This post explores the relationship between the KingIV Report on sustainable governance and IP, the next traverses a three step approach to IP management, followed by a case study illustrating the need for a deft touch on IP enforcement where brands cater for social good, and the power of measurement.
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Professor Mervyn King, the name that
is inextricably linked to the KingIV report on sustainable governance, started off his presentation at the launch
this week with a slide that I often use to start off my own presentation on intellectual
property and innovation. I am sure he would be pretty bashful
about using my favourite slide. That’s not true of course, but the fact that he
used that particular slide, my slide, is.
He used it to illustrate, in his wise
demeanour, that the
value over time in companies has shifted from physical assets to intangible
ones. This illustrated too, the evolution of the King reports (I-IV) and the shift in
emphasis of governance over time from profits and outputs, to outcomes i.e.
intangibles.
His particular example was the
business of Ben & Jerrys which he introduced as a pioneer in using business as a
force for good. I am familiar with their
ice cream and subsequently looked that business and came across a book
published in 1994 entitled “Ben &
Jerry’s: The Inside Scoop” which focusses on “how two real guys built a business with a social conscious and a sense
of humour.”
1994 was of course also a critical
date for South Africa
and the wise Prof reflected upon that, stating that the evolution of King was
is indeed an unintended and positive by-product of our grappling with our
unique circumstances as a nation at that time, and since then. A nation with so
much diversity and disparity. He explained that this is the reason why KingIV
is also a pioneer, worldwide and why he sits on so many international boards,
on governance. I am sure that there are many more reasons.
The use of that particular slide by
me is significantly less profound but hopefully no less remarkable. You see the link between intangibles
and intellectual property is in fact tangible. Intellectual property in its
legal forms as patents, trade marks, designs, copyright and knowhow are the
only legal way in which intangibles are protected and nurtured. Proper governance under KingIV will
therefore mean proper IP governance.
So, despite the phrase “intellectual
property” not featuring once in the entire KingIV report, adhering to KingIV naturally means
adherence to sound policies on IP management and governance. The better this
governance, the better care of the intangibles and potentially, the higher
value of the business.
It is worth mentioning here, that the
ISO standard on brand evaluation published in 2010 (ISO10668), advocates a three step approach to
brand evaluation. Brands are of course, the touch and feel of a business, that
distinguish it from others and through which repeat customers are retained.
The Apple brand speaks to innovation
and tremendous customer experience, whereas the Oakbay and Enron and now Eskom conjure up
completely different images. Those brands also have three different brand
values. Apple dominates the world, whereas Oakbay, Enron and sadly now Eskom do
not.
The first step of the three step
approach to brand valuation entails a thorough examination of the legal position of the brand i.e.
legal governance of intellectual property used to protect a brand. The second
and third steps, by the way, entail measuring the behavioural and financial
aspects of a brand. I am no accountant but these are very King-like attributes
to me.
An example
of where a simple trade mark opposition had
a direct effect on a listing value in an IPO was that of Skype. Their litigation
(including routine oppositions) with BSkyB in Europe had to be disclosed in the listing documents as a material risk, directly affecting its value.
But this stage I am hoping that you
are with me, that IP governance and KingIV outcome based reporting, and brand
valuation are in fact, three peas in the same pod. I will go as far as to say so is
innovation. The normal use of that slide is to draw parallels between IP
governance in the creation of opportunities to innovate, create jobs and grow.
Intellectual property therefore potentially underpins it all.
Next up, a three step approach to effective IP management.
Posted by Darren Olivier (editor of Afro-IP)
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