makers understand insofar as distinguishing competing offerings – services. That’s because pricing (fees) tend to be a more readily recognized and presumably understood form of measurement..

So, a law firms’ ability to attract and secure new as well as retain existing clients, IP, or otherwise, particularly among increasingly frugal, discriminating, and cautious prospective buyers of legal services, can be rotted in a firms’ ability to articulate greater value in understandable and actionable contexts to benefit the client and exceed their respective needs and expectations. (Adapted by Michael D. Moberly from the work of Dale Furtwengler)


My primary rationale for advocating the inclusion of client company’s intangible assets in a law firms strategic planning is that by doing so, it will legitimately produce broader opportunities to re-engage existing clients as well as engage new – prospective clients on yes, a broader range of business legal issues, i.e., their intangible assets.

Too, by virtue of the connections between intangible assets and IP, law firms, particularly those with an IP practice, are pre-positioned and branded, so to speak, for guiding client businesses and companies to legitimately inquire and explore ways to more profitably utilize their intangibles.

Also, law firms, whether they recognize it or not, routinely become a repository of familiarity about ‘all things intangible’ regarding their business clients. It would seem prudent then for firms to develop strategic plans that call for a collaborative convergence, i.e., draw upon their existing practice area expertise, and various other complimentary domains to exploit that expertise and redirect a portion to business clients intangible assets.

However, the speed which intangible assets are coming to the forefront of business profitability and sustainability has produced some challenges for law firm business client services management that lead to maximizing intangibles value and creating opportunities for asset monetization and/or commercialization.

  • One challenge is meeting the rising fiduciary responsibilities associated with the overall management of intangibles and the ability/competencies to simultaneously sustain control, use, and monitor asset contributory value and materiality, and risk to ensure that value, revenue producing and competitive advantage potential is neither undermined or lost.
  • A second challenge, for law firm business clients and their management teams is recognizing that intangible assets are literally embedded in most every company’s processes, procedures, and practices (as intellectual, structural, and relationship capital) regardless of (company/client) size, maturation, or industry sector. The fact that most intangibles are embedded as noted above, can manifest as competitive advantages, brand, and reputation.  What would matter most to clients is engaging a law firm that has already acquired the skill sets and experience to guide clients to identify – differentiate those assets and exploit their contributive – collaborative value as effectively and efficiently as possible.
  • A third challenge is ensuring the necessary competencies are in place within a law firm to identify, unravel, assess, position, and bundle, if necessary, the assets and profitably apply-utilize (leverage) them in a broad range of business circumstances and transactions in which intangibles are routinely in play and/or part of a deal.
  • A fourth challenge many, if not most client management teams experience is surviving, that is, remaining competitive, profitable, and sustainable while engaged in a global business (transaction) environment that is not just increasingly competitive, but aggressively predatorial, and often functions in winner-take-all business contexts.

These challenges of course, lead us to an even more compelling rationale for law firms to develop a strategic plan, of which one component, includes a viable path for converging a firms collective expertise to effectively address each of the following phenomena on behalf of clients because…

  1. There is no other time in business governance – management history when steadily rising percentages of company value, sources of revenue, and growth potential are so deeply rooted in intangibles.
  2. There is a necessity to re-frame the management, stewardship, and oversight of a company’s intangibles as fiduciary responsibilities that warrant enterprise wide collaboration and consensus.
  3. All too frequently, the contributions intangible assets make to company revenue, value, competitiveness, and market position are overlooked, dismissed, neglected, undervalued, left un-safeguarded, and ultimately lost, diluted, or leach out to competitors and the public domain.
  4. Intangible assets have become much more than mere tools to manage and/or enhance other (tangible, physical) assets.  Instead, intangibles are now valuable and often times stand alone commodities that can be developed, positioned, integrated, and utilized to produce revenue, enhance competitive advantages, and otherwise add real value to a company.
  5. The financial reality that intangibles and intellectual property can advance a company (economically, competitively, etc.) only so long as control, use, ownership, value and materialty can be sustained.
  6. The time frame when company’s can realize the most value from their intangible assets generally remains variously compressed relative to an assets respective life, contributory value, and functionality cycles.  In part, this compressed state is due to (a.) lower barriers to market entry by competitors, and (b.) rapid profits being achieved from, what I call, predatorially sophisticated and global product/service piracy and counterfeiting operations that consistently pollute and de-value legitimate supply chains.

Law Firm Marketing Plan Must Include Intangible Assets

June 16th, 2014. Published under Law Firms, Strategic Planning. No Comments.

Michael D. Moberly    June 16, 2014    ‘A long form blog where attention span really matters’.

So why shouldn’t every law firm’s strategic plan encourage achieving operational familiarity with business clients’ intangible assets…?

Frankly, in 2014, and for the foreseeable future, I would be very hard pressed to devise a rationale why every law firm should not achieve a fully operational familiarity with their business clients’ intangible assets, and incorporate same in their strategic planning as tools to…

  • expand and enhance firm brand and become a leader in intangible asset stewardship, oversight, and management, which in turn will produce more engagements, and
  • enhance firm competitiveness by providing legitimate grounds to re-engage existing clients, and engage new/prospective clients.

Law firm’s that continue to be dismissive of strategic planning that includes a full array of intangible assets but do not adjust their client services accordingly should expect to experience stagnation on various levels internally and externally, e.g., sustainability of client relationships, client satisfaction, and service deliverables. So, it’s not a case of when, rather how law firms can build the necessary receptivity and ultimately consensus, initiated by managing partners, to actually achieve a level of profession expertise to comfortably and professionally engage clients’ about their intangible assets.

More specifically, while most firms’ tactical speed, i.e., the efficiencies of delivering its services, etc., remain important, continuing to be dismissive of strategic speed for developing new and proactively relevant client services that directly reflect globally universal changes in economics and competitive advantage drivers. So, law firm strategic planning should be designed and executed, as the adage goes, to ‘avoid continuing to skate where the puck is now, rather skate to where the puck will be’. Law firms strategically guided by assuring their practice areas are effectively aligned to address clients’ intangible assets are far better positioned to elevate their long term sustainability and bring greater consistency in revenue.

Too, a firms’ strategic plan can be further developed to incorporate internal and external client sensors which then can unambiguously constitute a ‘heads up’ to the normative. Of course, strategic planning initiatives must not be shy about challenging convention. One way is for the plan to be sufficiently malleable to absorb and effectively act on the full array of clients’ intangible assets and the various and nuanced forms they take.

Intangible assets are characterized in two primary forms…

  1. Legal intangibles, i.e., those which once issued by a government agency confer certain legal property rights which provide standing to defend in a court of law, e.g., issued patents, copyrights, and trademarks, etc., and
  2. Competitive(advantage) intangibles which are often characterized as being non-ownable, but they directly impact – contribute to a company’s financial well being, create efficiencies, increase productivity, and market value, etc. Often competitive advantage intangibles evolve collectively from various combinations of intellectual, structural, and relationship capital. (Adapted by Michael D. Moberly the work of Mary Adams_

A perspective on whether intangible assets are non-ownable…

Intangible assets are assumed to be non-ownable, but for the creator – developer of intangibles particularly those which measurably produce contributory value and competitive advantages, it is certainly in their interest to sustain control and use of the intellectual, structural, and relationship capital embedded in – underlie those assets and consistently monitor their value, materiality, and risk. If not, risks are all but sure to materialized, the effects of which rapidly erode, diminish asset value, sources of revenue, and competitive advantages. So, in companies and/or circumstances where such actions are taken to safeguard and preserve the content and value of intangibles would wisely convey a sense of ownership, as well it should!

Examples of intangible assets…

The following are examples of intangible assets. They have been adapted by Mr. Moberly from two respected comprehensive and current sources, i.e., (a.) ‘The Intangible Asset Handbook: Maximizing Value From Intangible Assets’. Weston Anson. 2007. American Bar Association, and (b.) ‘Untangling Intangibles’ Tamara Plakalo   February, 2006. Managing Information Strategies. Australia.

