Even companies with small IP portfolios can leverage their holdings into the free cash flow of licensing income by parsing their IP holdings.
"Intellectual property" is the legally protectable and enforceable aspects of intellectual capital, and it includes trademarks, patents, copyrights, trade secrets, right of publicity, and contracts. Increasing, intellectual property assets are becoming more valuable than the traditional physical assets such as plant, property, equipment, and cash.
Many manufacturers overlook the opportunity to patent aspects of their food products or specialised manufacturing processes. This is especially true in the natural products industries, where unusual ingredients are often mixed together and specialised production processes are increasingly required to make successful products. In most natural product categories, it takes substantial innovation for manufacturers to be able to produce successful functional and natural food products.
Intellectual property, and in particular a patent, is critical to protecting product formulations. Patents are the ‘holy grail’ of such formulations, and if a company owns a strong patent it has a limited monopoly in the marketplace that allows it to prevent competitors from copying or otherwise trading on its recipe or formulation for the term of that patent.
How does traditional “Intellectual Property” fit into the modern discussion surrounding the value and practicality of “Intangible Assets,” “Knowledge Assets,” or what has come to be known as “Intellectual Capital?”