Rationalization of Intellectual Property

The germination of an idea may be either purposeful or accidental. Either way, if the ultimate intent is to exploit the idea, once conceived, it is Crescendo’s philosophy and practice that creative work should be developed to its highest value in use.

The ip may have pre-existed without any prior involvement by Crescendo^<TM, or alternatively, the creation (and further development and rationalization) of the ip, usually to satisfy a specific purpose, maybe a particular requirement of the Crescendo^<TM’ overall mandate.

It should be noted that once a particular ip is established it may, but need not, remain static and never be altered. Correspondingly, another ip may be in a continuous development process; constantly evolving and being readapted in response to external factors.

Once conceived, the ip must be specifically, precisely and comprehensively described in order to clearly establish what it is (and perhaps what it isn’t); to identify the ip originators and, if different, the ip owners (in those instances where the creator has transferred or disposed of the interest to a third party; related or otherwise). 

The purpose of the sub-process of codification is to define, describe and systemise the ip within its intended spheres of application primarily for registration.

Validation is the examination and evaluation process whereby the ip is determined to be commercially viable and potentially valuable.

Validation may be a Crescendo^<TM performance requirement through its various means of assessment, or alternatively the ip may have been previously validated by its presence and adoption in the market.

Protection is the sub-process of RIP^<TM that evaluates and assesses the appropriate measures to be put in place to protect and safeguard the present and future worth of the ip in both practical and legal terms. It is an exercise of both fortification but also, critically, competitive advantage (the classic patent vs. trade secret argument; disclosure vs. secrecy).

The protection methods and strategy chosen are a function of the nature of the ip and how the associated delivery dynamic and value is preserved and optimized.

Formalisation of the protection process is typically handled through a coordinated effort between Crescendo’s internal and external legal associates

As an intangible, the valuation of intellectual property is both an art and science. But ultimately, the valuation process must be drawn from basic valuation tenets as in any object of value. The value of intellectual property is a function of both what it creates, in monetary and non-monetary terms, both presently and in the future; and/or more simply, what a qualified independent third party would be ready, willing and able to pay for it.

There is an international body of professionals that practice exclusively in the field of ip valuation; predominated by the BIG4 and Tier II Accounting firms and CBVs (Chartered Business Valuators), often involving consultation with niche sector experts, of which Crescendo^<TM has broad associations and ties.

The financial engineering sub-process of RIP^<TM involves multiple considerations:

• Choice of legal operating structure
• Choice of jurisdiction(s);
• Regulatory considerations
• Reporting considerations
• Mind and management;
• International operations and logistics structure;
• Asset mix and deployment plan;

The ultimate choice of the financial and operating structure is reviewed on an on-going basis for relevancy and optimization.

The core of the ip rationalization process is the intellectual property strategy (the ips^<TM) representing the comprehensive plan of exploitation and optimization of the ip including the detailed elements of delivery.

Because each ips^<TM ultimately forms part of a private estate plan, by definition, each ips^<TM is personal and unique to that individual.

Under RIP^<TM, it is Crescendo’s responsibility to ensure the ips^<TM is driven and delivered as prescribed by the Trustees (see Governance following).

The manner in which the ips^<TM is driven and delivered is a resourcing (financial/human/intel) issue, the overall responsibility for which rests with an appointment from the Trustees; an appointment and position defined by Crescendo^<TM and known as the ips^<TM Driver^<TM.

That individual is typically engaged by and active within the Crescendo^<TM network of professionals but need not be necessary; the appointment could also be an existing and trusted professional advisor to the Member/Client.

Governance is the vital function that overarches each Crescendo^<TM engagement/relationship and refers to the role played by the appointments to the central governing body of the IPIT^<TM (the Intellectual Property and Investment Trust”), so that the continuing wishes and requirements of the Trust’s settlor are being discharged and satisfied. These appointees are referred to and known as the Trustees.

The monetisation of intellectual property means, in its simplest definition, the conversion of ip to cash or it s near financial-instrument equivalent.

MIP^<TM deals not as much with the act of conversion itself but rather the method and plan of doing so.

The monetisation process will essentially follow one of two paths:

1. Hold and exploit by way of licensing agreement; or
2. Develop for sale and exit.