Saturday, January 24, 2009

Intellectual Property Management and Valuing Intangible Assets

A company's intellectual property, intangibles, and know how constitute accessible, frequently valuable, and potentially monetizeable assets!

There is no other time in modern business management history when such significant and increasing percentages (upwards of 75+%) of company value, sources of revenue, future sustainability, and earnings potential are so deeply rooted-embedded in intellectual properties, intangible assets, proprietary know how, and business processes that deliver competitive advantages and market position.

A company's intellectual property, intangibles, and know how constitute accessible, frequently valuable, and potentially monetizeable assets that can be utilized - leveraged to genuinely contribute to company's sustainability, profitability, and standing. There remain however skeptical 'bricks and mortar' (tangible asset) thinkers and managers that discount, dismiss, and/or subordinate intangible assets as being ineffective insofar as constituting viable - strategic pathways to stability, sustainability, and profitability. Reasons cited for such skepticism include, for example, intangible assets (a.) don't appear on balance sheets, (b.) lack physicality, and/or (c.) require departure from conventional 'mba' precepts for accounting and management.

Devoting time to acquiring skill sets to better recognize and utilize (i.e., practice effective stewardship, oversight, and management) of a company's intangible assets is a worthy exercise that warrants the attention of most every business decision maker particularly to be used as another tool - strategy to help weather this financial crisis - recession.

In the mid-to-late 1990's, the global business community began experiencing a significant economic shift in terms of changing the dominant sources of company value, revenue, sustainability, and future wealth creation. That is, company value clearly began to emanate from, as it does today, only in steadily rising percentages, intangible assets, i.e., intellectual property, proprietary know how, brand, goodwill, reputation, etc., rather than tangible (physical) assets such as property, equipment, and buildings, etc.

This economic shift (from tangible to intangible assets) has been validated by numerous studies produced by Brookings Institution, NYU School of Economics, KPMG, PricewaterhouseCoopers, and The Economist Intelligence Unit. This economic shift requires re-framing how companies and their decision makers approach the stewardship, oversight, and management of those assets with the objective being to (a.) sustain control, use, ownership, and value of those assets, and (b.) position those assets to sustain, maximize and/or extract value.

Unfortunately, the management, stewardship, and oversight of a company's intellectual property and intangible assets often fall under decision makers', boards', and director and officers' radar, that is, intangibles and intellectual property often go unrecognized, undervalued or neglected due in part to:

• their lack of physicality, i.e., the assets themselves can't necessarily be seen or touched

• their unconventional monetary nature

• the presumed necessity to 'outsource' those responsibilities to accounting units and intellectual property counsel

• the assets' orientation toward future (strategic) utilization, monetization, leveraging, positioning, etc. (Centre for Business Performance, Cranfield School of Management)

Instead, decision makers with managerial oversight and stewardship responsibilities of intellectual properties and intangible assets should treat them:

• as business (financial) decisions and fiduciary responsibilities supported, but not dominated by, legal (patent) processes.

• in revenue conversion contexts

Mr. Moberly has conducted numerous national presentations, seminars, and training for business organizations and professional associations on a range of issues related to helping companies sustain control, use, ownership, and value of their intellectual property, intangible assets, proprietary information and competitive advantages.

A professor at Southern Illinois University (1982-2002) Mike brings strong domestic and international experiences, operational insights, research regimen, and concise/objective writing skills to benefit his clients. As a researcher, analyst, strategist, educator, and practitioner, Mike offers services to various business venues and transactions in which intellectual property and intangible assets are in play. Mike has a BA and MPA degree from Indiana University. He holds leadership positions in the American Society for Industrial Security International and the Intangible Asset Finance Society among others.

Visit Mr. Moberly's website at and learn more about intellectual property management.

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