Intellectual assets include traditional intellectual property rights (patents, trademarks and designs) as well as unregistered rights like copyright, trade secrets, contractual arrangements with clients, suppliers and staff, databases, customer lists, and the equity in a company’s brand.
Human capital is also an important part of a company’s intellectual asset portfolio that is often untapped and overlooked when it comes to valuing that innovation effort; experience, knowledge, skills, creativity, ideas and innovation all form a large part of a company’s value. Businesses are now working in a knowledge-based economy, so it’s only natural that a lot of a company’s value could be locked up in these types of assets.
So how do you extract maximum value from these assets? Intellectual asset management (IAM) is a relatively new concept in Australia, and is a philosophy for looking at a company’s intellectual assets to identify, unlock and derive value from them. It also encourages the company to think strategically about how it can use those assets for commercial benefit.
Bringing business strategy and IP together
Here’s a good example of how intellectual asset management can work:
A company’s technology has been adopted worldwide. It now needs a strategically aligned international patenting program, a structure to identify future market opportunities and regular scoping and analysis of competitor activity. Intellectual asset management helps it to do all these things and more in a systematised way, establishing freedom to operate, mapping out future technology directions as well as identifying potential partners.
Each of these activities is linked to an overarching business strategy: the company understands its competitive landscape and can therefore identify opportunities faster than its competition. Its leaders also understand their own capacity and the resources that would be needed to see opportunities through from development to commercialisation, at the same time viewing all these options through the lens of the company’s overall business strategy. As a result, the company’s international success has been demonstrably driven by dedicated management of its intellectual assets.
The benefits for small business
Small-to-medium enterprises are often the ones most at risk of under-leveraging their intellectual assets, because they don’t allocate the resources to make it a focus for their business. But it’s these businesses that could drive more value by broadening their perspective.
Moreover, SMEs don’t often have the deep pockets necessary for protecting innovation with traditional IP (like patents and trademarks), so the benefits of finding other ways to manage that innovation are even greater. Investment in this type of intellectual asset management strategy could go a long way in protecting and getting the most out of their innovation.
[Next: The forgotten asset – people]
The forgotten asset: people
For SMEs, people can be your greatest asset. Businesses are often run as lean machines, depending greatly on the knowledge and skills of a precious few. But how do you tap into the ideas of your staff? And what happens to the knowledge and expertise when a staff member leaves?
Here a few ways that intellectual asset management could help capture that knowledge:
- Creating regular opportunities for information exchange
- Developing processes and policies to capture and store that information
- Encouraging innovation in employees, to ensure any knowledge or great ideas that they’re storing ‘up there’ actually hits a piece of paper and is documented, before they decide to move on and take their ideas with them.
Where to start
While most organisations have detailed business practices in place to generate returns on their tangible assets and financial capital, the management of intangibles presents particular challenges. Who should be responsible? What structures and processes are needed? What additional capabilities will this require? It’s understandably difficult to know where to start.
As a starting point, it’s a good idea to have a register of all intellectual assets that are important to your business. To create this register, companies should consider conducting an audit of their current assets.
Know your competitive advantage
Regardless of industry, business type or size, competitive advantage helps maintain a successful company. To develop that advantage, you need to know what you do, how you do it and where your strengths and weaknesses are. Sound simple? Of course it does. It’s what you do for most of your business: service and product offerings, customer service and service delivery. But what about intellectual assets?
It’s similar to planting a number of trees but not knowing the variety. If you don’t know what fruit each tree will bear, you don’t know what the fruit can be used for, or who might be interested in buying or making use of it. It’s impossible to pick a target market if you aren’t sure what you have to offer.
Auditing, that is, documenting, analysing and assessing the value of your intellectual assets on a regular basis, is going to become an increasingly important edge over competitors. Businesses should ask themselves: what expertise, knowledge, system, product, brand, agreement or procedure do I have, that my competitors don’t? The answer gives you a starting point for identifying those assets most in need of protection, and those which could be leveraged to create more value for your business.
–Karen Sinclair is principal at Watermark, patent and trade marks attorneys and IP lawyers.
Online: www.watermark.com.au
