IP strategist: Slipping through your fingers

Much publicity is given to high-profile IP legal cases, but how often do we stop to think about the wider range of intangible assets – such as know-how, market data, reputation, contracts and so on – that have escaped or been lost? It could be argued that some companies manage only the tip of the iceberg of their intangible assets, with the majority hidden from management view, quietly melting away.

There are no good records of what has been overlooked, lost or inadvertently given away. It is quite natural for management to focus on what they know they have, rather than what they cannot readily see. Generally, companies believe that they already have processes in place to ensure the capture and management of their intangible assets, although often they are relying on the knowledge and behaviour of their employees to safeguard these. Yet while employees in some industries – particularly high-tech ones – are trained to foster good practices, employees in other industries are less aware of the importance of intangible assets and, as a result, significant amounts can be lost.

Those industries regarded as low-tech are most at risk – not only because they may not have a strong focus on intangible assets, but also because they are likely to have significant innovations which have kept customers returning over the years. Companies emerging from new economies to compete in a wider competitive market can be particularly vulnerable.

The interface between an intangible asset-savvy established company and one that is new to the game can lead to a significant unintended flow of assets from the new company to the established one. To manage this risk, companies need to establish and appreciate the full value of their intangible assets. This is simple to state, but surprisingly difficult to achieve for a mature workforce that believes it knows all there is to know about its products or services. Employees involved in technical roles can be those who pose the greatest risk – partly because they like talking technical to anyone who will listen and partly because they are often modest about their own knowledge and achievements, leading them to undervalue them and take no account of the years of investment in experience that has enabled something to appear simple. The undervaluing of intangible assets is one of the key reasons why leakage occurs – thus, changing employees’ mindsets so that all innovation is respected and valued accordingly is a key management task.

Company policy with respect to confidentiality, access to buildings, meetings with third parties and innovation disclosure all need to be publicised and practised, recognising that intangible asset leakage risk increases with any third-party interaction – whether formal or informal. For a company’s customers, there can be a perceived dilemma, with wanting to demonstrate capability on the one hand and with not wanting to give ideas away for nothing on the other. The desire to impress customers can lead to over-enthusiastic technical discussions which stray outside the planned agenda. There is also considerable risk from side conversations, where there is a tendency for people to try to impress the listener by releasing snippets of information.

Customer meetings need to be well managed with a clear agenda, limited selected attendance and well-controlled informal gatherings. Good records and formal meeting notes should be distributed to ensure that there is clarity about what was discussed and what actions were agreed. In particular, any sharing of information should record who gave the information, so that history cannot be rewritten after the event.

Complexity can arise when meetings are of a brain-storming type or where a joint innovation approach has been agreed. In such cases, planning and recording is of particular importance and each side should agree their contribution before the meeting. It can be helpful to break the problem down into agreed technical areas in order to minimise the possibility of disputes.

In a larger company, it is impossible for management to police all of the activities happening at the working level with third parties. It is therefore essential that the workforce is self-policing and aware of the importance of intangible assets. This is achieved primarily through education and training, with senior management acting as good role models. One way that we have seen senior management successfully raise the profile of intangible assets is to have divisional business plans that reference an intangible asset plan for each division, with this supporting commercial objectives and the company business plan, as well as the original divisional business plan. These plans should have clear ownership by a named individual and milestones which are visible to the people within the organisation.

For example, one element of the plan might be to create and maintain a register of the key intangible assets within the division. A small team can be formed to act as the owners, the members of which will then act to publicise the importance of intangible assets within the organisation. Another example relates to access control which might be visible to the whole workforce, customers and supplier base, protecting key assets inside controlled boundaries. An advanced case study is the Epicentre office block in Sweden, where employees can have a radio-frequency identification chip implanted under their skin, not only to access the building but also to facilitate lifestyle choices and even order coffee. While this may not be welcomed by all employees, it is just one example of how IP practices must progress in line with developing lifestyle, technology and data trends.

To become self-sustaining, it is critical to have an IP strategy that engages the whole workforce and emerging workplace technologies. Involving as many key people as possible in the implementation will create the self-policing environment required both to capture and retain intangible assets.