Intangible Assets: There Remain A Lot Of Rembrandt’s In Company Attics!

Michael D. Moberly    May 9, 2012

Here’s an interesting perspective offered by Ashok Jain, a principal in the (IP) valuation services unit of Deloitte.  Mr. Jain suggests that interactions he has had with large U.S. companies lead him to draw this conclusion…

most profess a fairly high-minded level of IP prowess, but, relatively few can answer substantive questions about the management of their IP, (and, I might add, probably their intangible assets, as well) e.g.,

  • does your company maintain an inventory of its patents?
  • which patents (IP in general) are core to business operations and strategic plan?
  • is your company exploiting its IP and other intangible assets to generate the greatest possible value?

Colleagues (in the IP and intangible asset arena) point to numerous management teams, c-suites, and boards who have achieved very impressive (national, international) reputations (credit for) being the originator, facilitator, and/or enabler related to the creation and use of new ideas, which in numerous instances, eventually become issued intellectual property  

Respectfully, I’m sure, Mr. Jain reports that a percentage of these individuals are not always inclined to exercise either a willingness or ability to accept (assume) a personal (hands on) role in the management (stewardship, oversight) of those new ideas. Instead, it’s reported that numerous company leaders will delegate the responsibility for stewarding and overseeing the development of new ideas to either legal counsel or the CTO side of their business. 

One possible explanation for such reluctance, Jain explains, is that the technical and legal units of a company are frequently portrayed as and/or assumed to be ‘cost centers, not profit centers’.  Such ‘cost center’ characterizations tend to give credence to the view that there is less (insufficient) interest among management teams and boards regarding the business (return on investment) aspects of utilizing – exploiting IP and intangible assets.

Jain’s report also suggests, very unfortunately, I might add, that a probably large (but unknown) percentage of companies…

  • literally give away or perhaps worse, inadvertently relinquish valuable IP and intangible assets without realizing it.
  • do not use their IP or intangible assets as effectively, offensively, or defensively as they could to block competitors, generate new sources of revenue, or favorably leverage the assets to benefit their stakeholders or supply (value) chain.

Question; do these presumably unfavorable perspectives constitute a crisis relative to current practices in the management, stewardship, and oversight of company’s IP and intangible assets? 


Quite possibly it does in my view, inasmuch as it represents another example of management teams, c-suites, and boards not taking their (fiduciary) responsibilities for managing their company’s IP and intangible assets as seriously as they should, especially when looking at it through a business – return on investment lens.

Being a strong advocate of utilizing – exploiting intangibles as I am, yes, I do believe company management teams need to engage  their intangible assets and IP in a more business-like manner and not consider those increasingly valuable and strategic assets as merely sandboxes in which a little H2O can be periodically added to enable the erection of temporary (sand) castles whose value and relevance will quickly crumble and dissolve into indistinguishable (non-value, non-revenue producing) forms as the moisture evaporates or the tide changes.   

This scenario is particularly relevant today, when so many businesses are, quite literally on the leading edge of the knowledge (intangible) asset based global economy, wherein intangibles comprise increasingly higher percentages of company value, sources of revenue, and foundations for growth.  Bottom line; management teams and boards need to recognize, if they don’t already, how their company’s intangibles can be effectively applied and exploited.  This includes not overlooking the nuanced ways of using (leveraging, positioning, bundling) these assets as strategic weapons. 

Interestingly, this all can occur, sometimes very simply, by ensuring the right parties, with the right expertise (intangible asset specialists) are not just ‘at the table’, but there is an attitude of receptivity for what they say. This means includes seeking practitioners that possess not merely legal – technical expertise about intangibles, but also specific business acumen to…

  • practice consistent and effective stewardship, oversight, and management of the key assets, and
  • sustain control, use, ownership, and monitor asset value and materiality

In other words, the ability to make those assets execute, i.e., produce the value and revenue opportunities which, in most instances, they’re capable.  So to, should new product development and design meetings include specialists on sustaining control, use, ownership, and monitoring the value and materiality of key intellectual capital assets.

The end game, of course, is to ensure that a company’s investments in and/or acquisition of intangible assets, IP, and R&D, blend effectively with a company’s strategic and market planning. 

To be sure, there is a growing number of management teams and boards who not only ’get it’, but are ‘getting it right’, and that’s a good thing!

Often though, ‘getting it right’ has been preceded by some missteps, miscues, and missed opportunities most of which are not irreversible. However, it remains quite evident in some businesses that intangible assets and IP are presumed to be strictly legal – technical functions absent recognition for the (business) fiduciary responsibilities related to asset management, stewardship, and oversight.  This, of course, underlies the reason why such large percentages of IP and intangible assets are ‘non-practiced’.  In other words, the valuable and competitive advantage creating intangible assets a company produces often go one way, while the R&D, CTO, legal counsel, marketing and new product design groups go another way, and never the ‘tween shall meet’.

One result of this of course, is that a significant percentage of companies leave valuable intangible assets ‘on the table’, i.e., either unrecognized, under-utilized, un-valued, or unused.  That’s why I often remark to business leaders, there remains a significant number of ‘Rembrandt’s accessible, available, and useable, but they’re not all stored in a company’s attic, rather, they’re right in front of us.  They merely need to be identified, unraveled, assessed, and put to work!

(This post was inspired and adapted by Michael D. Moberly from article in Chief Executive.Net, titled ‘Taking Intellectual Property Seriously’.)  Reference to book authored by Kevin G. Rivetter and David Kline titled ‘Rembrandt’s In The Attic: Unlocking The Hidden Value of Patents’.


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