Avoid Treating Intangible Assets and IP As Renewable Resources…

Ideas, by definition, originate – exist, at least initially, solely in one’s mind, where they can be relatively secure, but not terribly useful.  To exploit-deliver (potential commercial) value, an idea must be expressed-communicated in some manner. This is when potential problems and challenges commence for the ideas’ originators (holders, owners). https://kpstrat.com/wp-admin/post.php?post=230

Fundamentally, safeguarding – sustaining control, use, and ownership (rights) to the ‘product of one’s mind’, i.e., may occur as a registered patent, trademark, copyright, or intellectual property.  IP, represents a basic social contract between society, its government, and the individual(s) with whom the idea originated (Choate, p.218). No argument thus far, right! https://kpstrat.com/wp-admin/post.php?post=207

It’s prudent to avoid assuming that registered IP is a viable substitute for merely ‘keeping ideas secret’...for some background, please note, when intangible asset (IP) compromises occurred in the pre-Internet era, i.e., misappropriation, theft, infringement, counterfeiting, etc., a conventional ‘business continuity – contingency’ planning – strategies were usually deemed-sufficient.

A significant component to such plans generally evolved around trying to contain…the extent of the loss-damage as it was understood – projected to be at the time and to be executed through various (placating) contingencies that would deliver some semblance of operational continuity for a company.

Today, however, while containment of risk, loss, damage, etc., remains managerially laudable…it often falls short of reflecting the keystroke speed realities of today’s globally asymmetric (intangible asset) risk environment, wherein valuable – competitive advantage producing intangibles can be accessed, acquired, and disseminated with stealth and keystroke speed. And, once an intangible asset has been found to have been compromised, conventional containment options, standing alone, are seldom viable, and, instead, can be a very disappointing, irreversible, and expensive strategy.

Such risks to intangible assets and IP today…whether they manifest in the form of compromise, misappropriation, infringement, are consistently asymmetric, change rapidly, and can instantaneously…

• stifle a company’s projected economic, competitive advantage, and lucrative momentum.
• undermine a transaction or a company’s strategic business plan.
• erode, if not wholly evaporate, intangible assets’ value and projected contributory role and margins, etc.

Now, the value and competitive advantages embedded in – produced by...whatever intangible assets are being targeted, can be quickly discerned-differentiated, extracted, and distributed, also at keystroke speed, to…

…an ever-expanding global labyrinth of sophisticated and variously organized and intertwined economic-competitive advantage adversaries, information asset brokers, and product-service counterfeiters, again, at keystroke speed!

Thus, while conventional intellectual property enforcements…i.e., patents, trademarks, and copyrights remain the presumptive requisite for conveying…

• asset ownership, and
• standing to address potential and increasingly probable legal disputes and challenges,

…the fact is, conventional IP enforcements are (a.) reactive, (b.) require self-policing, and (c.) the deterrent effects have diminished and are routinely misunderstood by entrepreneurs and management teams.

In today’s predatorial, aggressive, and ‘winner take all’ global business operating environment… conventional forms of intellectual property (enforcement) are becoming less relevant, and perhaps, in some respects, even obsolete, relative to the boldness and 24/7/365 predatory practices and successes of economic – competitive advantage adversaries. In part, no doubt, such circumstances have contributed to – spawned attitudes whereby business transaction leadership feels obliged to go fast, go hard, go global, and concern themselves with the inevitable risks and challenges after the ink has dried.

That is not to imply, nor signal…conventional IP enforcements should be abandoned. But, the reality is that the once respected rights and safeguards afforded to innovators and entrepreneurs (through patents, trademarks, and copyrights) are now being routinely outpaced, circumvented and wholly disregarded through a broad spectrum of individualized and/or country-centric laws, practices, and policies frequently designed with the intent to achieve some level of parity and competitiveness without incurring the cost of idea-asset origination and development.

Through my lens, any assumption that the issuance of a patent, standing alone…is today, sufficient-to sustain the necessary control, use, and ownership rights to one’s intangible assets, i.e., intellectual, structural, relationship capital, is bluntly, no longer credible.

Again, conventional intellectual property enforcement carries little benefit to idea originators – asset developers, aside from providing standing for probable – eventual litigation…even still, the responsibility lies with the assets’ originators and decision makers to apply best practices to consistently monitor and defend the intellectual property rights in a timely (almost real time) manner.

For these reasons today, I encourage intangible asset developers and IP holders to...avoid assuming a patent, trademark, or copyright can, or should stand, as the primary (standalone) means of defense insofar as ensuring indeterminate (17 years of) control, use, and receipt of economic/competitive advantage benefits from their earned and expensive know how.

Contributing to (exacerbating) the probability that an intangible asset originator – holder will…experience at some point, active – on-going attempts to compromise their IP and foundational intangible assets, is the ability and willingness of sophisticated data mining – business intelligence technologies applied – directed in highly predatorial manner to the desired-targeted  intangible assets and IP, renders those assets vulnerable at increasingly earlier stages of (their) origination and development.

In light of the often, under-appreciated economic fact that…80+% of the value, wealth creation, and sources of revenue for most company’s today lie in – emerge from their intangible assets, it’s surely reasonable now to assume, that an unknown, but probably significant, percentage of many company’s intangible assets…

• go unrecognized and undervalued, relative to their potential contributory role and value for licensing, and
• are generally irretrievable with all their value and competitive advantages intact (if-when they are compromised.

This is especially relevant when companies’ know how (intellectual, structural, and relationship capital)…has been thoroughly embedded in a company’s products and services.

Put another way…the probability that a company (owner, holder) with valuable-competitive intangible assets will experience a compromise – breach – loss to their IP and underlying intangibles should be regularly re-visited, but preferably not in terms of merely being considered another (perhaps tolerable) ‘risk of doing business’!

Michael D. Moberly – August 27, 2018 – St. Louis – kpstrat.com. – [email protected] – ‘Business Intangible Asset Blog’ (since May 2006) https://kpstrat.com/blog where attention span, business realities, and solutions converge! Intangible Asset Strategist and Risk Specialist

Readers are invited to explore other papers, posts, and books I have published at https://kpstrat.com/books/

 

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