Michael D. Moberly January 30, 2012
In a British Telecom study of intellectual property infringement in the workplace, i.e., awareness, employee attitudes and overall enforcement titled ‘The Hidden Marketplace’ (2008) it was reported, to no particular surprise, that there is growing agreement and appreciation among company management teams (in the UK) that intellectual property and other forms of intangible assets are indeed valuable and warrant not just protection, but regular monitoring as well.
This still very relevant UK-based research focused primarily on the demand side, i.e., employee-consumer interest and demand for acquiring counterfeit goods while at workplace brought much needed clarity to the ’hidden marketplaces’.
A particular finding stood out in my view, but still, no surprise to professionals serving this arena, is that the parallel perspectives of IP value and protection are frequently more aspirational than reality. That is, management teams are increasingly likely to find themselves:
- distracted by other, seemingly more pressing issues
- lacking experience to design and execute procedures and practices to safeguard valuable (intangible) assets that are not physical or tangible.
My many years of experience in this arena find the above to be a fairly broad managerial and oversight conundrum that in part, is reflective of the rapidity which companies in all sectors have become enmeshed in the global knowledge – intangible asset dominated business (transaction) economy.
While increasing percentages of businesses possess significant portfolios of valuable knowledge-based assets, it’s still common to find many, if not most, to have only the minimum, if any, safeguards or monitoring capabilities in place for their intangible assets.
A company or management team’s rationale for this oversight is often rooted in the unsustainable notion that instituting such (offensive – defensive) practices constitute operational luxuries vs. business necessities.
Such positions are particularly revealing given the economic fact that today, 65+% of most company’s value, sources of revenue, and building blocks for growth and sustainability evolve directly from intangible assets. That’s a reality that must be factored into a company’s enterprise risk management equation.
Here are some key starting points for developing intangible asset safeguard and monitoring initiatives:
- ensure conventional intangible assets, i.e., intellectual properties, are consistently and properly registered
- broaden the focus of (intangible) asset protection practices to encompass sustaining control, use, ownership, and monitoring their value and materiality
- initiate intangible asset awareness-recognition programs for management teams, c-suites, and boards that reflect their fiduciary responsibilities evolving from Stone v Ritter
- develop capabilities to rapidly identify and assess (monitor) any changes in an assets’ contributory value and promptly take action to mitigate adverse economic – competitive advantage consequences.
An important outgrowth of the study was that it identified relevant tools and assistance for employers and enforcement agencies to address IP theft, infringement and the counterfeit goods problem from an inside (internal) perspective.
This study also examined three additional issues pertinent to the global universality of ‘hidden marketplaces’, i.e.,
1. employee attitudes regarding the value of intangible assets, particularly intellectual property
2. company management team approaches to safeguarding its valuable intangible assets including IP
3. the levels of awareness that exist among management teams about near and long term problems and adverse consequences (what I often refer to as cascading affects) associated with theft – misappropriation of IP (intangible assets) from the workplace.
My experience suggests, management teams would likely find these issues more relevant and become more receptive to ‘tackling them’ if they were framed in normative contexts as conveyed below, to spark discussion and deliberation, i.e., as consistent action items on c-suite and board agendas. For example:
- what should management team attitudes be about safeguarding their company’s most valuable assets?
- what is the necessary level of awareness management teams and employees should possess to sustain control, use, ownership and monitor the value and materiality of their intangible assets in order to bring the most benefit and return to their company?
The answer to these normatively phrased questions lie:
- at the heart of: the knowledge – intangible asset based economy
- with c-suites, boards, and management teams taking action that truly reflects their fiduciary responsibilities
- in recognizing 65+% of most company’s value, sources of revenue, and building blocks for growth and sustainability
- with the ability to sustain control, use, ownership, and consistently monitor the value and materiality of those assets.
Absent such recognition and the implementation of effective procedures and practices to achieve this state, it’s becoming increasingly unlikely a company will experience the levels of growth, competitive advantage, and profitability which most are capable!
(This post was inspired by a study titled ‘The Hidden Marketplace: Protecting Intellectual Property In The Workplace – Research Into IP Infringement in the Workplace – Awareness, Attitudes, and Enforcement’ produced by Patricia Lennon of BT Internet in December, 2008)