As we start a new year it’s worthwhile to look back at the big picture. Over the last 40 years the West has undergone a massive economic inversion. In the 1975 tangible assets made up 85% of the value of the S&P500. In 2015 it was less than 20%. Corporate balance sheets, once cluttered with tangible assets such as property, plant and equipment have been inverted. Airlines don’t own aeroplanes anymore. Hotels don’t own their buildings. Car manufacturers now outsource production lines. Balance sheets today are dominated by intangible assets: brand, content, data, know how, confidential information, design, inventions, code – in short intellectual property.
This makes sense on a micro level too: take a company such as Apple or IBM and calculate the value of all their fixed assets (desks, chairs, lap tops and anything else you can physically touch) and it soon becomes clear that all the real value is somewhere else entirely. It can been seen in value chains as well: in a backstreet in Pakistan (or China or Indonesia) I can buy a t-shirt for $1. Sew on a Calvin Klein (or D&G or Chanel) label and it now costs $100. Same t-shirt. Where did the value come from? Brand (supported by content, design, innovation, marketing and distribution know how) – all intangible, all intellectual property).
This economic inversion – from heavy (tangible) to light (intangible) balance sheets – presents enormous opportunities and risks for companies today. From R&D to M&A, from branding to finance, every aspect of every business is driven by intangible assets. Regardless of the industry you are in or the product or service you produce, intangible assets have a critical impact on financial performance.
At the beginning of a new year we often turn to what drives business success. This year intangible assets should be at the top of your agenda.
Video: Don’t let acquired patents sink the ship By David Magee
Uncertainty in the patents market means companies with substantial holdings of acquired patents will have to test the valuations of these intangible assets.
Staff spotlight – Paul Davies, Head of Intellectual Property
One of EverEdge’s most experienced intellectual property strategists Paul’s expertise spans numerous countries and a multiplicity of industries. He has worked with hundreds of companies, from technology start-ups to multi-billion dollar US multi-nationals, developing and implementing strategies for intellectual property, whether held in registered forms such as patents or unregistered forms such as trade secrets and know how.
What’s your priority; coffee or intangible assets? It’s a strange reality but most businesses spend more on coffee than they do on their intellectual property strategy. Unless you’re running a café that’s a problem as failing to understand intellectual property is going to be a rate-limiter on future growth.
Calling for Patent Attorneys in the US and NZ
EverEdge is growing and we are searching for Patent Attorneys and Intellectual Property Strategy Specialists. If you know talented people who may be interested in an exciting career with a company that is going places, please ask them to contact us.
Client engagement spotlight: Valuing a company for a nine figure capital raise EverEdge was engaged to value a company in conjunction with a nine figure capital raise.
“Intellectual property valuation is a tricky topic and it was amazing to see EverEdge’s approach; they went beyond the financials to examine the value of the intangible assets, providing a fair and defendable valuation for the business. I found them to be extremely professional, diligent, strategic and transparent with their assessment.” Company CEO
2016 started with a flurry of activity as EverEdge’s London team engaged with the British Venture Capital Association and hosted the Evolution Business Sales Partners event. Dr Chris Donegan presented on the impact of intangible assets on price formation in business sales. This was followed by our first industry focus event of the year on the roleand future of IP in Gaming and Media. A distinguished panel included Star Wars and Marvel gaming strategist Tanya Laird whose “Digital Jam” sessions have been followed by 14 million listeners, Paul Nunn, CEO of Outfit 7 whose Talking Tom and Friends apps recently passed 3.2 billion downloads, and Simon Flamank who led the turnaround of Handmade Films and serves on the BAFTA judges panel. Over 30 gaming company CEO’s attended along with guests from Film, TV and Music. Client engagements in Publishing, Telecommunications and Fuel Cells rounded out a productive month.
EverEdge’s New Zealand office has returned from the southern hemisphere summer holiday period with a strong start to the year. We welcome two new Senior Strategists, Richard Barnett and Alex Safanasyev. Richard comes to us with substantial experience in business development for technology companies, while Alex has worked as a private banker at Credit Suisse in Vienna and was a founding member of two startups in Russia and Spain. We completed work on a major intangible asset valuation out of Singapore and the client was ecstatic saying “EverEdge were extremely professional, diligent, strategic and transparent with their assessment. The EverEdge team took the initiative to learn about my business and provided valuable recommendations to protect the brand going forward. It was a very rewarding experience and I would not hesitate to recommend the EverEdge team to anyone that requires their expertise.”
USA EverEdge was a major sponsor of the DealMakers Forum in December last year. The New York based event attracted over 200 of the world’s leading intellectual property-focused investors, executives and advisors. EverEdge delivered an investor workshop focusing on investment in intellectual property and intangible assets and shared knowledge and experience via several thought provoking panels.
The key takeaway from the Forum was the importance of investing in quality IP, despite current market conditions. As a consequence of the Forum EverEdge are now engaging with clients in six different cities across the US.
A positive start to the year sees EverEdge working with a large tertiary institution reviewing their intellectual property portfolio to identify potential commercialisation opportunities. Also on schedule is an engagement by a national financial institution to deliver educational sessions on the identification and monetisation of their intangible assets and the creation of products and services around intangi
bles generated by their clients.
In the news
Texas jury orders Apple to pay $625.6 million in patent case
A federal jury in East Texas has ordered Apple to pay $625.6 million after finding that Apple services like FaceTime and iMessage infringed on technology patents held by Nevada patent-holding company VirnetX.
Bowie: intellectual property visionary
David Bowie was that rare kind of rock star: You didn’t have to like his music to admire him. Bowie was a business visionary like the ones who shaped Silicon Valley who just didn’t see the point of building companies: He was his own greatest product.
Yosemite fails to secure its brand
The names of some of Yosemite National Park’s most cherished and recognizable sites are changing, from the regal Ahwahnee Hotel to the tent-city Curry Village — the result of a trademark battle that could lead to a multimillion-dollar payout to the park’s ousted concessionaire.
El Chapo’s family tried to trademark his name for branded merchandise
The family of recaptured cartel kingpin Joaquin “El Chapo” Guzman tried to trademark his name for the purposes of producing merchandise including clothing, watches, walking canes and even Christmas tree ornaments.
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