tag:blogger.com,1999:blog-5574479.post3292324119782690975..comments2024-03-29T12:23:31.959+00:00Comments on The IPKat: IP as an Asset: Really?Verónica Rodríguez Arguijohttp://www.blogger.com/profile/05763207846940036921noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-5574479.post-39786129168440732172013-11-13T15:36:30.121+00:002013-11-13T15:36:30.121+00:00Anonymous @ 14:36,
Is that a real question?Anonymous @ 14:36,<br /><br />Is that a real question?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-76934409708731334532013-11-13T14:36:44.572+00:002013-11-13T14:36:44.572+00:00Are inventions worth anything?Are inventions worth anything?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-81160533539930039732013-11-11T04:11:17.897+00:002013-11-11T04:11:17.897+00:00Intellectual Property is a business asset in the s...Intellectual Property is a business asset in the same way that a company's R&D group or sales and marketing group are business assets. They all contribute to cash flow. However, it is difficult to identify a market value for any of them separated from the rest of the business. <br /><br />In the case of IP, it contributes to cash flow (hopefully) by increasing the gross profit of a product, by increasing price and/or market share. Yet I agree it is difficult to put a monetary value on IP. <br /><br />I suppose one model would ask, if the company had to take a license on its IP, what royalty rate would it pay? Certainly only so much that it can still make a decent profit on sales.<br /><br />Some determination of value is important, because it informs you how much you should invest in developing the asset.<br /><br />But I would like to hear other opinions, as I think the question is important and the answer opaque.Johnhttps://www.blogger.com/profile/10473021947765406998noreply@blogger.comtag:blogger.com,1999:blog-5574479.post-21461774601682159102013-11-08T12:59:55.411+00:002013-11-08T12:59:55.411+00:00"and IP liabilities arising from third party ..."<i>and IP liabilities arising from third party IP rights must be assessed</i>"<br /><br />How would you make such an assessment?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-27874772861376103342013-11-07T19:48:51.511+00:002013-11-07T19:48:51.511+00:00I agree with the post. I would add that the focus ...I agree with the post. I would add that the focus on IP assets reflects a one-eyed vision, since the balance sheet of a business is made up of assets and liabilities, and IP liabilities arising from third party IP rights must be assessed.<br />Another comment is that all this emphasis on valuation and commercialization of IP rights serves the interests of lawyers and accountants but certainly the interests of businesses. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-58697234291744293882013-10-31T11:24:32.778+00:002013-10-31T11:24:32.778+00:00Readers of this blog may be interested in the summ...Readers of this blog may be interested in the summary report "Banking on IP" commissioned by the IPO. It appears as though the banking sector are beginning to see IP as a new asset class in some circumstances - <br />http://www.ipo.gov.uk/ipresearch-bankingip-sum-281013.pdfIan Goodyerhttps://www.blogger.com/profile/00250161691890224407noreply@blogger.comtag:blogger.com,1999:blog-5574479.post-45833304083720157542013-10-28T10:05:28.400+00:002013-10-28T10:05:28.400+00:00I think the issue is in the English language. A f...I think the issue is in the English language. A financial "asset" is not the same as something being an "asset" to the business.<br /><br />It is a fallacy and to import characteristics shows a logical failing which causes difficulties.<br /><br />Perhaps if we were to move backwards from the correct handling of the valuation, treatment and other characteristics we could associate it in an inductive way with some other aspect of the business... Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-16074237102821120932013-10-28T01:09:14.337+00:002013-10-28T01:09:14.337+00:00Excellent post.
I am in complete agreement wit...Excellent post. <br /> <br />I am in complete agreement with you on the issue of IP valuation, having listened to much talk and having read several publications on this subject it is clear that many pundits and so called ‘experts’ in this area have a fundamentally flawed understanding of what makes IP valuable.<br /> <br />As with any intangible property, IP valuation if often a guess often disguised in impressive sounding rhetoric. So why should we be surprised when the Kodak portfolio is grossly overvalued when, for example, art experts often get the value of paintings wrong?<br /> <br />Many valuation models presume a steady state environment yet any IP practitioner knows that, for example a patent, can become worthless overnight either because a successful legal challenge has rendered it invalid, or simply because the owner forgot to pay his fees.<br /> <br /> <br />Part of the problem with the sudden exuberance over IP as an asset comes from an incomplete understanding of the fundamental interaction between business, the market and technological environment and the IP itself. The business people may understand the business aspects that make a piece of IP valuable including the things one can do to enhance the value of the IP by, inter alia, successfully building a brand, licensing the IP, etc., but perhaps not the legal nuances. Similarly, while the lawyers understand the legal aspects, do they really understand the business or environmental ones?<br /> <br />And if the so-called experts have an incomplete understanding, what of the politicians who will make policy decisions based on the input of these ‘experts’?<br /> <br />The problem with the current state of irrational exuberance over IP is that in their rush to, for instance, embrace IP trading – presumably to encourage creation - governments may fail to give due consideration of the consequences. Then, when governments later get deluged by complaints about patent trolls, copyright trolls, trademark bullies stifling creation and innovation, will they say ‘how did this happen?’<br /> Ron Yunoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-5866648777040120722013-10-27T13:06:45.717+00:002013-10-27T13:06:45.717+00:00Overall, the negative tone of the article left a n...Overall, the negative tone of the article left a negative taste in my mouth - not of IP as an asset, but rather of the author's views regarding IP.<br /><br />I am left with the distinct impression that the author is not a fan of such personal property rights.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-15999530994377870562013-10-26T17:17:03.059+01:002013-10-26T17:17:03.059+01:00I don't subscribe to Neil's negative view ...I don't subscribe to Neil's negative view about the tradeability of copyright. Whole industries (motion pictures, records, book publishing to name but three) could not exist in their current form without an IP portfolio, so clearly in some sectors the book value of IP can be measured just as accurately as other income streams. An even more specific example might be picture agencies such as Getty, whose sole function is to trade in licences for copyright works. Remove copyright works from their inventory and they have no business. <br />The fact valuing IP can be problematic does not mean it shouldn't be classed as asset. Many more tangible assets such a share certificates or real estate will have their value determined by the vicissitudes of the market. "The value of shares may go down as well as up, and past performance is not guide to future performance" we are warned. <br />If IP really has little value or purpose as an asset, why does Hollywood keep trying to extend the copyright term?Andy Jnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-67620574374841262992013-10-26T14:24:53.667+01:002013-10-26T14:24:53.667+01:00Agreed, good article Neil.
