“A cynic is a man who knows the price of everything and the value of nothing”. Oscar Wilde – Irish poet and playwright.
Ignoring the Obvious
The allure of a cool brand, the excitement of innovative technology, and the charm of stylish design often steal the spotlight, leaving the quieter yet essential role of internal operations and information overlooked.
Suzanne Harrison, co-author of Edison in the Boardroom and Einstein in the Boardroom, coined the term “I-Stuff” to describe the intangible assets that underpin organisations – tacit knowledge, know-how, institutional knowledge, relationships, and other unwritten insights. While the term hasn’t gained widespread traction in the IP world, it encapsulates the hardest-to-define elements of organisational knowledge. These assets support the engine room of a business.
A challenge with I-Stuff is its amorphous nature. Unlike registrable IP, which must be clearly defined (much like property boundaries), I-Stuff is often not recognised. A useful approach to identifying these assets is to set aside the organisation’s registrable IP and see what remains. Often, it’s the bulk of the company’s value.
An Alternative View
Another way to uncover I-Stuff is to explore a business’s competitive advantages from start to finish.
The writer has seen an example of this in a diagram several metres long that was used by a manufacturer to record its supply chain and operations. This covered every aspect—from on-farm practices and ingredient sourcing to packaging, marketing, and distribution. It revealed efficiencies, customer-driven advantages, and areas of standard practice, highlighting not only individual components but also how they interacted.
The visual approach was invaluable, as it highlighted not only individual components but also how they interacted and shared common touch points.
The foundation of an IP strategy could then be built identifying what was unique to the manufacturer and how that related to revenue. As an established business with minimal R&D, their primary focus was on securing operational advantages rather than exploring other forms of registrable IP.
Springboards
When crafting an IP Strategy it helps to have an appreciation of timing. In relation to I-Stuff, it is particularly important to understand the research and development effort required to bring a project to commercial fruition, and how long it could take for others to compete if confidentiality is relied on in the absence of formal barriers to competition – for example patents.
Generally, the length of time it would take for a competitor to catch up is proportional to the value of the know-how and other intangible assets that contribute to the project. Often the market advantage and value of the know how is derived from, and leads to an appreciation of, the contribution of key people such as lead researchers.
Bearing these matters in mind, strategies can be put in place to protect the I-Stuff which relate to other milestones such as product launch, timing of expenditure on IP protection, and so forth.
Recording and/or codifying I-Stuff is useful if key personnel leave and misappropriate their previous employer’s know-how. Reassuringly, in many jurisdictions, the legal system recognises the adverse commercial impact which this can cause, and one of the mechanisms by which this can be redressed is through a springboard injunction.
A springboard injunction is a legal remedy designed to prevent a party from gaining an unfair competitive advantage due to their misuse of confidential information or breach of duty. Unlike traditional injunctions that focus on the protection of information itself, a springboard injunction focuses on neutralising the unfair advantage gained from improper actions.
A springboard injunction can achieve the following:
- Deprive the wrongdoer of an “unfair head start” obtained through illicit use of confidential data or breach of contract.
- Restrain the beneficiary of any unfair advantage from capitalising on it for a specified period, rather than indefinitely.
- Injunct for the time it would have taken the wrongdoer to achieve the advantage legitimately, had they not engaged in misconduct.
The legal remedy should serve as a balance between enforcing fair competition and ensuring the wrongdoer does not profit from unethical practices.
IP strategies often require identifying proprietary knowledge and safeguarding it with strong internal systems, controlling access to sensitive information, and managing third-party relationships through contracts. This may lessen the chances of a springboard injunction being required and/or provide evidence required to support the injunction.
Negative know-how
Even mistakes can have value, which leads to the fascinating concept of negative know-how.
Dead-end paths can be valuable in their own right – and not just for supporting inventiveness in a patent specification.
Translating negative know-how into tangible value is practised by an organisation known to the writer which uses its understanding of intangible assets to rescue ailing businesses.
One exemplary case cited by this organisation is about a research company in serious financial trouble. Fortunately, the company had maintained lab books that contained details of “failed” research. These lab books and the information they contained was used to raise money by being sold to another research company. The purchaser benefitted by not wasting time and money by pursuing unfruitful research paths and the vendor solved their financial woes.
This is one reason why documentation protocols which include keeping all research results often form part of the recommendations in an IP strategy.
Final thoughts
Consideration of I-Stuff in an organisation can reveal valuable assets. Crafting an IP strategy can identify these assets and provide guidance on how to own, control and maximise their value.
