LES Leading Edge Series Speaker Interviews: Laurie
Monday, May 13, 2019
LES: You will be moderating the panel titled "Intangible Assets in the Boardroom," In a few short sentences, what can attendees expect to learn?
Laurie: Corporate directors are legally responsible for protecting, and optimally for maximizing, shareholder value, which increasingly involves appropriate oversight of a company's intangible assets, including its intellectual property. However, except in rare cases (e.g., patent licensing firms), a significant language barrier exists between a company's in-house and external IP advisors on the one hand, and its board, and the shareholders they represent, on the other. This communication gap is created by the fact that intellectual property professionals typically don't know how to express the value of a company's IP holdings in terms that are meaningful to investors and financial analysts, who are laser-focused on financial performance metrics such as EBIDTA (Earnings Before Interest, Depreciation Taxes, and Amortization), Free Cash Flow, Earnings per Share, etc.
This language disconnect has become increasingly troubling as intangible assets represent a larger and larger percentage of overall corporate value in the digital economy. Many of today's disruptive business models no longer depend on tangible assets, e.g., Uber doesn't own automobiles and Airbnb doesn't own hotel rooms or apartments. And even in the case of product companies as opposed to service providers, a 2017, WIPO (World Intellectual Property Organization) report concluded that intangible assets add twice as much value to products as tangible capital, across 19 identified global value chains.
- Intangible Assets in the Boardroom
- Ron Laurie, Executive Chairman, InventionShare
- Edgar Baum, Founder and CEO, Avasta Incorporated
- Phil Hartstein, President and CEO, Finjan Holdings Inc.
- Paul Roberts, Vice President of Commercialization, GE Ventures
LES: Technologists and IP professionals face many challenges and opportunities today. What one challenge do you hear about the most? What one opportunity?
Laurie. For me, as a director in a public company, the biggest challenge is overcoming, or at least reducing, the communication gap between IP professionals and investors, which results from the fact that traditional accounting systems (like GAAP and IFRS) are not set up to reflect the true value of intangibles. I believe that the IP professionals should be responsible for closing this communication gap by learning how to express IP value in terms that are more meaningful to the financial community, and to investors in particular, but this is by no means an easy task.
The LES IA in the Boardoom standard is an important first step in that direction.
Click here to register and learn more about the LES Leading Edge Series May 14th event at the Silicon Valley USPTO.