For many companies the...Agreed, good article Neil.<br /><br />For many companies the intangible asset is more than the IP per se. For instance it may be a pharmaceutical drug in development or a collection of song recordings. These intangible assets should not be confused with units of production; the asset is the blueprint or package of information and rights that enable units to be made.<br /><br />To attempt an imperfect analogy: the IP protects those assets like a barbed-wire fence protects access to land. The fence is an important feature when enjoying exclusive access to the land. But the most important part of the asset is the land and not the fence.<br /><br />This notion breaks down if the IP is traded on its own, disconnected from the underlying asset. Much IP has a very precarious value, if it has a value at all, when viewed on its own.Markhttp://www.ipdraughts.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-64189158836056902522013-10-25T18:08:47.255+01:002013-10-25T18:08:47.255+01:00I have a copy of the British General Electric Comp...I have a copy of the British General Electric Company's balance sheet for 1916 in which the value of its IP is given as one guinea.<br /><br />Perhaps that fact that it was the middle of the first world war had something to do with it, but even allowing for inflation, it seems rather low for a company that was then valued at about two million pounds and which has acquired the UK rights for the tungsten filament lamp which subsequently generated a substantial sum in licence revenue.Ronnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-17805078016983359122013-10-25T17:01:18.691+01:002013-10-25T17:01:18.691+01:00Perhaps there is a danger in talking about "I...Perhaps there is a danger in talking about "IP" the way one talks about other asset classes, e.g. cash, plant, commodity, bond, equity, debt, property. One can look at each conventional asset class and broadly describe its attributes in comparison to other asset classes, in terms of risk and return, in terms of liquidity, in terms of valuation, in terms of depreciation, and the like. One can do this because, within each class, the members of the class behave broadly alike, and accountants can thus proxy the behaviours of a specific asset (a barrel of a certain oil, a particular car, a share in a certain business, a particular plot of land, a bond obligation to pay a certain value at a certain time) with the behaviours of the class to which that asset belongs. The process of abstaction is both possible and useful. However, as the article demonstrates, IP assets are not at all all alike, and it is therefore very hard to talk, except in the most vague terms, of the asset class properties of IP assets. Accordingly, even if a certain amount of abstraction is possible for the purposes of discussion, it is rarely useful to lump all the various types of right which fall under the heading "IP" in to single asset class, or to discuss them in the same breath.<br /><br />IP already is becoming a catch-all term for the components of a business which give it value, which are not financial obligations, and which are not tangible. Such an "everything-but" approach only reminds us that while IP is a nice brand for us as practitioners to use to sell our services, the natures of the rights in which we deal are very different. We should not mislead those who depend on our advice by hiding their peculiarities under an "IP asset" umbrella.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-49203478150103411922013-10-25T15:02:22.349+01:002013-10-25T15:02:22.349+01:00Interesting article... YES IP is the single most v...Interesting article... YES IP is the single most valuable commodity on this planet.<br /><br />And there are changes coming cat friends - the issue is how much pain the world needs to go through to get right with me over the GeoSpatial (Location Based Controls Fraud) now in the US Federal Courts and also filed for only one of many fraud losses with the IRS (1.5B for 2012 calendar for only one small area of infringement).<br /><br />How I know this is I am the party who filed the fraud loss with IRS and legally owns control of this IP.<br /><br />ToddAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-88355112742524131502013-10-25T14:46:54.982+01:002013-10-25T14:46:54.982+01:00I am also ancient, and can remember a brand being ...I am also ancient, and can remember a brand being destroyed by a health scare - hero to zero within a week. The business folded, but an astute operator purchased the residue for peanuts, and recovered the reputation in 9 months (the effect of baby related retail business - one that I would be in if restarting a career)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5574479.post-26227740043011540412013-10-25T14:01:58.138+01:002013-10-25T14:01:58.138+01:00I think a lot is gained by considering IP as an as...I think a lot is gained by considering IP as an asset. A business that has IP rights has to make decisions on how much resource will go into creating and maintaining each IP right, and so some type of valuation is needed, even if its complex. I think the system as a whole is adapting to the new prominence of IP rights as new business models are created around evaluating, commercialising and trading IP. I think modern-day data-rich fast-changing business environments will cope with IP rights and the inherent uncertainties they have.Suleman Alihttps://www.blogger.com/profile/18171832789491858471noreply@blogger.comtag:blogger.com,1999:blog-5574479.post-18813783585608586072013-10-25T13:26:16.550+01:002013-10-25T13:26:16.550+01:00Good article, Neil. I also am so ancient that I ca...Good article, Neil. I also am so ancient that I can remember when patents were things with pretty seals that you got, well, because you could and they were good for something, even if we weren't exactly sure what. The commoditisation of IP has now provided us with three camps (a) those who regard IP as the saviour of all personkind, (b) those who regard IP as the great curse of personkind, and (c) the puzzled onlookers in the middle (i.e., most of us). Unfortunately, as they say oop North, lad, where there's muck, there's brass..Anonymousnoreply@blogger.com