Business Power: Creating New Wealth from IP Assets

Chapter 14. Internal Operations to Leverage IP Assets

DR. STEVE HENNING

Most companies do not gather information about their IP internally that would lend itself to the external disclosure to the investment community. Neither do they have IP-related information available. And still more, they do not have the measures and metrics that might provide some clue to management or outsiders as to the value that they possess.

Key Points to Look For

• IP is the primary source of corporate earnings.

• Fewer than 3 percent of all patents are used to generate royalty income.

• Most companies do not (and perhaps do not know how to) report the value contributions of their IP and IA on their financial statements.

• The new corporate challenge is to the CEO and CFO, who should be active in developing the answers rather than leaving valuation metrics to the external forces that drive reporting and make the accounting rules.

• It is the corporate executive team that must take the lead in this activity, to drive this new business innovation that can result in de facto valuation standards before a legislative or regulatory solution is imposed.

Intangible Value

IP measurement and its reporting is of critical importance in the capital markets. The implications of SARBOX compliance and living with the standards and regulatory bodies that are monitoring the Taskforce work to establish value protocols and determinants set the ...