Michael D. Moberly February 24, 2012
1. It’s an economic fact that 65+% of most company’s value, sources of revenue, sustainability, and growth potential evolve directly from intangible assets, therefore its all-the-more likely intangible assets will be in play and integral to most deals and/or transactions.
2. Conventional intellectual property protections issued, i.e., patents, copyrights, trademarks
a. no longer constitute standalone (global) deterrents to or safe harbors from would be infringers, product counterfeiters, or misappropriation.
b. lull asset holders/owners into assuming additional measures to sustain control, use, and monitor value of those assets are unnecessary
c. no longer serve as consistent predictors of asset value, transaction success, or asset control and use will be uncontested.
3. The value, competitive advantages, and efficiencies produced by intangible assets are often fragile, perishable, and non-renewable. Once compromised, full asset recovery (value) is seldom achievable.
4. The management, stewardship, and oversight of company’s intangible assets are often characterized as being the primary domain of legal counsel and accounting processes. Such conventional perspectives need to be re-framed as c-suite and board level fiduciary responsibilities.
5. The time frame when company’s can realize the most value from theirintangibles relative to an assets respective life – value – functionality cycle continues to be compressed. In part, that’s due to:
a. lower barriers to market entry
b. rapid profits achieved through globally organized asset misappropriation and infringement
c. product counterfeiting that routinely pollutes legitimate supply-distribution chains globally.
6. The growing global universality of regulatory mandates for accounting and reporting the value, materiality, and financial performance of intangible assets, e.g., the international equivalents to the Sarbanes-Oxley Act and FASB statements has led to greater transparency but has created the unintended consequence of open source vulnerability.
7. Knowledge-based (intangible) assets are increasingly vulnerable to compromise and undermining. Such risks have risen to the point decision makers should assume that once an asset has been compromised, economic and competitive advantage – market space hemorrhaging will commence immediately and globally.
8. Many of the risks to intangible assets, i.e., theft – compromise, etc., are attributed to highly sophisticated and globally predatorial data mining, open source data analysis, competitive intelligence, and state sponsored economic/industrial espionage operations. Anyone of which can undermine – counter a company’s strategic planning, new product launches, competitive advantages, and/or entangle assets in costly, time consuming legal challenges that disrupt – stifle deal momentum etc., at increasingly earlier stages.
9. Develop techniques/strategies for structuring business transactions to prevent, counter, and/or mitigate existing and emerging risks. They should extend beyond conventional (IT, IP) audits or business valuation checklists and be applicable to both pre and post (business) transaction contexts.
10. Intangible asset measurement, i.e., performance, contributory value, materiality, etc., should be lessabout how to measure and more about:
a. determining what assets to measure
b. which assets carry proprietary elements and competitive advantages, and
c. the inter-connectedness of those assets.
While visiting my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) . Should you find particular topics of interest or relevant to your circumstance, I would welcome your inquiry at 314-440-3593 or m.moberly@kpstrat.com
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