  • Technology – software: Internally developed (proprietary) software and software copyrights, automated databases, source code, enterprise solutions and custom applications…
  • Marketing: Lyrics, jingles (music), promotional characters and devices, photographs andvideo, newsletters, advertising/marketing concepts, results of focus groups…
  • Engineering: Industrial (new plant, equipment) designs, engineering drawings (blueprints) and technical knowhow
  • Customers – clients: Communication-mailing lists, relationships, customer data bases and retrievalsystems, special distribution channels, 1-800 numbers, relationships
  • Competitor research:  Actionable business intelligence, i.e., plans, intentions, capabilities…
  • Real estate:  Zoning – construction permits, air, water, and mineral drilling-exploitation rights, right-of-way, easements, and building (expansion) plans/rights, location visual scenery – proximity to
  • Personnel training:  Proprietary manuals, operations processes and/or procedure
  • Domain names, website design, B2B and e-commerce capabilities, web links, customer/client accessibility and use
  • Corporate identity:  Names, trademarks, logos
  • Products and services:Warranties, trade dress, i.e., product shapes, color schemes, and packaging design/graphics, open purchase orders, order and/or product back log,
  • Contracts – agreements:  Any contract that has a definable life and some form of exclusivity, e.g., supply, media, performance and pricing agreements, license and/or royalty agreements, advertising, construction, management, and/or service contracts, leases, operating and broadcast rights and licenses, route utilization, franchise agreements, subscription rights, futures contracts, co-branding agreements, endorsements, spokesperson contracts, venue naming rights…
  • Intellectual property: Patents, copyrights, trademarks, trade secrets, trade dress, trade name, service marks, mastheads, application, logo design, prior art search, flanker patents; patent applications, foreign patents, reprints, use/performance rights
  •  R&D: Product research studies, formulas, process and assembly data, regulatory agency approval process-status
  •  Communication:  Cable rights and/or transmission rights, FCC licenses and/or certification, bandwidth
  • HR:  Wage rates, union contracts, non-compete and non-disclosure agreements (if transferable)…
  • Structural capital:  The structures and processes employees develop and deploy to increase productivity and performance (business process/method patents)
  • Human capital:  Sum total of employees’ specialties, skills, attitudes, abilities, competencies, and technical ‘know how’ documentation, i.e., lab notebooks, manuals, formulas, processes, and recipes (food, chemical formulas)

Incorporating client intangibles assets in law firms’ strategic planning…

It’s fair to suggest that many law firm managing partners have various, but seldom specified responsibilities, aside from sustaining or expand the firms’ profile and brand, extinguishing the inevitable fires and ‘mending fences’. For some firms, managing partners’ responsibilities can also include garnering and fostering firm wide consensus to develop and execute a strategic plan, as advocated here, inclusive of intangible assets which is best commenced by advocating attorney operational familiarity with intangible assets, i.e., their stewardship, oversight, and management and the assets’ relevance to a firm’s specific practice areas. A law firms’ strategic plan, particularly one that incorporates client’s intangible assets, is a dynamic and on-going exercise. The reasons are that client’s intangible assets are often nuanced, business/company centric, seldom remain static, and frequently fluctuate relative to the materialization of risks, threats, and the nature and type of transactions engaged in which clients’ intangible assets will inevitably be in play.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Int

Law Firm Strategic Marketing With Intangible Assets

June 12th, 2014. Published under Law Firms, Value Propositions. No Comments.

Michael D. Moberly     June 12, 2014     ‘A long form blog where attention span really matters’.

Thinking strategically leads to transformational changes in law firm planning… Frequently I hear thinking and planning strategically characterized as managerial luxuries which can only occur in isolation when law firm managing partners are not consumed with a daily barrage and demands of putting out fires and mending various fences. Further complicating a law firm’s best efforts to engage in genuine strategic thinking and planning is a reality that a significant percentage of firms manage – operate their practice through   quite conventional, hierarchical, and vertically siloed rule sets with substantial, if not total practice area autonomy. . Should the above be a reasonably accurate reflection of law firm management, which I’m quite comfortable in saying it is, it’s understandable why most law firms remain removed from, or worse, oblivious to the irreversibly intertwined and intangible asset dominated (global) business transaction environments in which clients’ intangible assets are routinely in play, at risk, and absent effective management. I do not believe it is a tremendous leap from the key implications found in the Stone v Ritter (911 A.2d 362 (Del. 2006), that law firm managing partners would have an obligation if not a fiduciary responsibility, not unlike their business clients, to ensure their firm achieves operational familiarity with intangible assets and incorporates same as a collaborative practice area geared toward the assets’ management, stewardship, and oversight on behalf of clients’.

Irreversible and global economic facts and business realities… So, what’s being advocated here is quite straight forward, that is, law firms that want to remain profitable and sustainable are obliged to engage in strategic planning that will pave the way for offering and delivering relevant services related to the management, stewardship, and oversight of clients’ intangible asset related services. This commences by firms’ managing partners and practice area attorneys recognizing…

  1. it is a global economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in – evolve directly from intangible assets which includes variations of intellectual, structural, and relationship capital, reputation, brand, and competitive advantages, etc.
  2. a company’s intangible assets are almost always in play and at risk in new initiatives, product/service launches, and other types of business transactions, etc.
  3. business client’s intangible assets are not a lesser or subordinate form of intellectual property, instead, IP is actually a subset or one category of intangible assets.

New strategic thinking and planning for law firms… Collectively, these irreversible global economic business realities warrant immediate strategic thinking and planning that allow law firms to reflect on and accommodate the range of expanded range of legal services that emanate from the permanency and dominance which intangible assets have become in today’s increasingly complex, yet intertwined business (transaction) environment. Importantly, intangible asset relevance is not limited to the legal profession, but also to the professional disciplines of accounting, valuation, security, risk management, and financial services, among others.

Misreading the global economic tea leaves… An unfortunate misreading of these economic and business tea leaves would be for any entity, law firm, or other, to assume this paradigm shift (from tangible – physical asset dominance to intangible – non-physical asset dominance) has yet to arrive. The fact is, it’s already here and for those who care to look, there has been an abundance of advance notice. For example, The Brookings Institution and Dr. Baruch Lev’s work on intangibles commencing in the mid to late 1980’s, along with comparable initiatives by the Athena Alliance headed by Dr. Kenan Jarboe, the Intangible Asset Finance Society headed by Dr. Nir Kossovsky and a host of other thought leaders like Jonathan Low and Mary Adams recognized early on the impact of intangible assets on businesses and global economies in general.   Importantly, intangibles have come to be the ‘building blocks’ for most all companies’ value, sources of revenue, growth, profitability, and sustainability! For me, it is the epitome of misreading the global economic, business transaction, and competitive advantage tea leaves for any multi-service (practice area) law firm to argue that intangible assets should not play an integral role in their strategic thinking and planning!. Respectfully, I recognize that many law firms remain steeped in generations of convention and past practice that inhibits an organization on many levels, from genuinely considering such an initiative because, among other reasons, at first blush, it may appear so operationally disruptive that it could be characterized as being akin to blasphemy to conventional and time honored practices of client service offerings, delivery, and management. . One thing is assured however, emanating from these economic facts is the reality that business clients, regardless of sector, will, with increasing frequency, seek legal services variously related to the stewardship, oversight, management, and commercialization and/or monetization of the array of nuanced intangible assets they produce internally or acquire externally. But, let there be no ambiguity, law firms’ whose strategic thinking and planning do not fully explore and preferably incorporate a new array of intangible asset related services to accommodate client needs and expectations, will likely experience falling revenues and client pushback. Admittedly, not all business clients have achieved sufficient operational familiarity regarding their management, stewardship, and monitoring of their intangible assets to articulate with clarity and specificity what legal services they need today and in the future. Thus, prudent law firms will endeavor to get our front of their go fast, go hard, go global clients and prepare relevant services so the firm can create its own competitive advantages by being ‘first on the block’ to have intangible asset services readily available to accommodate the inevitable client need.

A good first start is for law firms to assess some conventions… A good first start for firms to achieve the level of (intangible asset) understanding, strategic thinking, and planning advocated here, is by dismissing any notion that intangible assets are either singularly synonymous, interchangeable with, or short term subsidiaries to intellectual property (IP) or business goodwill. Law firms that elect not to strategically delve into the obvious relevance of intangible assets to each practice area can expect to experience not only revenue stagnation, but may likely, in a growing number of instances, find themselves having to significantly downsize or possibly face firm dissolution. True, firm dissolution may not occur today or tomorrow, but as additional global universality of intangible asset regulation and oversight comes to fruition, those law firms that continue to be dismissive of intangibles will be essentially conducting business strictly in the confines of convention, and not in the context of externalities. So my counsel to law firms and their managing partners is to engage in strategic planning that includes a strong and collaborative vision that encompasses a firms’ (a.) organizational structure in terms of how its various practice areas and expertise can be aligned to better address clients’ intangible asset (service) needs, and (b.) become more accommodating to the inevitable global universalities related to intangibles. In other words, attorney’s and their respective practice areas must be fully integrated to a lucrative solution by (a.) helping structure the firms’ future to meet its future, and (b.) start annunciating and exploiting a firm’s new competitive advantages created by offering intangible asset legal services.

