A New Economy Focus: Intangibles

While economic news gets worse, and most of Europe heading for recession or already in it, IP practitioners may wonder what effect those dim outlooks have on their IP practice. Attorneys, like whatever economic season we are in, will flourish as usual, be it that the bankers and M&A gurus may have lesser times. An almost standard policy to a weak economy in an IP dense area like electronics, semicon and telcom is for market players to increase litigation over market share by using their patent portfolio. So litigators will no doubt have their uptime. If the market does not grow or even shrinks, the number of players remains the same, struggle for market share, or the loss of it, is often fought in court, as happened before in many economic downturns.

What about the IP brokers, sellers, IP marketers or monetizes? We tend to be optimistic both on the selling side as well as the buyers side. Why? The tendency to fight the IP market battles in court has an upside for both sellers as well as buyers of IP. Buyers will be those companies that have failed to identify IP as a strategic corporate goal and are now faced with increased litigation threats without being well placed to fight those battles. Sellers will benefit as well as they will be able to sell their strategic IP to those in need to defend themselves and to those that fear they may be further targets to avoid becoming a litigant.

Looking it from a non-litigious side, with depressed earnings, their might be, no there will be¸ a lot more pressure from CFO’s to the IP department heads to look more carefully into the company’s hidden values in existing IP. No longer can those companies afford to look at IP as merely a cost issue but rather an opportunity to create value out of their existing IP portfolio and hence become a P&L reporter.

It looks more and more likely that we may also enter a era where the interest and focus on intangibles will get renewed attention, where CEOs and CFOs can no longer afford to be ignorant of its IP potentials and where those companies that do have an active IP monetization strategy will prevail.

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