Fresh Water World's Most Valuable Intangible Asset Reports Global IP Technology Authority
Interview with Effie Chow, PhD on Sharon Kleyne Hour Power of Water
Hear the Sharon Kleyne Hour Power of Water on World Talk Radio, Voice America, Green Talk Network and Apple iTunes
Harvesting Intangible Assets Author Andrew Sherman Interviewed on Sharon Kleyne Hour Radio Show about Water's IP Value
Fresh water is not only world's most important tangible commodity, it also ranks among the most valuable intangible assets. That was the conclusion of author and global intellectual property ("IP") and technology expert Andrew Sherman, in an interview on the Sharon Kleyne Hour Power of Water® radio show of April 28, 2014. Sherman is author of 24 books, including Harvesting Intangible Assets (AMACOM, 2011).
Andrew Sherman, MBA, is a partner in the global legal and consulting firm Jones Day. His expertise is developing strategies to leverage intellectual property and technology assets. Jones has served as legal and strategic consultant for dozens of Fortune 500 companies and hundreds of emerging companies. Jones is an adjunct professor in the MBA programs at the University of Maryland and Georgetown University.
Sharon Kleyne, host of the Sharon Kleyne Hour Power of Water®, is Founder and Research Director for Bio-Logic Aqua Research, a fresh water, atmospheric and health research and product development center. Natures Tears® EyeMist® is the Research Center's global signature product for dry eyes. The radio is broadcast on the VoiceAmerica Variety Channel, Health and Wellness Channel, and Apple iTunes.
Andrew Sherman contends that intangible technology assets, or "intellectual property," are often more valuable than tangible physical assets. Sherman describes intellectual property as ideas, concepts or technology rather than physical objects. The most common methods of protecting IP are patents and copyrights.
Intellectual property and technology is protected under Article 1, Section 8 of the Constitution of the United States, Sherman notes. The section states that authors and inventors should have a right to ownership of their writings and inventions. Sherman has found no other country whose national constitution addresses these issues. Kleyne observes that governments do not protect sales but they do protect IP technologies through patents and copyrights.
Sharon Kleyne is aware of the value of fresh water as an intangible asset because in 2009, she was awarded the first ever US patent on the technology of pure, fresh water as a supplement to the atmosphere to relieve dry eye complaints. The patented IP includes the method of application, the proprietary technology behind the method, and the intended use. That is also where the value to Kleyne' company lies.
Having grown up on a farm, Andrew Sherman views business as an agricultural metaphor. That's why his book is called Harvesting Intangible Assets. In running a farm, Sherman notes, knowledge of the technology of planting, growing, harvesting and marketing are more important than the physical crops. Crops only have asset value when correctly grown and marketed,
Worldwide, according to Sherman and Kleyne, an extreme and growing fresh water shortage is creating an immense economic, political and public health crisis. Kleyne believes that there is sufficient fresh water to go around and that the problem lies in developing innovative and cost effective technologies for collecting, recycling and equitably distributing the water for drinking, agriculture, sanitation and industry According to Kleyne, water is agriculture.
These fresh water technologies are intangible assets worth billions worldwide Kleyne supports Blackrock Founder Larry's Fink's assertion that water is the number one investment worldwide. Investment in fresh water technology enables economic development and saves lives.
Sherman and Kleyne offer advice for business people, entrepreneurs, recent college graduates and anyone seeking employment: Be aware of your company's - and your personal - IP, technology and intangible assets. These assets cannot be protected and monetized unless they are written down, analyzed, identified, documented and legally protected to prove ownership and date of origination. Obtain copyrights and patents whenever possible.
When the telephone was first invented, Kleyne notes, Alexander Graham Bell was sued by an individual who claimed that Bell had "stolen" his ideas. The person could not conclusively prove an earlier origination and therefore lost while Bell made millions.
Individuals, according to Andrew Sherman, should identify and record their personal intangible assets, which employment experts call "skill sets." Again, to maximize monetary values from personal intangible assets, they must be identified, documented and where possible, protected.
Sharon Kleyne talked about several other subjects with Andrew Sherman in addition to fresh water as intellectual property.
As noted, because Sherman grew up on a farm (Sherman Farms), he likes to describe his business findings as an agricultural metaphor. Hence the mane of his book Harvesting Intellectual Assets. He believes that the entire process of business, entrepreneurship and IP technology follow the rules of farming: You plant a seed, protect it from predators and pests, and allow room for it to grow. For an idea to grow to maturity and then survive, it must be constantly fed and watered.
