What in the world goes on over there

I wanted to take this opportunity share the growth of Metis Partners with you. As we expand our business internationally, Europe is a frontier we have already begun to develop but the really big opportunity is Na Na Na Na Na Na America!!!

Therefore I am delighted to tell you we have established a partnership with a new Metis Associate, Paul Kallmes who is based on the West Coast of the USA. You can read more about him on our website but I thought it would be better to hear from him first hand on “What goes on over there?”……- Stephen Robertson


INTRODUCTION: The management of intangible assets is a complex task in any environment but the business climate in the US can make it seem well-nigh un-navigable to those not familiar with practices over there. Given the expense and time-frames required to build out intangible assets portfolios, it’s no wonder that there is confusion over the best approach to take. Among the many confounding factors facing foreign companies that may want to use intangible asset portfolios to protect their positions in American markets (and many domestic ones already in it) are a badly backed-up and often inefficient patent office, a highly litigious mindset in American executives, little patience for the long latency periods in IP, and a general lack of true understanding of the strategic development and deployment of intangible assets.

Nevertheless, any company that wants to do business in the US must at least consider the role that IP may play in their markets and be prepared to act accordingly. It is easy to waste significant amounts of time and money and it is the stated intent of these postings to help people understand some of the primary considerations of IP development and deployment in the US. Mixing experience, opinion, speculation, data, and maybe even some humor, we hope to give people a sense of what they might encounter in IP-related issues when doing business in the US. We assume that anyone reading this knows at least something about IP and its management but even if not, hopefully any reader can glean something useful from it.

IP in the US: One hears a good deal of talk about intellectual property and its value as a strategic asset, especially in light of recent high-profile patent battles and acquisitions by the likes of Apple and Google. In general, however, IP is not treated as strategically as most other assets, in part because of the reasons listed above. At the risk of offending some of my American colleagues, I think it is safe to say that most people don’t really understand intangible assets and their management. This can lead to a reduced focus on building IP assets and extracting value from them. Often it is only when confronted with some kind of immediate risk, such as a lawsuit or infringement by a competitor that IP jumps to the forefront of people’s attention but at that point it’s a little late in the game.

It is understandable that other concerns will push unfamiliar activities like IP management out of the way, especially in young companies where there are always far more tasks to do than people to do them, but IP is not one of those things that can’t generally be left for attention later on. Patent landscapes can be altered at any time for reasons – patent expiration, new issuance, M&A activities, USPTO rule changes, legal judgments – and it is not a good idea to be caught out. A failure to protect IP early and properly can leave a company at a disadvantage that may not be possible to overcome. If IP really is a strategic asset, then management needs to treat it as such.

IP as a repository of value: Recent trends in business have opened new avenues for value to be created through IP. For example, the rise of an auction model around patents has people thinking differently about the value that IP can contain. In addition to the established methods such as lawsuits and licensing, IP can be used as collateral and in debt restructuring. The long lifetimes of intangible assets allow for different plans to realise returns and should, in theory at any rate, act as a counterbalance to the shorter-term thinking that dominates most aspects of business. Those companies that invest the time and resources to identify and protect their intangible assets early on may create a sustainable competitive advantage over time. In fact a well-built portfolio can operate as a separate business unit, linked to but decoupled from operations, a tactic that sends a strong message about the IP owner’s belief in the strength of the asset (not to mention taking advantage of favorable tax regimes). The recent high-profile battles over telecom patent portfolios shows that when a company wants to make a quick inroad into a space, acquiring lots of patents is clearly a high priority. While not every company has the kind of assets that an Apple or a Google does, there is always room for this kind of thinking for companies in virtually any technology or market space.

Summary: Whether or not the management of a company believes that there is value in their intangible assets, it is inarguable that they ignore their IP at their peril. And not just at the outset: IP demands continuous attention, much the same as a company tracks, say, its cash flow. The risks, benefits, costs and liabilities associated with proper IP management will be discussed in future posts; for the moment, suffice it to say that IP is the next frontier in value creation and realization, and that any company planning to make a mark in the US needs to consider its own IP needs. Failure to do so is to add additional layers of risk that no company needs.

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