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IP Branding: Adding Value to a Business

By Stefan Miller, Ph.D.
March 27, 2007
As the U.S. economy begins to switch from an industrial model to a knowledge-based one, business owners must adapt their traditional means for conveying the value of their assets. Intellectual property ('IP') is an intangible asset often overlooked by investors in assessing the value of a business, because companies fail to provide a useful metric for its value. IP branding is a business strategy that educates potential investors, licensees, and even competitors about the quantifiable worth of a company's intangible assets such as patents and trademarks. Although branding has historically functioned in the traditional trademark sense to identify tangible products and services and to distinguish them from competitors, thereby giving the owner of the brand market power, it applies equally to other forms of IP. In a nutshell, the value of a firm or business is equal to not only the inherent value of its IP but also the value added from the successful branding of a company's intangible assets. This article presents four key steps, with a focus on patents and trademarks, toward adding an IP branding strategy to an existing business model.

Step One: Identify and Protect IP Assets

This foundational step is the prerequisite for a company incorporating any form of knowledge-based assets into its operations. If a company cannot identify the intangible assets that it relies upon, it will not be able to value them and communicate this value to others. Further, once identified, these assets must be protected either as trade secrets, patents, copyrights, or trademarks. As such, a company should have in place a business unit that can control and direct the flow of intangible assets from separate units. Such a unit should also coordinate and communicate with the financial, marketing, and research arms of the company. This level of integration allows a central structure in the business to adequately compile the needed information about these intangible assets and to then direct an IP branding strategy to add further value to these assets. Having an integrated unit also ensures that a discrete IP strategy is not only identified but also instituted. In identifying a company's IP, such a unit should not only identify the technologies that form the core of products or service lines, but also identify those of the company's competitors. Such due diligence should also include identifying the means by which a company's competitors brand their products, the trademarks that they use, the patents that they possess, and the impression such branding has had on the market.

Step Two: Quantify the Value of IP Assets

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