Paths to elevating client relationships, satisfaction, and service delivery favorables… Frankly, in 2014, and for the foreseeable future, I would be hard pressed to devise a rationale why every law firm should not achieve an intimate operational familiarity with each of their clients’ intangible assets, and incorporate same in their strategic plan as tools to…

  • brand a law firm as being a leader in intangible asset stewardship, oversight, and management, which in turn will
  • enhance competitiveness by providing legitimate grounds to (a.)  re-engage existing clients, and (b.) engage new/prospective clients

Again, law firms that choose to be dismissive of strategic planning and do not adjust and create intangible asset relevant services should expect to experience stagnation in client relationship satisfaction and service favorables. So, it’s not a matter of when, rather it’s a matter of where and how law firms respectfully intervene on behalf of clients’ intangible assets. More specifically, while a firms’ tactical speed, i.e., the efficiencies of it service delivery, etc., remain important, being dismissive of strategic speed for developing services specific to intangibles, can confound a firms attorney’s, its practice areas, and certainly its clients. So, a law firms’ strategic plan should be designed and executed, as the adage goes, to ‘avoid continuing to skate where the puck is now, rather skate to where the puck will be’. Law firms strategically guided by aligning each service – practice area to clients’ intangible assets will most assuredly elevate their long term sustainability and revenue streams. So, it is prudent to recognize how we think, and what we think!

Intangible Assets Not Renewable Resources

June 2nd, 2014. Published under Fiduciary Responsibility, Intangible asset protection, Intellectual Property Rights, Organizational resilience and business continuity/conti. No Comments.

Michael D. Moberly   June 2, 2014   ‘A long form blog where attention span really matters’.

Pat Choate, in his 2005 book titled ‘Hot Property: The Stealing of Ideas in an Age of Globalization’ (p. 218)points out that an ‘idea, by definition, exists solely in one’s mind, where it remains happily and comfortably secure, but not terribly useful’. So, in order for an idea to potentially produce commercial and/or contributory value to its holder at some point, it must be expressed. Even though Choate (2005) says ‘protecting one’s ideas represents a basic social contract between society, its government, and the individual(s) who created the idea’, the act of openly expressing ideas, with increasing frequency, serves as a starting point for asset vulnerabilities and potential challenges and disputes to emerge for the originators (holders – owners) of the ideas.

Fundamentally, products of the mind are a type of intangible asset and manifest as intellectual, structural, and relationship capital including intellectual property (IP) and some other forms of proprietary information. Risks, to these intangibles materialize with some regularity and certainty, often in the form of purposeful or inadvertent events, acts, or behaviors that can adversely affect or jeopardize (asset) ownership, control, use, and value. A significant percentage of materialized intangible asset risks are of a nature to adversely affect a company’s reputation and its competitive advantages with equal rapidity, for example…

  • stifle competitive – economic momentum of a company project, new venture, or product launch.
  • undermine a business transaction or strategic business plan.
  • erode an assets’ value as a source of potential value and projected profitability.

Business continuity – contingency planning pre-Internet era…

In the pre-Internet era, when intangible asset were barely a twinkle in economists’ eyes, misappropriation, infringement, and/or counterfeiting was characterized as being relevant almost exclusively to IP, i.e., patents, trademarks, copyrights, and trade secrets. Too, at the time, a relatively common risk mitigation strategy (to a company’s assets) was business continuity – contingency planning, not organizational resilience, and was generally designed – intended to be a mechanism to contain the risk(s) and mitigate their impact, i.e., the damages or extent of the losses as well as additional adverse impacts to company reputation, image, and goodwill, etc.

Today however, in the current knowledge based (intangible asset) era of going fast, going hard, and going global, even the most well-intentioned and wishful thinking efforts to contain the multitude of risks that can materialize is more fitting, in my view, to tangible (physical) assets than intangible (non-physical) assets.

For example, in the world of physical (tangible) assets, so-called firewalls erected between apartment buildings are designed – intended to contain or reduce, for a certain period of time, the probability that a fire in one building will spread to adjacent buildings and/or structures.

Such conventional firewalls however are less relevant or practical insofar as safeguarding or mitigating risks to knowledge-based intangible (non-physical) assets which again include intellectual, structural, and relationship capital, IP and proprietary information. In most instances, in today’s increasingly sophisticated risk laden R&D and business transaction environments, anyone of these types of intangible assets, absent effective asset monitoring and safeguards, will be at risk. Unfortunately, the sophisticated methodologies applied by the expanding number of global economic and/or competitive advantage adversaries, allow value laden intangible assets to be quickly discerned and instantaneously disseminated to a growing and often organized and sophisticated labyrinth of information brokers, business intelligence operations.

Don’t Overlook Intangible Asset Safeguards

Significantly, once an intangible asset has been compromised or succumbed to the growing array of sophisticated and asymmetric risks and threats, a company mitigation practice based primarily on the principles of containment, in my view, is neither a realistic or viable (standalone) strategy, certainly not something which a company’s management team, c-suite, board should feel comfortable insofar as their fiduciary responsibilities are concerned, i.e., see Stone v. Ritter.

Thus, while conventional intellectual property enforcement mechanisms (i.e., patents, trademarks, copyrights, trade secrets) remain a global (WTO) requisites for conveying ownership and standing to address the inevitable disputes, challenges, risks, and threats, the deterrence features associated with each have been minimized and are routinely disregarded and circumvented by adversaries. Thus conventional IP enforcements assume a more reactive vs. proactive posture, one that requires formidable and consistent self-policing and monitoring

In today’s increasingly aggressive, predatorial, and ‘winner take all’ global R&D and business transaction environment, this leaves, in my view, conventional forms of intellectual property (enforcement) certainly less relevant, perhaps even approaching some manner of obsolescence insofar as effectively combating the ultra-sophisticated risks and threats which are now routine.

Conventional IP enforcements carry little, if any, deterrent features today…

While I am not suggesting conventional IP enforcements should not be used, the harsh reality is, the once respected rights and protections afforded to innovators and entrepreneurs for their products on the mind, through patents, trademarks, and copyrights, etc., are now being routinely outpaced, circumvented, and utterly disregarded by adversaries globally. Any entrepreneur or company who assumes the mere issuance of a patent, standing alone, will be sufficient to sustain full control, use, and ownership rights for the duration of their patent, for example, is simply no longer credible.

The notion that conventional IP enforcements will ensure indeterminate control, use, and receipt of economic/competitive advantage benefits from an individual’s or company’s hard earned and often very expensive know how, i.e., the intellectual, structural, and relationship capital is unfortunately a business risk that should not be assumed is the exclusive bastion of legal (IP) counsel.

It would not be too challenging to argue conventional intellectual property enforcements carry less benefit to a single holder or a company, aside from providing legal standing in the increasing likelihood of having to engage in litigation over disputes and challenges. It’s most prudent then for business decision makers to ensure best practice intangible asset safeguards are in place from the outset of idea materialization. This includes consistent asset monitoring and defense, not merely directed to the conventional intellectual property rights, but also to sustaining control, use, ownership, and monitoring value and risks to those assets!

Sustaining a successful launch – commercialization of a new idea…

There are many different views about what is actually required to sustain a successful launch – commercialization of a new idea or project.

Obviously, having a very commercializable product and a sufficiently capitalized business plan and marketing strategy represent three time honored ingredients necessary for most successful launches. But, an often overlooked, underestimated, and misunderstood ingredient to a successful business – idea launch is recognizing that…

80+% of the value, sources of revenue, and future wealth creation of the launch will likely evolve from intertwined combinations of (a.) intangible assets and IP,i.e., intellectual capital, and (b.) specialized proprietary know how, i.e., structural capital, and (c.) attractive and distinctive competitive advantages, and brand integrity, i.e., relationship capital. (Moberly, 2011)

So, unlike conventional forms of IP enforcements, i.e., patents, trademarks, and copyrights, no government will issue a comparable certificate that says, these are your contributory value intangible assets, proprietary know how, trade secrets, competitive advantages, and brand integrity which an individual or company should safeguard and monitor their value and risk for the duration of their respective value and functionality cycle.