In his books, Andrew Sherman talks about the process of turning intangible assets into a revenue stream. For a farmer, intangible assets include knowledge of farming and professional contacts. He notes that when the family farm failed, his father was able to monetize his IP assets by obtaining employment selling farm equipment.
Sherman notes that flexibility, the ability to pivot and change directions, is important in obtaining optimal benefit from one's IP assets (or "skill set" as employment counselors would say).theoretically, his father could have developed a second and third revenue stream from the same skill set.
Sherman and Kleyne stressed the importance of establishing ownership of one's ideas and innovations. This is achieved through careful documentation and legal protection of IP technology assets where possible. Legal protection includes patents, trademarks and copyrights.
Sherman observed that in business, the entrepreneur may not always see every potential revenue stream and IP asset. He cited the example of the McDonald brothers who opened a hamburger stand in San Diego in the early 1950's. They did business with a fellow named Ray Kroc, who was their milkshake supplier. Kroc noticed the replicability of the McDonald format and the huge franchising potential. The McDonald brothers had not.
The McDonald's story suggests that it's possible to develop a viable revenue flow from somebody else's idea. You need either put a new twist on the idea or develop a market that the originator did not see. All that is required is an entrepreneurial mindset and the energy and determination to tirelessly follow through. A good example is Sharon Kleyne's experience with fresh water as an IP technology asset.
There are several steps, according to Sherman, required to grow an idea from seed and turn it into a viable business and IP asset. Above all, the process must be systematic and follow a written plan. Sharon Kleyne added that no business should ever operate without a written business plan.
The essential steps are taking inventory of what you have and what you need, figuring out how to harvest your idea when it grows to maturity and investigating all possible markets.
Sharon pointed out that when she originally founded Bio-Logic Aqua Research, the first thing she did was hire an accountant and a writer to document her proprietary fresh water technology. Both accountants and writers are involved in documentation and record keeping.
Small companies, according to Sherman, can always borrow fro the farming methods of larger companies. For example Facebook at one point had a billion customers and very little revenue. When they adapted the business model of profitable Internet companies (filling up free space with ads and targeting ads to the expressed interests of specific users), did they begin reporting immense profits. They also developed many original marketing ideas and figured out ways to monetize some of the numerous unique components of Facebook (such as "interests," "favorite movies," etc.)
Sherman noted that Google consists mostly intangible IP technology assets and is worth $350 billion. It has been estimated that only 2% of Google's assets are tangible (buildings, desks, computers, etc). Software systems are intangible assets.
Continuing the farm metaphor, Sherman discussed the need for screens and filters to help prioritize the steps to be taken and identify the potential markets. Constant evaluation and flexibility are critical.
Andrew Sherman is an advocate of good business values, noting that scams and gimmicks are rarely sustainable and often have dire consequences. He calls this the "the good, the bad and the ugly."
"Bucketization" is a word Sherman likes. It describes the concept of knowing what to pursue and what a avoid and admitting that you can't to it all He also noted that viable business innovations tend to occur disproportionately in the United States and disproportionately in California, New York and Massachusetts.
In the discussion of the specific mentioning in the United States Constitution of the rights of authors and inventors, Andrew Sherman noted that a "country" is essentially an intangible asset, as is a constitution. The United States Constitution includes numerous innovative ideas, IP technologies and intangible assets. These include free speech and assembly, free markets, the right to keep and bear arms, protection of entrepreneurs, etc.
The basic of accounting, according to Sherman, have evolved over the years and is now concerned more with taxes than with IP values. This type of accounting, called "GAP" (Generally Accepted Practices), are often inadequate for capturing intangible assets and values. This especially hurts shall businesses. Also, the monetary infrastructure will not make loans on patents pending or potential targeted markets. Sherman advocates legislation to modernize the GAP system.
Sharon wondered which is most important, sales or IP technology values. According to Andrew Sherman, when small companies prepare to be sold, buyers tend to consider primarily sales and tangible assets. Only when they are satisfied with that, will they consider associated IP and intangibles. As a consequence, small businesses tend to be undervalued.
There was some discussion of the IP technology and intangible assets of physicians. Sherman noted that medical records, which are presently tightly regulated, are IP assets that could be monetized in all sorts of creative ways. Finding new sources of revenue and monetization of intangible assets could be a way of reducing medical costs.
To discover more about Andrew Sherman and his books and ideas, go to www.jonesday.com
©2014 Bio-Logic Aqua Research. All rights reserved.