Are You Investing Blind into a Company?

Most investors invest with little or no knowledge about the company’s intellectual property. Two big reasons why is they don’t understand IP, and they don’t know the value of IP to the business.

Pharmaceuticals is an example of an IP intensive industry where investors are more savvy about IP, since patents are the life blood of these companies. But that is rapidly changing, as many industries are becoming IP intensive, such as media, telecom, automobiles, health care, and financial services to name a few.

Investing in a company without understanding the intellectual property is like sailing on the Titanic, unaware of the icebergs waiting to hit the ship. Some of these icebergs include potential infringement on other patents, failing to capitalize on licensing opportunities in other markets, or lacking an internal process to capture and protect IP from leaking out of the company.

Instead of investigating the IP value, investors focus on the financial numbers and completely miss the real value of the company. One of the big problems for investors is the lack of transparency when it comes to information about a company’s IP. It’s intangible and its value is often not seen on the balance sheet. The IP value is hidden, and investors only see the tangible form of the IP – such as the software, medical device or branded product.

The second issue is most business plans focus on the traditional tangible side of the business – marketing, distribution, production and sales. What’s missing is the IP data.

So how can investors make better decisions about the IP inside a company? The best ways are through an IP audit (due diligence), competitive patent analysis, and Freedom to Operate. These are key research tools to compile the needed data about the IP. Without them, critical information about a company’s IP is missing, and it leaves investors in the dark when it comes to understanding the potential risks, opportunities and potential value of the IP.

IP is the core asset of every business, and it’s the foundation of what creates current and future value. Most industries today are IP intensive, and protecting, managing and leveraging IP must be part of every company’s short and long-term business strategy. And it means investors must also be IP intensive when analyzing the value of a company to invest in. They must become educated about a company’s IP and how they are managing and using it to launch, build and grow their business and shareholder value.


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Mr. Brenner has over 30 years IP management and licensing experience with various industries including consumer products, food, entertainment, software,health technology, medical devices and digital media. He has led international licensing programs as both licensee and licensor, and through consulting projects focused on strategy and management, outbound / inbound licensing initiatives, and IP audits and due diligence.. He has developed and managed deals with Fortune 1000 companies including Universal Studios, Fox Interactive, Sony Pictures, Dow, Cargill, SmithKline Glaxo, Ranir, Coca Cola, Kellogg’s, Hasbro, Mattel, and others. He is a public speaker and published writer, and has taught classes at the university level. His speaking events have included UC Irvine, Tritech/SBDC, Irvine Chamber, Fast Start Studios, ICFO Investors Conference, San Diego Investment Conference, Westlaw Legal Center (NYC), National Speakers Association, and the Hong Kong FilmArt Expo. He has written several articles on licensing intellectual property which have appeared in the Licensing Journal, Intellectual Property Magazine, and License India.

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