The responsibility for (a.) recognizing how the intangible assets evolved, (b.) the context which they now exist and are being applied, and (c.) unraveling them (individually – collectively) to assess their contributory value and potential conversion to sources of revenue and competitive advantage lie solely with the launching companies’ decision makers, i.e., originators, holders, and/or owners of those assets.

Admittedly, today’s hyper-competitive global business (transaction) environment, is influencing more companies to recognize the necessity for more than cursory intangible asset identification, assessment, safeguards, and monitoring of value and risk is much more than a time or resource permitting responsibility. These responsibilities are now instrumental in the initial success of product launches. Business decision makers who carelessly or unwittingly hedge their intangible assets’ essential maintenance, e.g., protection and preservation, will with greater frequency, if not certainty, cause risk-threat probabilities to become inevitabilities in which complete or partial (asset) value erosion and/or dilution are likely to occur which can also inadvertently create parameters and/or boundaries to a company’s economic – competitive position capabilities and potential.

What can companies do if – when their intangible asset ‘genies get out of their bottle prematurely…

The genie for profitable and sustainable launches of a new company, product, or idea is embedded in the business decision makers’ recognition that…

Getting out of the bottle is a metaphor of course, for situations in which business decision makers overlook or underestimate the role, contribution, and/or value intangible assets make to the overall sustainability of successful business launches and equally important, the risks-threats to those assets.

The initial requisite to commencing asset recovery action is recognizing delays in (a.) discovering the materialization of asset risk, and (b.) securing experienced guidance about what action to take and when, will most certainly complicate and weaken a company’s (legal) position insofar as the possibility of achieving a favorable (possibly full) economic – competitive advantage outcome.

A responsive and thorough ‘intangible asset – competitive advantage assessment’ is a prudent first step. A specialized (asset) assessment of this nature will aid a company and its decision makers to be better positioned to deliberate on two important points:

  1. prioritize options relative to trying to (re-) establish ownership control and use of the no doubt already hemorrhaging intangibles.
  2. strategies to try to stop and/or mitigate additional economic – competitive advantage hemorrhaging (of the assets), i.e., devaluation, undermining, infringement, misappropriation, reputation risk, etc.

Bottom line; risks-threats to a company’s intangible assets, intellectual property, proprietary know how and competitive advantages and brand integrity should not be dismissed and/or characterized as merely just another risk of doing business!

Unfortunately, far too many companies lose, inadvertently relinquish, and/or become entangled in extraordinarily costly and time consuming legal disputes and challenges over the ownership, control, use, and value of their intangible assets, competitive advantages, proprietary know how, reputation, and brand integrity. One of the most frequent reasons is dismissing the real, persistent and stealthy risks-threats to those assets and their contributory value to strategic sustainability.

Intangible Assets Economic Espionage’ Real Target

May 28th, 2014. Published under Economic Espionage, Intangible asset protection. No Comments.

Michael D. Moberly    May 28, 2014   ‘A long form blog where attention span really matters’.

The experts’ perspective…

I routinely hear presumed experts on various media describe how intellectual property (IP) is being targeted and stolen through economic espionage and/or cyber-attacks at alarming rates.

While these experts often make passionate and intriguing cases by, among other things, either eluding to or outright naming the (nation state) perpetrator and assigning a mind boggling dollar value to such losses that routinely range from $40 billion to $500+ billion annually by U.S. companies, not counting losses experienced by other countries, particularly those who are members of the World Trade Organization and signatories to the 1994 Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) which established minimum standards for many forms of intellectual property regulation

There is no question economic espionage, particularly since the passage of the Economic Espionage Act (EEA) in 1996, that the losses attributed to it have risen considerably. One reason is self-evident, that is, by virtue of the passage of the EEA, there is an abundance of players, i.e., various federal agencies, sectors of the U.S. intelligence community, and a variety of ‘think tanks’ along with researchers and practitioners such as myself who monitor/track economic espionage and endeavor to assess both its magnitude, targets, and economic impact.

There is virtually no question that losses of intellectual, structural, and relationship capital, anyone of which can be (company) proprietary information, a trade secret, or collectively assembled to become a patent, i.e., intellectual property. Many of these experts self identify as current or former employees of agencies within the U.S. intelligence community, federal law enforcement and/or prominent researchers at various ‘think tanks’. To put it plainly, it’s just prudent today for listeners to assess a speakers’ potential motive(s) and the context in which economic espionage is being discussed, and how such calculations (values) were made, before arriving at a conclusion.

How much is actually lost…

But just how much is actually lost, that’s subject to some debate. I am confident it is significant and it’s very likely it continue to escalate for multiple reasons, three of which are…

  1. the overall global trade and business transaction environment have become increasingly aggressive, predatorial, competitive, and ‘winner-take-all’ in nature.
  2. economic espionage and its related acts are relatively easy to accomplish and there are multiple (quite stealthy) ways to be successful at it. And, it can be initiated by individuals or state sponsored entities from anywhere in the world. In other words, economic espionage need not exclusively be cyber-oriented or conducted or subsidized by any one particular nation state.
  3. And, perhaps most importantly is the economic fact/reality that steadily rising percentages of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability reside in intangible assets, i.e., intellectual, structural, and relationship capital, one of which is intellectual property. So the routinely espoused notion that U.S. or other county’s companies are solely being targeted for their intellectual properties, is not only a misnomer, but a misunderstanding of where a company’s value really lies.

How are losses calculated…

In terms of how the calculations are made and/or what factors are taken into consideration to assign a particular dollar value to IP losses figures and the context and/or motives in which these estimates are announced, and which source is used as evidence ultimately are preludes for such a wide range of loss estimates.

So, what’s missing in my judgment, from some experts’ equation (related to losses attributed to economic espionage) is the adversary’s ability to understand and/or replicate the intangible assets, i.e., the intellectual and structural capital and know how especially that are embedded in any misappropriated, infringed, or stolen intangible assets.

Know how (intellectual capital) can, to be sure, be classified as trade secrets (providing the holder consistently meets the six requisites of trade secrecy) or proprietary.  Either way, I can confidently report that companies would be well served if they identified and safeguarded the contributory value of the intangible assets that underlie all of their intellectual property, because that’s what the world’s economic and competitive advantage adversaries need and want most.

Please don’t misinterpret my position…

It would be most unfortunate if any reader of this post should choose to misinterpret my remarks thus far. I have been a strong and consistent researcher and investigator of economic espionage and its many related issues since the mid 1990’s. In fact, I served on a professional association conference panel, along with relevant, high echelon federal agency personnel for one of the initial public ‘roll outs’ of the EEA in 1996.

I want to make my position clear. Which is, while I don’t dispute these expert’s positions about the significance of the problem, I do find reason to dispute their consistent characterization of it solely as an ‘IP problem’.  Intellectual property is comprised of patents, trademarks, copyrights, and trade secrets.  In today’s increasingly competitive, predatorial, and winner-take-all global business transaction environment it’s rapidly becoming a given that company’s intellectual properties are not merely vulnerable, rather the probability that theft, misappropriation, or infringement will occur at some point during the assets’ life-value-functionality cycle is highly likely.  Just how likely, remains somewhat subjective and carries many variables, i.e., asset demand, attractivity, effectiveness of safeguards, etc.

I do hold however, a somewhat different view about what most of the economic and competitive advantage adversaries are targeting and it’s not solely a company’s IP.  Be assured, those engaged in using/applying stolen intangible assets have, in most instances, an equally strong desire to compete globally and in the same market space as the rightful holder-owner of those assets did.  I have worked, studied, and conducted much research on intangible assets and economic espionage over the past 25+ years and find it essential to understand the real or presumed adversaries in social, political, economic, competitive advantage, and intellectual property (legal) history contexts. Collectively, this suggests many of the adversaries are now commencing the early stages of a second generation of businesses and individuals who possess the capability to buy – own private property, intellectual property notwithstanding, and create large scale manufacturing facilities to produce the various products and/or services that sometimes emanate from infringed – stolen – misappropriated intangible assets.

