Obligations To Safeguard Intangible Assets

I respectfully encourage every business management team to acknowledge and integrate this economic fact…i.e., 80+% of their company’s value, sources of revenue, competitiveness, and sustainability lie in – emerge directly from intangible assets.

More specifically, more companies today are intangible asset intensive and dependent, i.e., 

1. It behooves business management teams to also acknowledge…the  desirably that intangible assets will be consciously, tactically, and collaboratively fused – commingled to become cornerstones (contributors to, producers – sources of) company – business value, revenue, competitive advantage, reputation, sustainability, and opportunities for future wealth creation.

2. Ensure there is clarity throughout company management team regarding the contributory role and value of intangible assets…hence,

  • the prudence of developing and sustaining a proprietary state for a company’s key intangible assets.
  • ensuring clarity about why, under what circumstances, and from whom and from what, intangible assets warrant establishing proprietary safeguards.

3. Distinguish proprietary intangible assets…which are not in the public domain, e.g.,

  • designated financial data, R&D initiatives, strategy, internal research findings, and other information-data designated as being the exclusive property of a specific developer or holder.
  • data-information in which there is a contractual and/or presumptive (perhaps fiduciary) duty owed not to use or reveal in an unauthorized manner. (Adapted by Michael D. Moberly from the Business Dictionary)

4. Intangible assets are occasionally misidentified – mislabeled as proprietary and/or trade secrets, i.e., proprietary information…

  • is information that a company wishes to be – remain confidential and not accessible-available to those outside a company.
  • can include information such as formulas, processes, and/or methods used in production, for marketing, as competitive advantages, etc. (Adapted by Michael D. Moberly from Reference for Business)

5. Proprietary information also constitutes information-data a specific person may possess…own, and/or hold some manner of exclusive right to, i.e., in the context of a proprietor. Proprietary may also apply to information that is used, produced, or marketed under an exclusive legal right of its originator, inventor, and/or maker, ala a drug which a patent has been applied and/or issued and therefore legally protected from competition. (Adapted by Michael D. Moberly from Merriam Webster Dictionary)

6. Practically speaking, intangible assets designated as proprietary, should seldom, if ever, be equated with trade secrets… it is true, internally developed intangible assets are often the genesis of competitive advantages, and, as such, become sources of revenue, value, reputation, competitive advantage, and sustainability. But, due to the manner-in-which these influential (intangible) assets often eventually, come to be acknowledged, applied, leveraged, and exploited, there would be inevitable legal challenges for them to meet the six requisites of trade secrecy.

7. Admittedly, sustaining proprietary status for intangible assets is increasingly challenging…one reason is that as intellectual, structural, and relationship capital, ala intangible assets are integrated-applied by a company, i.e., in marketing, sales, production, etc., determining – unraveling their origins, functionality, and contributory role is not particularly difficult for the myriad global economic and competitive advantage adversaries.

8. That is not to infer company boards and management teams should have no prohibitions – consequences…to relinquishing company (developed, acquired, owned) intangible assets to unauthorized parties.

To the contrary…there is (a fiduciary) obligatory prudence for assuring unauthorized acquisition – misappropriation of (proprietary) intangibles be made as difficult as possible as a matter of policy, and hold violators accountable.

The responsibilities of intangible asset safeguard specialists…are now cross-functional and converge with reputation risk management, brand integrity, R&D, HR, IT security, IP counsel (audits, valuation), and accounting, etc. Those charged with intangible asset safeguard-protection, it’s now important to recognize that…

  • information assets are a dominant and valuable type – category of intangible asset.
  • protection/safeguard responsibilities should include factoring each assets’ fragility, stability, materiality, attractivity, and defensibility.

Ultimately…it is essential for intangible asset safeguard practices and demeanors to preserve, monitor, and sustain control, use, ownership, value, sources of revenue, and competitive advantages and efficiencies of key – contributory intangible assets, i.e., intellectual, structural, relationship, competitive, and data capital.

…the person who elects not to read has little or no advantage over the person who cannot read! (Variously attributed to Samuel Clemens, adapted by Michael D. Moberly)

Michael D. Moberly September 12, 2017 St. Louis [email protected] the ‘Business Intangible Asset Blog’ since May 2006, 650+ published blog posts, where one’s attention span, a businesses intangible assets, and solutions converge’.

Readers are invited to explore other blog posts, video, books, and position papers at https://kpstrat.com/blog

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