The Musings of Metis

Upon the Shoulders of Giants

The time comes in every organisation where the leader needs to step down and pass the reins to another. In Apple Inc. this event could not have had greater focus with the world’s business press headlining on the resignation of Steve Jobs as CEO.

What the event has highlighted is the importance of a company to ensure its brand and reputation are not tied up with one individual but have anthropomorphic characteristics with the company appearing as a “living, breathing thing”. The jury may be out on Apple, with the sudden drop in share value followed by a bounce back recovery. Was the recovery as a result of confidence in Tim Cook, Jobs’ successor or was it as a result of share acquisition during the dip? What is noticeable is the increase in shareprice of Apple’s competitors. Is this the time for them to gain valuable ground?

At Metis we insist organisations look at the association between the personal brand of their key people and the company’s own brand, between the individual’s know-how and how this impacts on the company’s reputation. By identifying exactly where the balance exists and identifying what drives real competitive advantage, we can help the organisation plan for continuity during transition and develop knowledge transfer to support the succession of future leaders.

Are your key people single points of contact? Will your brand competitiveness be impacted if they move on? Have you sufficient know-how transfer policies in place to mitigate the risk? What actions have you taken to ensure successful succession? What will the market make of it and what might be the impact on customers or revenues? Interested to know.

Innovation is?

The cover story of the May edition of “CNBC Business” took a critical perspective on innovation and its relevance to business. The article, contributed to by a number of high profile commentators including Chris Barez-Brown, Kjell Nordstrom and Vijay Govindarajan claims innovation is at the top of business agendas right now because everything else has been done: cost cutting, customer relationships, engagement.

But what is innovation? It is suggested few companies have a firm grasp on what innovation really is or means for their enterprise. Leaders often confuse innovation for creativity. “Innovation is not creativity” says Govindarajan, “it is commercialising creativity”.

“Creativity is messy and intense, while most executives prefer order and predictability” contributes John Hagel, co-chairman of Deloitte’s Center for the Edge based in San Jose in the heart of innovative Silicon Valley. Yet often in the tech industry, Chief Innovation Officers are appointed, put in a corner and told to innovate.

These statements support Nordstrom, economist and author of “Funky Business” claims that “innovation is a form of creative destruction” and when big companies acquire smaller, innovative firms, after a few years only a brand is left, “the innovators have either been shackled or they have moved on”.

So how can this be addressed? Nordstrom refers to Novartis as a good example and outsourcing of innovation as the answer. In return for a stake in the company, innovative collaboration is shared: whilst one party does the research the other focuses on its core strengths - the application of the innovation and exploitation of economies of scale in the marketplace.

Here at Metis we value innovation as one of the ten key areas of hidden company value, areas where IP assets are often under-exploited. Innovation, as the article suggests is not a standalone activity: it relies on each of the other areas including brand, relationships, processes and most importantly strategy. Where we see value being created is in collaborative IP development: one company licensing its IP assets to another who in turn can give the former the market traction or way through barriers to entry it cannot breach on its own.

Have you looked outward for innovation? Are there synergies to be developed in your relationships or are you committed to doing on your own?

Is Brand Restoration Insurance a Good Investment?

An interesting article was posted by FT.com last week where it discussed the advantages and disadvantages of brand restoration insurance offered by AON. The full article can be found here.

We will have read recently of a number of companies who may have benefitted from such insurance: BP and Toyota for example and the insurance is all very well for larger companies who can afford the premiums but what about smaller companies? The crux of the article lies in the following paragraph:

“Brand and reputation are the sum of the investment of management time and energy in the invention, manufacture, marketing and distribution of successful products and services. Reputation management may sustain and promote your brand in good times and crisis management may help salvage some of it when they turn bad. But bosses who neglect the building blocks of their company’s success will find in a crisis that they have no reputation to defend, no matter how much insurance or advice they have bought.”

Before companies invest large sums of money in insuring their brand and reputation, they must first have brand and reputation worth protecting. This occurs through a long term commitment and through consistency in approach and if properly managed as the company’s “most valuable asset”, the need for insurance may not be needed.

Is this insurance really needed, or has it been created as a consequence of a cut-throat, win-by- any-means marketplace? Is good housekeeping the better option? Perhaps the “insurance premium” might be better spent building the brand value inside the business with employees, partners and suppliers to secure the equity? Do you agree?

Electrical giant Dixons calls on Metis Partners to market two of its best-known brands

Glasgow-based intellectual property (IP) asset specialist Metis Partners has been appointed by Dixons Retail plc (Dixons) to market and sell the IP assets, of two of the multinational electrical giant’s best-known and longest-established brands, Saisho and Miranda.