Naming the culprit countries…

A significant difference I, and I presume many other advocates of safeguarding intellectual property rights have noticed, is that these experts are more comfortable today, than in years past, in naming the presumed culprits and/or countries where the cyber attacks – thefts of IP originate.  In a growing number of instances, these experts freely cite either state sponsored or independent operators as the origin of the problems, often citing China, Russia, eastern European countries, and numerous other ‘legacy free’ player countries as being the primary culprits, that is the recipients and/or beneficiaries of the stolen intangible assets

Naming the culprit countries in open sources carries some potential benefits, i.e., the adverse publicity may, in some instances…

  • bring political – diplomatic pressure to bear on the named country’s legislative and enforcement bodies to be more aggressive and consistent in their pursuit of infringers and/or product counterfeiting, etc.
  • prompt holders of valuable intangible (IP) assets to strengthen their international business transaction due diligence to reduce asset vulnerability by putting in place practices and procedures designed specifically to sustain control, use, ownership, and monitor the value, materiality, and risk to the key intangible assets in play in both pre and post transaction contexts.

A lot of information regarding potential infringement, theft, counterfeiting, etc., is in open source…

It’s important to note however, that much of the country specific challenges, insofar as economic espionage, infringement, misappropriation, and counterfeiting, etc., are readily available through the Office of the U.S. Trade Representative, Section 301 list, as well as the Department of States’ Overseas Security Advisory Council and numerous other reputable online sources.

The bottom line…

If any company, be it a startup, small to midsize firm, or part of the Fortune 1000, which is fortunate to have issued intellectual property, usually in the form of a patent, is devoting all or most of it asset protection resources to safeguarding and/or mitigating risks to a patent from possible infringement, I am simply saying such a strategy may be misplaced, because the real targets, particularly emanating from developing countries and the businesses within, is acquiring the actual knowhow which does not translate as a patent per se, rather as the knowledge that is embedded in a patent, i.e., the underlying intellectual, structural, and relationship capital that actually makes ‘things’ work quickly and profitably the first time!

For example, here in St. Louis is the world headquarters of Monsanto, perhaps most known in recent years for its progress in genetically modified organisms and the enforcement of patents it holds on varieties of its soybeans and corn.  I can reasonably assure folks that the global economic – competitive advantage adversaries who engage in economic espionage and/or aggressive business intelligence operations against the likes of Monsanto, are not after the GMO related patents.  Instead, they are seeking the operational knowhow embedded within and/or underlying Monsanto’s patents, and that translates as intangible assets, pure and simple, i.e., the intellectual, structural, and relationship capital accumulated and held by Monsanto researchers and executives.

Intangible Assets Not Well Suited For One-Size-Fits-All Management Or Snapshot-In-Time Assessment

May 27th, 2014. Published under Intangible asset strategy, Intangible asset training for management teams.. 1 Comment.

Michael D. Moberly    May 27, 2014     ‘A long form blog where attention span matters’.

Due to the inherently distinctive development and utilization of most intangible assets, particularly intellectual, structural, and relationship capital, they are not well suited for one-size-fits-all management, snap-shot-in-time assessment, or valuation. This makes it all the more prudent and beneficial for company management teams to achieve the necessary operational familiarity with the nuanced nature/aspects of their firm’s intangibles’ in terms of (a.) how and from whom they originate, and (b.) their development, maturation, and eventual utilization. Doing so starts by (c.) identifying, unraveling, and differentiating those elements of a firm’s intangibles’ relative to their (d.) contributory value, e.g., structural capital (process effectiveness and/or efficiency) and driving competitive advantages.

As the above are achieved overtime, management teams of intangible asset intensive companies will acquire a much clearer and comprehensive picture of the most effective and profitable paths to put their firm’s intangible assets to work and assure they remain so. Whether one chooses to conceive this in a roadmap context viewed through a conventional business lens or more as a ‘big picture’ mosaic, the message remains the same…business decision makers, regardless of their specialization, professional experience, or job title, are, as it were, obligated to acquire, if they haven’t already, strong operational and managerial clarity and operational familiarity with their firms intangible assets!

The reason is, intangible asset management has shifted from merely being an optional task, i.e., ‘nice to have’ skill set should one have the inclination to acquire, to becoming very much akin to a genuine fiduciary responsibility. This level of managerial dexterity and awareness are now essential to effectively and profitably operating intangible asset intensive companies, particularly in today’s globally competitive, aggressive, and predatorial business management and transaction arena in which intangibles’ are inevitably in play.

It’s really quite straight forward, that is, underlying the economic fact that 80+% of most company’s value and sources of revenue today lie in or evolve directly from intangible assets, management teams, regardless of their company’s size, maturity, annual sales, sector, and/or receptivity to innovation develop a…a path for consistently putting their intangible assets to work, while preserving their contributory value and competitive  advantages  and monitoring their materiality and risk will lead to more profitable and sustainable outcomes!

Executing these criteria will absolutely aid management teams to ’put their company’s intangible assets to work’ there remain two significant intellectual and/or business philosophy hurdles to overcome, i.e., the perception that…

  • intangible assets are merely another term for or form of intellectual properties, patents particularly.
  • the stewardship, oversight, and management of a company’s intangible assets are exclusively legal, accounting, or IT processes, instead decisions and actions affecting a company’s intangibles are genuine business decisions to be made in concert with security, risk management, legal counsel, and accounting.
  • intangible assets and their (stewardship, oversight, and) management are the sole province of large, multi-national, Fortune 1000’s and thus irrelevant to startups or small firms.
  • the intensity embedded in today’s go fast, go hard, go global business development and transaction environment is integral to the knowledge (intangible asset) based global economy.

However, unlike conventional forms of intellectual property, i.e., patents, trademarks, and copyrights, there are no certificates issued by the government that tell business owners and decision makers ‘these are your intangible assets’. Instead, responsibility for identifying, unraveling, assessing, safeguarding, managing, mitigating risk, and exploiting a company’s intangible assets lie solely with company management teams. So, at minimum, understanding what intangibles’ are, how they develop as structural capital and the ability to assess their contributory value, commercialization and monetization potential are paramount.

Yes, I am a strong advocate of utilizing intangible assets as fully and as completely as possible. But, I caution readers to not characterize intangiblesas constituting the proverbial silver bullet or assume they can be effectively captured in a one-size-fits-all template to achieve success.

Unless and until management teams, boards, investors, stakeholders, and other business decision makers begin demanding that (their) company’s intangible assets ‘be taken out for a ride’, it’s likely a company’s intangibles will likely remain idle, taken for granted, and otherwise left unused, under-valued, and vulnerable to a global array of competitors to acquire and use at their will.

Reasons why operational familiarity with intangible assets is necessary for every management team…

The primary reason of course is that it is increasingly unwise to dismiss the globally universal economic fact that 80+% of most companies, be they startups’, mid-size, or large firms’, value, sources of revenue, and ‘building blocks’ for profitability, growth, and sustainability evolve from intangible assets!

Too, for most companies, their internally developed (unique, differentiating) knowhow coupled with when, where, and how to use that knowhow, i.e., intangibles, particularly intellectual, structural, and relationship capital best become the commodities that produce the necessary standalone value, competitive advantages, and sources of revenue today’s companies need to remain sustainable.

And again, in today’s highly compressed business transaction and R&D environments, advanced by the millennial maxim, go hard, go fast, go global, ideas and innovation can mature or become obsolete or irrelevant very rapidly. Too, if intangibles are not recognized, effectively harnessed and safeguarded in a timely manner to mitigate the inevitable risks, most intangibles’ can easily meld into the public domain or succumb to compromise, misappropriation, or infringement. Any one of these dilemmas can wholly or substantially diminish assets’ contributory value, induce reputation risk, or negate competitive advantages and opportunities for (asset) commercialization and monetization.

Readers are respectfully obliged to keep the latter in mind, that is, intangible assets can advance a company economically, competitively, and commercially, only so long as theassets’control, use, ownership, value, materiality, and risks are monitored, mitigated, or prevented.

Putting Intangible Assets To Work A Roadmap For Management Teams

May 23rd, 2014. Published under Intangible asset strategy, Intangibles as strategic assets, Managing intangible assets. No Comments.

Michael D. Moberly    May 23, 2014     ‘A long form blog where attention span really matters’.

Emergence and integration of intangible assets…

Intangible (non-physical) assets have quite literally transformed conventional business practices which had, certainly since the industrial revolution evolved around the production and utilization of tangible or physical assets. This economic transformation, i.e., from the tangible to the intangible became increasingly evident in the late-1980’s to the mid-1990’s as company decision makers, management teams, boards, and the innovation – R&D process globally found it in their interest to rethink and restructure their conventional business strategies to include exploiting internally produced or externally acquired intangible assets.

