New IAM survey:  how should your IP department be measured?

How should IP departments (and the chief IP officers who run them) be measured?  IPVW hears more and more about the belief that financial data should be the primary method to demonstrate the value of the IP assets--and that CIPO’s should be subject to P&L responsibilities, just like other business units.  Do you agree?

IAM reporter Sara-Jayne Clover interviewed senior IP officers at June’s Intellectual Property Business Congress.  She found a wider diversity of opinion than you might expect in her new summary, IP P&L, published this week.
She asked CIPOs three familiar questions:

• should IP be considered a profit or a cost center?
• should IP be measured only by the revenue it generates?
• does its measurement really matter so long as CIPO’s help companies achieve their goals?

IPVW recognizes more companies are adopting IP-based business models. Using correct metrics that fit a company’s mission is the key.  Otherwise it’s likely that a company’s intangible assets will be undervalued, disregarded or not utilized as effectively or profitably as they could.

IPVW joins advocates such as Ron Laurie and Rob Sterne who point out CIPOs need to be visionary to facilitate a company’s transition from:

• a mentality in which IP is cast as a cost center
• to a model wherein IP represents a growth and profit center

What’s your opinion about leadership and metrics in IP?  Let us know.

Website ‘takedown’ products join the copyright infringement loss arsenal …

IPVW’s  best estimate on losses incurred annually from copyright infringement is $30-35 billion annually. These mostly web-originated offenses collectively affect the music, film, literature, and photography sectors.  (Each sector tends to keep its own loss score which makes it difficult to identify a single authoritative source that provides unembellished and unbiased tallies.)

New technologies and legal strategies are appearing almost daily to counter these losses.  For example: the San Diego based Copyright Enforcement Group is launching a monitoring product touted as a ‘takedown service’ to deter copyright infringement.  The product, appropriately called WWW Takedown, will provide monitoring and validation processes covering all types of web-based content, i.e., audio, video, logo, image, trademark and text.

Enforcement is sadly going to be part of the equation no matter how much new technology appears. A key component is estimating damages.  One of several relevant products BVR offers is Calculating Loss Profits in IP and Infringement Cases.


Can you move up the list of most reputable companies?

The Reputation Institute and Global RepTrak Pulse recently released their findings of the world’s 100 most reputable multinational companies.  Forty eight thousand consumers across fifteen markets participated in the study. “Reputation has become an increasingly critical intangible asset,” says Dr. Charles Fombrun, now Chairman of the Reputation Institute.

Companies are scored on:

• emotional indicators, i.e., trust, esteem, admiration, and good feeling
• dimensions of reputation, i.e., perceptions of the corporation’s workplace, governance, citizenship, products, services, innovation, financial performance, and leadership.

Google, Apple, Disney, BMW, and Lego “won.” (You can view the entire list at the Reputation Institute press release.)

All this of course, begs the question, is your company operating effectively in the reputation economy?  This and other relevant questions will be addressed in an upcoming BVR webinar featuring Dr. Nir Kossovsky titled Reputation: Business Case For IP Professionals.

Nortel and Motorola are in the news, but where does IP really fit in the “recovery?”

In light of the recent multi-billion dollar Nortel patent auction followed by Google’s purchase of Motorola Mobility’s patents it would seem easy to surmise the patent industry is rocketing to new financial heights.  But, ironically, few IP strategists have offered views about if or how the global economic downturn will affect the patent industry.

IPVW looked back for answers to these questions and found several noteworthy opinions:

Tyron Stading, founder and CTO of Innography, offered one perspective during the early stages of the economic downturn. “First, the good news” Stading says.  “Historically, in recessions US patent filings and IP litigation markets experience growth because when money becomes tight, companies look for alternatives to increase their cash flow”, i.e.,

• product innovation
• litigation

 “The bad news,” Stading says, “is companies may be facing increasing litigation costs as they defend their products and market positions.”

David Brown, now President, Thompson Reuters IP Solutions, said, when asked by IAM at the 2008 IP Summit “if we move from a recession into a depression, then all bets are off.” 

Recessions do not tend to alter long-term corporate strategic thinking on investments in R&D and protecting innovations.  But, if the gloom becomes semi-permanent, that could change.  There has not been a global depression since the 1930s, so nobody really knows how companies will react.  It could be that they will carry on investing, but with protracted revenue falls and few indications that things could change, it could well be that entire strategies will have to be rethought.

A final noteworthy perspective came from Dave DeWalt, then McAfee’s President and CEO.  He was presenting the company’s report on global IP to the Davos World Economic Forum in 2009.  He stated:

as we face one of the worst recessions, protecting a company’s critical information assets like IP has never been more important.  A single breach can cause irreparable financial damage to a company’s reputation, its share price and customer confidence.  It’s a risk companies can’t afford in the current environment.

IPVW readers will recognize the relevance of these statements during this protracted period of global economic downturn as businesses—and IP leaders are being squeezed by uncertainty in the markets (no matter what Nortel and Motorola say).

Upcoming Events

Valuing Sports Franchises
September 15, 2011 10:00am - 11:40am PT
Featuring: Drew Dorweiler

Analysis of the Intangible Drivers of Company Value
September 20, 2011 10:00am - 11:15am PT Featuring: Mary Adams

Patent Damages: The Entire Market Value Rule
September 22, 2011 10:00am - 11:40am PT Featuring: Craig Jacobson and Stephen Lieb

Reputation: Business
Case For IP Professionals
October 13, 2011
10:00am - 11:15am PT Featuring: Dr. Nir Kossovsky

Life and Death of Businesses: Firm Mortality and Business Valuation
October 26, 2011
10:00am - 11:15am PT Featuring: James Morris

Advanced Workshop on Valuation Issues Under ASC 805 and Business Combinations
November 3, 2011
10:00am - 2:00pm PT Featuring: Mark Zyla