It is 2019, and I remain hard pressed to understand why… administrations, cabinet secretaries, media pundits, and even corporate c-suites, consistently mischaracterize the assets sought – being targeted by global cadres of economic and competitive advantage adversaries as solely IP (intellectual property), i.e., patents, trademarks, copyrights, and trade secrets, etc.
I have been actively engaged in all things intangible since the early 1990’s…initially as an academic researcher and now as an intangible asset strategist, risk specialist, and blogger https://kpstrat.com/blog I can confidently assure readers the target(s) of global cyber – economic espionage is the intellectual, structural, and relationship capital ala intangible assets which (individually, collectively) are the foundations of – are embedded in all intellectual properties!
Continuing to mischaracterize (inadvertently, unwittingly, or purposefully) cyber – HUMINT economic espionage…as exclusively related to the misappropriation, infringement, counterfeiting, or compromise of IP, paints an incomplete portrait of the ‘world’s second oldest profession’.
Yes, I suppose, using that singularly simplistic phrase…ala intellectual property theft, to peripherally describe a persistent, complex and interwoven web of global ‘legacy free players’ who operate at will and engage in sophisticated competitive intelligence and/or its illegal cousin, economic espionage.
Also, characterizing this phenomenon in a singularly simplistic phrase…may elevate business and public awareness. However, it is well documented that a relatively small percentage of the public…
- understand what intellectual property is, and the
- intricacies, distinctions, implications, and impact, when another party misappropriates, infringes, or compromises it integrity and ownership exclusivity.
So government officials, many business leaders, and the echo-chamber chorus of media pundits…continue to portray economic espionage, theft of proprietary intangible assets, and data/information mining with the presumed more understandable phrase, intellectual property theft.
Is it merely a distinction without a difference…?, certainly not in my judgment. It is indeed much more. That is to say, a company’s intangible assets, e.g., intellectual, structural, and relationship capital (know how) which today, unequivocally – factually comprise…
- 80+% of most company’s sources of value, revenue, competitive advantage, and sustainability!
In other words, specific know how-based (intangible) assets are…precisely what most independent as well as state-sponsored economic – competitive advantage adversaries’ (globally) need, want, and therefore will engage in the necessary aggressively predatorial and stealthily means (trade craft) to successfully execute compromise – acquisition of those assets which legally belong to others, because doing so…
- is the quickest and least expensive route to achieving global competitiveness – dominance in specific sectors.
Issued patents provide legal standing…that’s true inasmuch as it provides holders with (legal) standing to bring criminal and/or civil action against alleged infringers and/or misappropriators. And yes, one of the requisites for a countries’ membership in the World Trade Organization (WTO) is having in place a comprehensive intellectual property rights (enforcement) regime.
I do hold great respect for business persons, entrepreneurs, researchers, etc., who apply for and receive an issued patent…from their government, particularly for what the patent holder has deservedly achieved.
A patent issuance certificate certainly warrants framing and hung on a wall of prominence…for all to see and dutifully admire. But readers are strongly encouraged to avoid assuming that an issued patent today constitutes an absolute and/or stand alone deterrent, ala an invisible fence to ward off would be infringers.
Instead, its important to recognize that today’s ultra-sophisticated… aggressively predatorial, and stealthy economic and competitive advantage adversaries, irrespective of whether they are independent contractors or state-sponsored, both are seeking the intellectual and structural capital that underlie and which serves as the foundational prelude to every issued patent.
The notion that an issued patent is somehow “magically safeguarded”…for the patents’ duration or its life-value-functionality cycle, whichever comes first, is approaching folly, at best.
Seeking a patent of course, is often a business decision, pure and simple…particularly in today’s go fast, go hard, go global business transaction environment.
So respectfully, any assumption that the issuance of a patent serves, in any way, as a specific deterrent...to economic espionage or it being sought by competitive advantage adversaries, or insiders inclined to misappropriate the assets’ along with the underlying know how, represents not just wishful thinking, rather naïvete which has outlived its 21st century relevance.
I find it useful during client engagements to pose, at the opportune time, the following scenario…
- why would an economic – competitive advantage adversary (country, government entity, or even independent (legacy free) data mining operation, information broker, or competitive intelligence group…
- to undertake the risk of accessing – acquiring the contents of a patent, i.e., usually its structural capital, when issued patents (essentially the same information) will be published and posted in the public domain, in the U.S. anyway, at the U.S. Patent and Trademark Office website? https://us.gov.uspto
Yes, one may say ‘the benefits far exceed the risks’…true enough in most instances. More specifically, the answer to that question lies, in my view, in pure economic competitiveness – national security terms, which frequently translate as ‘getting and doing what’s necessary to get and remain ahead’ of competitors, rivals, and/or adversaries.
I purposefully belabor this point to make these distinctions…i.e., after many years of investigative (business) research along the entire spectrum of economic espionage, largely to achieve near-long term competitive advantage, this issue goes directly to the heart of perhaps the most important question for U.S. headquartered company boardrooms, which is…
- how and which proprietary – knowledge assets, i.e., intellectual, structural, relationship capital, warrants higher level and more sophisticated safeguards and resilience planning?
The answer is quite clear…it is the intellectual, structural, and relationship capital categories of (intangible) assets that possess – deliver the greatest contributory role and value to a company as sources of revenue, competitive advantage, and sustainability.
But, perhaps most critical and troublesome to the holder – originator of issued intellectual properties…as well as valuable and competitive advantage driving intangible assets are three, generally irreversible, realities…
- once gone (i.e., stolen, infringed, misappropriated, etc.) exclusive – proprietary knowledge and knowhow, will likely be gone forever!
- seldom can the rightful asset holder or company ever fully recoup such losses.
- knowledge-based (intangible) assets are often quickly and readily convertible for adaptation and exploitation however and whenever the ultimate recipient or adversary wishes.
Let’s assume, for discussion sake…the targets of preference for a particular economic – competitive advantage adversary, data mining operation and/or information broker is some form, type, or category of intangible asset which can fill an immediate or strategic need or demand and therefore serve as a key component to a previously unsolved puzzle to benefit an adversary.
I respectfully encourage readers to not overlook or dismiss this perspective…as being fanciful or irrelevant. Instead, try ‘drilling down’ a bit, and examine each broad (intangible) asset category through a business competitive, value, and revenue lens, be it held by a company, university, or independent R&D environment.
One outcome of this exercise is to recognize…what type(s) of safeguards are necessary to fully preserve each assets’ value and potential exploitation, monetization, and commercialization properties for the duration of the assets’ respective life, contributory role, value, and functionality cycle…
- the reason; that’s precisely what matters most today and that’s what global adversaries are seeking to disrupt to their benefit.
In an effort to give more credence to the point I am endeavoring to make here is…I have adapted the following from two well respected and current sources…
- ‘The Intangible Asset Handbook: Maximizing Value From Intangible Assets’. Weston Anson. 2007. American Bar Association, and
- ‘Untangling Intangibles’ Tamara Plakalo February, 2006. Managing Information Strategies (Australia).
Michael D. Moberly [email protected] St. Louis April 10, 2018 the ‘Business Intangible Asset Blog’ since May 2006, 650+ posts, ‘where intangible assets, business, and solutions converge’.
I respectfully invite you to explore other relevant blog posts, video, books, and position papers at https://kpstrat.com/blog
As always, your comments are appreciated.