It was becoming clear that intangible assets, somewhat single handedly, were the real origins and foundations to most company’s value, their sources of revenue, and competitive advantages. More specifically, intangible assets had become the ‘building blocks’ for most company’s profitability, growth, and sustainability.

Thus, what ultimately is now referred to as the knowledge (intangible asset) based/driven global economy was an important facet to conducting business in the 21st century and intangible assets were playing increasingly integral and influential roles.

Professor Baruch Lev of New York University’s Stearn School of Business noted that (business) economic activity increasingly consisted of the exchange of ideas, information, expertise, and know how, all of which are intangible assets. Obviously then, a company’s collective competencies and capabilities to effectively develop and strategically exploit intangible assets, particularly intellectual, structural, and relationship capital was rapidly superseding the mere control over or use of physical – tangible assets and resources.

As more management teams have come to recognize the value of many physical (tangible) goods are increasingly based on the degree and/or how well intangible assets have been integrated in the products and/or services being produced, particularly high quality intellectual and structural capital that collectively morph into brand, creative presentation, and content, etc.  So with the origins of company value and revenue showing convincing signs of moving from the tangible to the intangible globally, changers are obviously necessary.

This irreversible economic fact produces new risks…

One outcome of this irreversible change from the tangible to the intangible was that it became clear that while intangibles were being more fully integrated in company’s operational thinking, strategic outlook and planning, they were also having a strong bearing on the responsibilities of Corporate Security Officers. For example, CSO’s would become increasingly responsible for safeguarding and mitigating risk to intangibles which, when materialized tends to longer lasting, if not permanent adverse economic and competitive advantage affects. More specifically, the intangible asset side of a company’s business, i.e., its reputation, brand, image, goodwill, competitive advantages, sources of revenue, relationship capital, will likely experience the greatest impact.

Inevitability of intangible assets playing more significant roles…

So, it was inevitable that intangible assets would be playing increasingly significant roles in company operation, strategic planning, and the types of transactions and other business initiatives they routinely engaged. In other words, achieving consistent business success was now inextricably linked to the effective stewardship, oversight, management, and safeguarding of a company’s intangibles which includes the ability to:

  • identify, unravel, and assess intangible assets collectively as well as their individual contributory value.
  • sustain control, use, and ownership of the assets throughout their respective life, value, and functionality cycles.
  • understand how to exploit intangibles’ contributory and collaborative elements and the competitive advantages they produce.
  • monitor intangibles’ value, materiality, and risk in both pre and post (business transaction) contexts, and in designing and executing exit strategies.

 Acquiring the necessary capabilities…

Acquiring these capabilities and skill sets were rapidly becoming managerial imperatives, regardless of a company’s size, location, maturation, or industry sector and each needs a multi-pronged strategic roadmap which includes demonstrating how to…

  • put intangible assets to work for one’s company effectively and profitably.
  • safeguard the contributory value of intangibles throughout their respective functionality (life) cycle.
  • provide effective stewardship, oversight, and management, and of a company’s intangible assets, not optional tasks, rather as fiduciary responsibilities that can no longer be dismissed, neglected, or relegated to the uninitiated, e.g., it will get done as time permits, when the resources become available, or, when competitors are observed doing it.

 Home grown intangible assets…

To be sure, I recognize that most every company produces – possesses intangible assets which for the most part are ‘home grown’, i.e., internally produced, distinctively relevant, and company specific, irrespective of its location, size, industry sector, or maturity.

In many, instances, however, ‘home grown’ intangibles may not be particularly well suited to one-size-fits-all managerial or company culture circumstances in other words, it’s increasingly unlikely, in my view, that such intangibles would be readily transferrable. Certainly, there is ample evidence – examples strewn about businesses in many different sectors in which intangible asset transferability simply did not work or perform as desired. Instead, they may require nuanced modifications and handling aligned – commensurate with…

  • achieving the most effective and efficient use.
  • maximizing their contributory-collaborative value, and
  • building and strengthening a company’s structural capital and competitive advantages throughout its supply-value chain.
  • specific types of (business) transactions a company most frequently engages.

However, what fits best tends to work best…

To ameliorate the challenges associated with (intangible) asset transferability, Iadvocate very individualized approaches to assessing, utilizing, bundling, managing, and safeguarding. intangibles’. This, I refer to as my ’what fits best tends to work best’ strategy. More specifically, my own experiences (anecdotally) suggest that ’what fits best’ for a company and its operating culture will usually ‘work best’ and produce the best outcomes insofar as helping achieve its business goals, objectives, and maximize the use of its intangible assets.

What fits best doesn’t require company management teams to step outside their areas of expertise…

An important message to convey is that my ‘what works best usually fits best’ approach does notrequire management teams to step outside their primary areas of managerial – operational expertiseto understand and apply the various principles and strategies presented. Instead, this approach is designed to build upon management teams existing expertise, but it adds challenging, relevant, and forward looking dimensions to those areas of specialization and expertise.

Too, my experience clearly suggests the ‘what fits best’ approach respects achievements of management team members while helping companies proceed more effectively and quickly insofar as their value, competitiveness, and profitability. Too, it renders companies less vulnerable to the ever growing array of risks and threats which can rapidly materialize to literally sap the value from intangibles and undermine – erode the value, margins, and competitive advantages of potentially lucrative (intangible) assets.

The countless companies and management teams I have encountered over the past 25+ years, with no exceptions that I can immediately recall, each produces (internally valuable, revenue generating competitive advantages and numerous other ‘building blocks’ that can lead to growth, profitability, and sustainability. Let’s try it together!

Mr. Moberly welcomes and encourages reader comments.

Elevate Investor Confidence Through Patent Quality

May 21st, 2014. Published under Intangible asset strategy, IP strategy.. No Comments.

Michael D. Moberly    May 21, 2014   ‘A long form blog where attention span really matters.’

An inventors’ first call…

So, for the foreseeable future, inventors, researchers, companies, and institutions who engage in R&D, perhaps their initial call should not be to (intellectual property) legal counsel whose business model generally remain exclusive to (1.) patent prosecution, and (2.) patent litigation.

The reason is there is a lot of important work inventors/innovators should achieve before, during, and after a patent has been issued. The time honored inventor/innovator practice of, what I refer to as ‘patent and walk away’ is indeed a poor business strategy.

An intangible asset strategist and risk specialist can perform a valuable, process altering, and strategic function for inventors-innovators which is to identify, unravel, assess, and safeguard the enabling and contributory intangible assets and initiate a ‘what fits best will work best’ for the innovator, their circumstances and investors and the absolutely necessity to sustain control, use, ownership, and monitor asset(s) value, materiality, and risk.

Should be little question by now…

There should be little question in the minds of business management teams and investors today that intangible assets and their first cousin intellectual property (IP) are now integral forces to successful business innovation, operation, and sustainability. The reason, it’s now a globally universal economic fact that intangible assets now comprise 80+% of most companies real value and sources of revenue. In other words, intangibles are the ‘building blocks’ for most company’s growth, profitability, competitive advantage, and sustainability.

But, before we delve further, let’s be respectfully frank. When it comes to IP (patent) counsel, let us not assume all are made from the same cloth. That is, with 25+ years of experience in the intangible asset arena and partaking in literally hundreds conversations with otherwise extraordinarily intelligent and resourceful entrepreneurs and innovators, I remain amazed that such a substantial number recognize one option which they assume will secure their work product that is, a patent.

Anecdotally, I am confident that many, if not most entrepreneurs and innovators, not unlike most business leaders and management teams members assume if one graduates from a professional school, be it law or medicine, etc., most are equally competent in the respective area which they have chosen to specialize, that is, unless something adverse is learned preceding or subsequent to an engagement. Ironically, this constitutes a pedestal of sorts, which we do not reserve for nor convey nearly as quickly, for example, to plumbers, carpenters, and the myriad of other craftsman which we are probably more likely to have direct and often times personal contact are able to observe and assess the outcome of their work, often immediately, compared to say the quality of patent prosecution and issuance. For the latter, it may take months, or even years for ‘quality’ to be assessed or tested relative to (a.) one’s motive for initially seeking a patent, and/or (b.) the litigation, disputes, challenges, etc., which unfortunately, seem, in some sectors, to be a growing inevitability of merely doing business when intangible assets such as IP are in play.

