The World Intellectual Property Organisation (WIPO) recently estimated intangible assets – those parts of a business that can’t be held and which don’t exist in physical space – to be worth a staggering $5.9 trillion worldwide. This is equivalent to nearly a third of the total value of manufactured goods worldwide.
Protecting this value is essential then, but what are intangible assets – these things which are simultaneously so valuable and yet so ephemeral?
Intangible assets come in many forms. An intangible asset could for example be the value of the good will accumulated in your brand. Some of Marks & Clerk’s longest standing clients are Scotch Whisky producers. The reputation of Scotch globally is something it is hard to put a price on, but it is clear that beyond physical assets – such as distilleries and bottling facilities – Scotch producers also need to protect intangibles such as brand value and recipes. This is where intellectual property comes in.
Whether in the form of patents, trademarks, copyright, designs or a whole host of other, more exotic rights, intellectual property (IP) is key to protecting the value encoded in a business’ reputation and expertise.
As with all things however, IP needs to change with the times and keep pace with the forces reshaping the world we live in. Whether it’s globalisation necessitating the protection of IP in a diverse range of global territories or the kick back against globalisation (Brexit anyone?) meaning protection needs to be sought in territories previously covered as a block – IP needs to be central to business developing strategic responses to these challenges.
New and emerging technologies also pose a challenge to established ways of protecting IP.
3D printing for example potentially allows for the downloading and dispersed printing of protected designs – circumnavigating traditional barriers to counterfeiting such as border controls and technical expertise. While still a nascent technology, virtual and augmented reality also threaten traditional IP – will a patent covering an invention in the real world extend to cover a virtual version of that object in the virtual world for example?
These are just some of the questions posed by a changing world for businesses, innovators and entrepreneurs. And as ever more of the economy migrates from the analogue world to the digital (the digital economy in the US alone grew 5.6% per year in the 11 years to 2016and shows no signs of slowing) the value of intangibles will continue to grow. The app market here is illustrative. It is arguable that – beyond the hardware infrastructure that makes apps possible – this market is entirely intangible. Despite the intangibility however, the market has gone from a standing start in the relatively recent past to having a projected value of $6.3 trillion by 2021.
For new markets, made possible by new technologies, IP will remain a key business asset and investing in its protection is vital. The more businesses can align IP strategy and wider business strategy, the greater chance of success they will have.