Aon’s Benoit Geurts – Managing Director, EMEA, Aon Intellectual Property Solutions, and Ian McCaw – Head of M&A for Digital Businesses look at why the mobility sector should be taking steps to protect its intangible assets, and how those assets can be used to create additional value.
In recent years, company value has shifted rapidly from tangible assets such as property, plant and equipment, to intangible assets including intellectual property (IP) – from coding, to patents, trademarks, copyrights, domain names, trade secrets, and data. By 2020, it was estimated that intangible assets represented 90 percent of the market value of the S&P500 – a rise from 68 percent in 19951.
For most businesses in the tech-heavy future mobility sector, intangible assets are at the very core of their offering which makes the security and protection of those assets critical, as well as the need to explore how to create additional value in ways such as leveraging IP to find new sources of funding.
Focus on Security and Protection
Every future mobility business should have a clear IP strategy with a defined approach to the security and protection of these intangible assets however far along a company is in its development lifecycle. The types of assets to include in an IP strategy will include the application of copyrights to protect the software code and algorithms, and potentially the user interface of an app.
Trademarks will help to safeguard any branding elements including the brand name, logo or strapline. And some companies will also be able to protect their inventions through patents, especially hardware providers. Understanding the patent landscape can highlight new entrants, identify patents that may create an IP infringement risk, and find potential licensees as well as helping to facilitate discussions on partnerships and collaborations.
Many future mobility businesses will develop trade secrets while growing their services and it is essential there is a robust trade secret policy in place to avoid competitors accessing the non-patented ‘secret sauce’ that provides the company with its competitive advantage.
No business can afford to ignore the data sets acquired from customer journeys either given they represent a great deal of potential value which can be safeguarded by contracts and database rights. The challenge for businesses is many will spend heavily on developing the IP they need when building the organisation, but protection can be almost an afterthought, or not considered at all. There is an issue around software development, for example, where a culture around openness and sharing could lead to programmers inadvertently betraying their company’s trade secrets. Some businesses also fail to put in safeguards to protect trade secrets when employees leave and join a competitor. Making sure IP doesn’t leave with a disgruntled employee could be vital for the future success of a business. Effective cyber security is also key and making sure appropriate measures are in place to prevent hackers accessing IP or data is essential.
Value Creation
Security of intangible assets is one crucial area, but a strong IP portfolio can help a company through fund raising if communicated in such a way to potential investors that IP is positioned as a value driver. From an investor’s point-of-view, understanding the IP position of a potential investee/target from a non-legal point of view using advanced IP analytics will help de-risk their investment and protect value.
For scale ups, IP can also enable the company to tap into innovative source of financing like IP-backed lending which can create an additional flow of non-dilutive funding.
The data collected in the future mobility space is hugely valuable too. Whether an e-scooter or electric vehicle, these devices are data harvesting machines. Companies can take that data and sell it to industries like the insurance sector who are hungry for information on driving habits, as well as other sectors like media agencies, for example, looking for ways to better target their advertising.
Don’t forget either that there is also the potential to create additional value by licensing out an organisation’s tech for use by other companies.
Have a Strategy
For every future mobility business it’s about having a clear strategy from an IP perspective; recognising that the intangible assets of the business need protecting but in a hyper competitive market it’s also the ability to use those assets to create additional value in new and innovative ways – such as the raising of capital to finance future growth – that could make all the difference.
1 oceantomo.com/intangible-asset-market-value-study/
Aon can support your organisation in navigating the protection of intangible assets such as IP, and exploring the options for IP-backed lending. For more information, contact [email protected] or [email protected]
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Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.
This article has been compiled using information available to us up to 27/04/23 and was originally published on movemnt.net.
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