Entrepreneurs, innovators, investors, management teams, boards, and D&O’s who still consider IP in general, and patent prosecution – issuance in particular, as merely constituting an occasional service function that can be (a.) completed with equal excellence, and (b.) sustain the rigors of global competitiveness and litigiousness. In other words, those clinging to such views, are, in my judgment, behind the aggressivity and predatorial aspects embedded in 2014+ business curve and the instantaneous global business transaction environments in which the mantra is winner-take-all.

Howery Survey Of Investor Attitudes on IP Protection

In fact, most respondents to a former Howery law firm ‘Survey of Investor Attitudes on IP Protection’ assert that companies that lack an effective IP (intangible asset) strategy can have a substantial detrimental effect on company performance.  I couldn’t agree more.

Again, in today’s go fast, go hard, go global economic – business transaction in which IP and other forms of intangibles are routinely comprising higher percentages of company’s value and aspired success, investors and financial analysts are attaching more credence to intangibles, particularly those in the form of intellectual and structural before making their ultimate invest – don’t invest decision.  In fact, one in four of the Howery Survey respondents stated they have actually turned down investment opportunities due to a company’s ‘inadequate approach to IP’ which could encompass many things, including patent quality!

Fully 95% of the Howery survey respondents reported that it is no longer sufficient, in the context of investment decisions, for a target company to merely own IP. But, in addition, the IP should be both

The respondents also reported, in substantial numbers, that before a favorable investment decision would be made, the (asset) due diligence should determine and assess whether the target company has specific (best practice) strategies in place, to not only exploit the assets, but also ensure they are tactically and strategically aligned with asset safeguards and competitive advantages.

The bottom line, in my view, in conjunction with the Howery Survey findings, is this; companies that presume conventional IP enforcement protections somehow equate with patent prosecution quality and are thus singularly adequate to attract investors are finding instead, those enforcements, as advertised, are no longer sufficient (standing alone) to favorably satisfy prospective investor demands vis-a-vis their invest – don’t invest decision criteria.

In other words, to elevate the probability of attracting serious investors, companies should also have in place (a.) comprehensive and well defined and integrated strategies to effectively safeguard the key and contributory intangible assets to reflect and mitigate when – where necessary, today’s increasingly aggressive, predatorial, and winner-take-all business transaction environment, and (b.) seamlessly integrate same into a viable competitive strategy for utilizing and exploiting the assets. (Adapted by Michael D. Moberly from the work of Howery, Simon, Arnold & White’s Survey Of Investor Attitudes on IP Protection.

Patents are suitable for framing…

It’s important for entrepreneurs and innovators to recognize that patents are one of four types of intellectual property, i.e., trademarks, copyrights, trade secrets, (and patents) each of which is a subset of intangible assets. The primary difference is that a patent, once issued by the U.S. Patent and Trademark Office (USPTO) can assume a tangible or physical property insofar as the issuance certificate can be framed and hung on an office wall as a testament to an inventor’s – innovator’s hard work and being first to file. Too, having a patent issued conveys a sense of usually well warranted personal achievement that is immediate and very personalized, i.e., manifests as professional expertise and credibility.

But frequently, much to the chagrin of the intangibles’ profession, intellectual property, patents particularly, represent a presumptive and much revered brass ring which technology transfer managers, researchers, inventors, and legal counsel routinely set their sights. Anecdotally, having served in academia for over 20 years, I am inclined to believe this may be so, merely because there is no intangible asset strategist and risk specialist available to effectively articulate lesser expensive and more protectable options that can achieve the same desired outcome.

Nourishing ‘patent only’ strategies…

Anecdotally, I suspect, the personal reverence attached to an inventor’s or organization’s patent (only) ‘thinking’ is rooted in an absence of operational understanding and appreciation for the increasingly critical practices and operational preludes which are now necessary to sustaining control, use, ownership, and monitoring the value, materiality, and risks to the intellectual and structural capital embedded in any patent application (prosecution).

Respectfully, contributing to patent only strategies, is the flawed and very unrealistic assumption that an issued patent constitutes a standalone deterrent to, or safe harbor from the ever growing global cadre of would be infringers and purveyors of economic – competitive advantage espionage. Too, the costs associated with defending patents in disputes and challenges are considerable, making a ‘patent only’ tract, in my view, potentially even more risky. Too, conventional patent only strategies can literally be out-of-reach for frugal inventors and innovation regimes, absent committed and deep pocketed investors.

Too, its quite fair to say that in today’s increasingly aggressive, globally predatorial, and winner-take-all (global) R&D and business transaction environments, patents, like most intellectual – structural capital based assets, are in persistent states of risk to infringement, counterfeiting, misappropriation, theft, etc., from a host of legacy free players, independent (information asset) brokers, and assorted state-sponsored entities most of whom are engaged in some form of economic (industrial and competitive advantage) espionage.

Faux affirmation of patent only strategy…

Venture capital forums are usually private events in which inventors and prospective investors, i.e., venture capitalists meet. Those who have participated in such events know that inventor’s are seeking investment, a critical component of which is inventors making the proverbial ‘elevator pitch’ to an audience of prospective investors, in which the inevitable question, i.e., ‘what is your IP position’ will be asked.

In most instances, prospective investors prefer to hear inventors state that they have already secured a patent, or, in the alternative, a patent application has been filed. The primary reason is that prospective venture capitalists and investors perceive patents to be somewhat of an insurance policy for the invention they may be considering investing. That is, an issued patent provides both the inventor and the company with (legal) standing to pursue infringers and defend against challenges and disputes.

Every inventor I have witnessed presenting at a venture forum, their answer to the ‘what is your IP position’ question is consistently in the affirmative because they fear, if not stated, it’s assumed to be a deal breaker to any subsequent ‘invest – don’t invest’ decision. In this context, patent prosecution is an expensive obligation levied against the inventor which (a.) presumably conveys faith in their invention, and (b.) which furthers the notion that a patent only strategy is a requisite to invention investment attractivity. But, in my view, this question is a faux affirmation that a patent only strategy is the preferred and necessary option. I suppose however, at the 30,000+ feet strategic altitudes which prospective investors – venture capitalists tend to function at such early stages, a very conventional insurance policy is meaningful.

But, my own experiences suggest that, with few exceptions, there are few researchers – inventors working or operating at the same 30,000+ foot altitudes as prospective investors and venture capitalists. Instead, most researchers/inventors are working, quite literally, at ground floor levels, and should come to realize that the ‘gatorades and royalties’ (University of Florida, 1965) are really few and far between.

Again, patents are expensive to obtain, maintain, and defend. And, even if the entire patent prosecution process goes smoothly, the real value of – underlying foundation of an issued patent lies in the invention teams’ intellectual, structural, and relationship capital, i.e., intangible assets. Regardless of being issued a patent or not, those intangibles, I can assure readers, remain very much at risk, risks which the presumed deterrents’ and enforcements associated with conventional intellectual properties fall short.

Many opportunities to stumble…

Any research product, i.e., an issued patent and the underlying and contributory intellectual and structural capital can become entangled and/or ensnared in a sundry of legal disputes and/or challenges, anyone of which can, in addition to civil action, cause investments to be withdrawn or altered significantly thus minimizing furtherance of the invention.

Intangible assets are the enablers of IP…

In far too many instances, I find the intangible asset offspring, which I refer to as the enablers of IP. e.g., patents, are overlooked, dismissed, or overshadowed by the assumption that the time honored practice – strategy of pursuing conventional intellectual property, i.e., patent applications, provisionals, issuances, etc., are perceived as either the best or only option. Of course, I disagree!

To that point, an analogy may be in order. When one seeks the guidance of SEO (search engine optimization) firms for example, to promote one’s website and/or blog, etc., without fail, every SEO I have encountered, ther business development – marketing lead statement is consistently some variation of the following, ‘we’ll get you on page one of Google’!

The reality is, there is no guarantee that getting a website or blog post on page one of Google will produce (business) conversions that website dependant business persons mistakenly assume will evolve merely because something one has written has successfully maneuvered its way through the ‘Google algorithm gods’ and eventually found it’s was to page one, temporarily. The presumption is, that when Internet searches are initiated, seldom does the searcher go beyond page one of their search.

Yes, entrepreneurs can rationalize that all it takes is one good (the right) ‘conversion’ to kick start a company down the path to riches and sustainability. But, reaching ‘page one of Google’ may not be all that a startup company really needs to achieve in order to achieve the necessary level of (financial) sustainability.

Inventors and early stage firms, spinoffs and startups will also need a well-coordinated and focused strategy that effectively utilizes an array of internet resources and social media that presents many different options for an innovation’s exposure and conversion potential, not merely ‘getting on page one of Google’.

