Michael D. Moberly December 1, 2014 ‘A blog where attention span really matters’!
There are four (typical) ways in which early-stage companies’ proprietary intangible assets, i.e., IP and its underlying intellectual, structural, and social/relationship capital become ensnared in time consuming, costly, momentum stifling, and sometimes irreversible personal disputes and/or legal challenges. That is, they are frequently a consequence and/or combination of…
- misplaced (or violation) of trust in business partners, research collaborators, employees, colleagues, and/or professional service providers, etc.
- operational or procedural miscues, etc., i.e., poorly executed manufacturing and/or design and delivery of product/services, market entry planning and launch, being dismissive about sustaining control and use of key assets, or monitoring their value, materiality, and risk.
- unethical or illegal conduct of others (internally, externally), etc., i.e., theft, misappropriation, infringement, intentional leakage, etc.
- key intangible assets acquired through competitor/business intelligence, data mining initiatives, and/or economic espionage, etc.
Entrepreneurs and early stage company management teams who are inclined to mistakenly characterize or dismiss any of the above as merely constituting a necessary risk of doing business, do so at their peril. That’s particularly evident in today’s instantaneously competitive, globally predatorial, and winner-take-all business (transaction) environments.
For even what may be ostensibly well managed early stage companies, asset monitoring and safeguard practices must go beyond ‘mba light’ takeaways because absent such attention, asset vulnerability and criticality will rise beyond being a mere probability to inevitability! In other words, the probability an early stage company, especially those embedded with particularly innovative, commercializable, and possibly dual-use intangible asset rooted technologies will have one or more of the above risks materialize, elevates.
Understandably, it’s often tempting for early stage company decision makers, to focus their time, attention, and limited resources on what may appear, at the time, to be more immediate concerns such operations, management, raising capital, marketing, and commercialization issues. The reason, the latter largely represents the conventional, sole, and time-honored path to successful startup, while the stewardship, oversight, and management of key, foundational intangible assets beyond patent filings or trade secrecy requisites frequently remain mis-portrayed as unrecoverable costs and elusive initiatives versus on-going fiduciary responsibilities.
Equally unfortunate, some early stage company management teams presume a patent application, provisional, or issuance are sufficient (stand alone) forms of protection and/or deterrence, something which I refer to as the ‘patent and walk away’ syndrome.
This contributes to making most any delay in or reluctance to execute relatively simple, yet absolutely necessary asset value – competitive advantage preservation safeguards as risks which elevate the probability that economic – competitive advantage risk will materialize. Too, absent the presence of value and competitive advantage safeguards, options for legal recourse will be limited. Collectively, this positions early stage companies to lose everything their principals have worked so hard to achieve, particularly in this ‘winner-take-all’ global business – market entry environment.
As always, reader comments are welcome and respected.