Intangible business assets currently account for 70 to 85
per cent of the total value of business assets. With such
significant value, does your business have a strategy to
protect and enhance its intangible assets? If not, and you
don't know where to start, here are a few tips and
Write down an intellectual property (IP)
strategy, even if it is a few bullet points on a
single page. This would include strategies around things such
as brand, information (including personal and confidential
information) and developments. Ideally, any material
intangible asset in your organization should be covered by
Align your IP strategy with your business plan
and your business processes. It is amazing how often
they don't line up. A key part of this alignment is
getting senior level buy-in.
Inventory the types of intangible assets you
have (e.g., existing and proposed products, brands,
customer lists, processes and software). You'll be
surprised at what you find.
When you acquire intangible assets, make sure that you
(a) get enough rights to use the assets,
even if your business model changes (e.g., privacy consents,
scope of use and affiliates); and (b) don't
take on more risks than you intend to.
Communicate your IP strategy to your
people. Not once, but on a regular basis. You need
to create a culture where intangible assets are valued.
Training is often more valuable than the words in the
Develop processes to 'capture' intangible
assets arising from your business. Don't let
those assets drift out your door.
Avoid 'jointly' holding intangible assets
with someone else, when possible. Otherwise, you
will probably get more trouble than you bargained for.
Think carefully about your business processes,
physical security and other mundane things (e.g.,
what happens to old computers in your organization?).
Don't just focus on the legal side.
Get written IP assignments from your employees
and contractors. You may be surprised at what they
can own if you don't.
If you can't do it all internally, get
help. There is too much at stake to simply give up
or ignore it.
Don't forget that significant portions of the
intangible value are tied to people. Are you
capturing knowledge and information from your staff? Do you
have plans in place to keep key people? What happens if key
Watch out for 'open source'
software. Nothing in this world comes free.
Don't assume the rest of the world works the
way Canada does. Even our neighbour to the south has
some different rules surrounding intangible assets.
Avoid restrictive provisions in
agreements (e.g., noncompetes, restrictive covenants
and confidentiality provisions). If you do sign an agreement
that includes a restriction, keep track of it (e.g., keep a
Avoid vague or unclear language in agreements
involving intangible assets. If it is not crystal
clear to you when you sign the agreement, it probably will
not get any better with age.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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