This post was inspired by a May 15, 2014 webinar produced by the Intangible Asset Finance Society with speakers John Kepler and James Singer, moderated by Jonathan Salem Baskin.

University Research Technology Transfer Intangible Assets!

May 4th, 2014. Published under University R&D, University Technology Transfer. No Comments.

Michael D. Moberly     May 4, 2014   ‘A long form blog where attention span really matters’!

Having been in academia for 20+ years, I found that most, if not all, university research (whether basic or applied) and the subsequent innovations – inventions produced potentially valuable, and certainly equally important intangible assets.

In early stage research, intangible assets often compliment and/or serve as supporting foundations to the invention – innovation and ultimately the intellectual property (IP), should that be the path and/or strategy the tech transfer office deems appropriate and worthy of the necessary resources.  IP, after all, is what most technology transfer managers, faculty researchers, inventors, research administrators aspire often times to the chagrin of intangible asset strategists and risk specialists.

In far too many instances however, an inventions – innovations underlying and often facilitating intangible assets, particularly intellectual, structural, and relationship capital are overlooked, dismissed, or utterly overshadowed by the time honored and emotion laden predilection associated with acquiring conventional IP, typically the issuance of a patent.

Unfortunately, but quite realistically, today’s road to successful technology transfer is increasingly protracted, and strewn with costly and embedded with asymmetric risks of the type which can readily undermine asset value along with its competitive, attractive, and potentially lucrative components.  Collectively, this suggests the prospects for developing the next high royalty generating Gatorades’, as was the case at the University of Florida are few and far between. Since U of F achieved this research feat in 1965, the landscape of the R&D environment as a whole, has changed significantly in terms of now being global aggressive, competitive, predatorial, and certainly winner-take-all.

But, that shouldn’t and doesn’t keep faculty researchers from continually trying!

After all, it’s an economic fact though, that 80+% of most university-based invention’s value and foundations for generating revenue, especially faculty researcher generated (university-based) inventions, evolve directly from intangible assets.  This economic fact now makes it all the more prudent to factor into technology transfer processes, intangible assets!

Why?, because in most instances, intangible assets underlie, are embedded in, and are valuable by-products of scientific innovations.  To consider intangible assets as after-thoughts or subordinate to intellectual properties relative to technology transfer invention assessments leaves potentially lucrative (licensing) opportunities and value on the proverbial strategic planning and negotiating tables!

Similarly, narrowly conceiving university research, inventions, and technology transfer processes through conventional IP (patent – licensing) only lens often diminishes our inclination to genuinely explore options for exploiting the potential value and competitive advantages generated fromintangibles already embedded in most every invention – innovation.

When intangible assets are overlooked or not properly factored into the technology transfer processes, their supportive and contributory role – value, and even possibly their defensive role for enhancing and sustaining the invention (research) and aspired IP will likely be irrevocably lost.  Increasingly, this bodes well for global economic and competitive advantage adversaries who have the where with all to identify, acquired, and exploit (monetize) those assets for their benefit and profit at the rightful owners’ expense.

There are multiple other benefits that can accrue to university technology transfer teams and faculty inventors’ when they acquire an operational familiarity with intangibles which includes identifying, unraveling, and leveraging the intangibles associated with an invention versus lumping them or dismissing them into the ‘catch all’ goodwill bucket.  In other words, intangibles can and should be integrated into an inventor’s technology transfer strategic plan.

So, with 80+% of an institution’s value and sources of revenue residing in intangible assets, every university inventor and technology transfer office should engage the intangibles now!

While visiting my blog, you are encouraged to browse other categories which you may find relevant. Too, I welcome your comments and inquiries at  314-440-3593 or

Business Plans Intangible Assets’

April 30th, 2014. Published under Business plans and mission statements., Intangible asset training for management teams.. No Comments.

Michael D. Moberly    April 30, 2014   ‘A long form blog where attention span really matters’!

There should be no question by now that the business development and transaction terrain has become increasingly (globally) competitive, aggressive, and predatorial, particularly as intangible assets, e.g., intellectual, structural, and relationship capital have become the dominant drivers (producers) of most company’s value and sources of revenue.  These rapid paced realities have certainly influenced, as well they should, entrepreneurially-minded management teams to re-examine the relevance and applicability of conventionally structured business plans.

I am not suggesting conventionally drawn business plans are irrelevant. They can serve as descriptive (projective) roadmaps of what start-up entrepreneurs want (a.) their business to eventually look like, and (b.) tactical and strategic paths to get there!

Such business plans remain largely portrayed in many college (business) textbooks and curricula, as being the very first step one should take toward starting a business. Interestingly, in an MBA (business management) course, which I taught numerous times at a university, this alternative ‘business plan’ perspective being advocating here, was purposefully integrated in my classes in which there were numerous ‘entrepreneurial spirited’ students who aspired to start their own business, with some already in the early stages.

For some, this alternative perspective with it special attention to (a.) speed, (b.) adaptability, and (c.) intangible assets, prompted numerous and generally adverse reactions, particularly from individuals who had already toiled over writing a comprehensive business plan and now felt wedded to it.  Such reactions are understandable because some types of businesses, may require more ‘start-up’ structure than others, thus a strong and detailed business plan may be necessary.

The issue however, for this post, is that there remains an inclination on the part of some management teams to attach far too much symbolism, in my judgment, to conventionally framed – written business plans as if Justice Scalia (U.S. Supreme Court) were debating whether a business plan…

  • constitutes a living document that’s malleable and flexible as circumstances warrant, or
  • is a more static (stationary) document that should be applied – interpreted only relative to its original intent.

I am finding more management teams exhibiting a greater sense of responsiveness, adaptivity, and preparedness to rapidly execute to reflect the often abbreviated and asymmetric time frames (windows) which new business opportunities arise today.

In other words, there is less necessity for entrepreneurially oriented management teams to feel compelled to adhere to the sequential rigidity associated with a conventionally framed business plan.  In other words, while the tactical remains central, management teams are well advised to not overlook or neglect the necessity to be strategically speedy and forward looking – thinking!

Admittedly, by choice and preference, most of my engagements, are with small, mid-size, and early stage companies. For these, assembling a structured and strategically focused business plan may be subordinate to merely trying to remain viable beyond the first year of launch.

But again, it’s not uncommon to find myself visiting companies which, at first blush, may appear somewhat rudderless, but instead, they are continually evolving, emerging, and have adapted to a perpetual state of re-inventing themselves to reflect and/or accommodate the rapidity of change they are experiencing in their market space and/or exhibited by consumers and an expanding and diverse set of stakeholders.

Underlying this un-conventional ‘business plan’ model lies in management teams’…

  • to be in perpetual state of forward looking – thinking (tactically, strategically)
  • obligation to retain sufficient flexibility and maneuverability in their outlook
  • accommodating transactions and/or opportunities in their market space as quickly and effectively as circumstances warrant.
  • achieving confidence in identifying and exploiting their intangible assets which may not always mesh well with conventional, structured, and inflexible ‘roadmap’ perspectives of formal business plans.
  • to devote much more attention to identifying, developing, safeguarding, and exploiting the intangible assets and embrace flexibility, i.e., being prepared to adapt, change, and have the necessary information, at the ready, to make sound decisions as rapidly as a new deal, proposal, or circumstance warrants.

But, admittedly, a substantial portion of the financial services – lending community finds little, if anything, to be enamored with regarding this alternative model for business plan development.  For this profession, a comprehensive and sequentially structured business plan generally serves as the requisite starting point for most any ‘start-up’ business discussion to reach a second level.

By now, there should be no argument that intangible assets have become the key and irreversible underliers to the success and profitability for most companies. Remember, it is an economic fact that 80+% of most company’s value and sources of revenue evolve directly from intangible assets. But, intangibles must be recognized, developed, and used (exploited) effectively to achieve the value, revenue, and competitive advantages which most are capable.   An important marker for demonstrating the effective use/exploitation of intangible assets, in my view, occurs when management teams…

  • recognize intangibles as being very maneuverable, flexible, adaptable, and ‘bundable’ to accommodate the development and execution of a new product, service, or transaction.
  • know when, where, and how to use them best to achieve particular objectives, i.e., the wisdom, timing, and sense of foreseeability.

In other words, there should be an intangible asset intelligent ‘managerial culture’ in place when conceiving – writing startup business plans!