My experiences in mitigating risks to early stage companies’ mission critical intangible assets suggest…there are 4+ ways early-stage companies’ (proprietary) intangible assets become ensnared – entangled in time consuming, costly, momentum stifling, and often irreversible disputes and/or legal challenges.

That is, their intellectual, structural, competitive, and/or relationship capital, including intellectual property (IP) has been compromised, frequently as a consequence or combination of…

1.  misplaced (or violation) of trust originating with (a.) a business partner, (b.) research collaborator, (c.)employee, (d.) colleague, or (e.) professional service provider.

2.  operational or procedural miscues related to (a.) poorly executed (product-service) market entry planning and launch, (b.) being dismissive or reckless about the necessity to sustain control, use, and ownership of key intangible assets, or (c.) failure to monitor mission critical intangible assets’ value, competitive advantage, revenues, materiality, and risk.

3. unethical or illegal conduct executed by ultra-sophisticated foreign – domestic entities functioning internally or externally as economic espionage, i.e., theft, misappropriation, infringement, purposeful (premature) leakage, etc.

4.  key (competitive) intangible assets accessed-acquired through sophisticated competitor-business intelligence and/or data mining operations functioning globally.

Entrepreneurs and early stage company management teams inclined to…characterize or dismiss any of the above as merely constituting ‘a risk of doing business’, particularly in today’s ‘keystroke speed’ increasingly competitive, aggressive, globally predatorial, and winner-take-all business (transaction) environment, does so at the at the peril of their hard work and company’s sustainability.

For early stage companies, well designed and executed procedures, processes, and practices must extend…beyond the ‘mba lite’ aspects of business to preserve and monitor one’s hard earned intangible assets and IP. Absent consistent attention to asset (risk) vulnerability and criticality outcomes, common to the materialization of certain risks that, with more frequency, rise beyond mere probability to becoming inevitabilities!

More specifically, the probability a promising early stage company…with particularly innovative and commercializable intangible assets and IP will experience materialization of multiple and simultaneous risks elevates proportionately.

It’s often deemed more exciting and relevant for early stage company decision makers to focus their attention on what they interpret as having more immediate concern and effect…ala start-up management, raising capital, and operational and product-service commercialization issues.  Perhaps, in part, this is because these responsibilities are frequently interpreted as representing the conventional ‘must follow paths’ to achieving a successful, competitive, and lucrative startup.stage com

As an intangible asset strategist and risk specialist…safeguarding of an early stage company’s foundational – mission essential intangible assets and IP, is often mistakenly interpreted by decision makers, as being less necessary once (if) a patent has been filed or issued.  Such interpretations are all-the-more unfortunate when it is presumes a patent application (provisional or issuance) are sufficient stand alone forms of deterrence, which I refer to as the ‘patent and walk away’ syndrome.

Delays in, or dismissing the need (and, fiduciary responsibility for) executing asset value – competitive advantage preservation and safeguards, obviously elevate risk…for asset compromise, infringement, and misappropriation.  In today’s hyper-aggressive and predatorial R&D and transaction environment, its prudent to consider risk as not if, rather when they materialize, most have the capacity to adversely affect the targeted company economically and competitively.

So, in most instances, when risks materialize, they will…adversely affect a company’s foundational – underlying intangible assets, and absent relevant safeguards, legal recourse options may be limited. Too, in today’s ‘winner-take-all’ business – market entry environment, early stage companies stand to lose everything their principals have worked so hard to achieve.

Michael D. Moberly June 15, 2008  St. Louis  [email protected]  ‘Business Intangible Asset Blog’ where attention span and action really matter! 

As always reader comments are respected and encouraged.