The sale is a coup for Metis Partners, and enhances its reputation as the destination of choice for organisations seeking to generate a return on IP assets such as brands which may have benefitted from significant investment in the past but are no longer critical to future strategy. By using Metis Partners, they can generate a significant return on these assets that would be otherwise written off.

Dixons, which spans 28 countries and employs more than 40,000 people, called on Glasgow-based Metis Partners to find buyers for its Saisho own-brand product line, including audio, TV and video products, and Miranda, the internationally recognised camera and photographic equipment brand.

The Saisho brand has created nearly £27 million in sales since it was first introduced by Dixons in 1982 as a technology range which over the past few decades has become a household name. Assets for sale include goodwill in the brand and reputation in addition to 16 trade marks providing international protection.

The Miranda brand, originally created by a Japanese company more than 50 years ago, was acquired by Dixons in 1981 and was used on SLR cameras, compact cameras, lenses and other photographic equipment. It has generated more than £29 million for Dixons across its product range. Assets in the sale include goodwill in the Miranda brand and reputation as well as 20 international trade marks.

Stephen Robertson, CEO of Metis Partners, said: “These are significant brand names which have served Dixons well over the years. They have benefited from enormous advertising and media exposure within the retailer’s campaigns and we expect there to be keen interest given the outstanding levels of consumer recognition attached to them. "We believe Saisho and Miranda will be of interest to companies suffering the brand provenance gap (lack of recognition and heritage) where companies are selling high quality tech products / services but are unable to charge a premium for them. This is often because they are not being sold under a recognisable brand - companies in this situation could buy Miranda or Saisho and “hop” onto the brand recognition and brand recall that already exists in the market for these brands.”

All offers and / or notes of interest should be directed to Nat Baldwin at Metis Partners by 4.00pm on Thursday, 26th May, 2011.

For further information, please contact Nat Baldwin at Metis Partners, Trinity House, 33 Lynedoch Street, Glasgow, G3 6AA. Tel: 0141 353 3011.

Some Say....

There are rumblings around the racetrack. Some say its protection of identity. Others, that it is the right of licence payers. We only knew he was called the Stig!

No longer.

The BBC had taken legal action to block publication by HarperCollins of the book which would unmask the faceless mystery driver and well established merchandising image.

The BBC claimed he had been bound by a confidentiality agreement and that revealing who he is would spoil viewers' enjoyment of the popular Top Gear programme.

However, after more than a day of private legal submissions, lawyers for HarperCollins emerged to say the case had concluded in their favour and the identity of the Stig was revealed.

So this case may raise questions in your business: is your brand and identity secure? Have you fully protected some of your core intangible assets by trade mark copyright or design right? How important is the identity to your company? Can you live without it?

I’m sure that the mystique of the Stig will continue, just look at the merchandising collateral and after all he had African, American and other nationality cousins. Didn’t he?

Coffee to Go?

In an interesting article in a recent Financial Times, two opposite perspectives on licensing were demonstrated.

The article related to Oracle’s patent and copyright infringement claim against Google for the inclusion of elements of the Java software (now owned by Oracle after its purchase of Sun Microsystems earlier this year) within the Google Android smartphone operating system.

It appears Java has become the victim of a sea change in licensing strategy surrounding its use. When owned by Sun, Java was “promoted” as the enabler for internet applications, a tool set where developers could rapidly build solutions for an ever widening, cross platform user base. As a consequence, it is unlikely for you not to have Java somewhere on your systems if you use a PC, mobile phone or netbook. “Freely” licensed use of Java established its position as the tool of preference and core to internet business and in return Sun gained kudos.

Now, under the ownership of Oracle, Java has become embroiled in the battle for smart phone supremacy. With sales of Android-based smartphones overtaking Apple’s iPhone in the last quarter, and the inclusion of Java code in the operating system. The FT article suggests Oracle see a threat to their existing Java licence revenues whereby it would lose the power to “charge a royalty on new handsets”. As a consequence, the Java strategy has moved from collaborative to protective, with multiple copyright and patent infringement claims being raised in San Francisco.

While the outcome is yet unknown, there remains a risk that Google, if forced to pay for the use of Java, could start to charge for Android, challenging Google’s Android business model and new handset providers may look for cheaper alternatives or open up the opportunity for Apple to regain the initiative or another player (Microsoft?) to enter the arena.

As the article states: “at the time it bought Sun, Oracle executives said they would tread carefully in how they exercised their Java rights, since a heavy-handed approach could undermine the software’s standing as a de facto industry standard”, but has the temptation of new revenues as a result of the growth of mobile apps been too great?

The bottom line is this: when you establish a patent portfolio, you must seriously consider how you intend to utilise it. Do you intend to actively pursue each infringement or do you view a collaborative approach to be more attractive, sharing profit through a well thought out licencing strategy?

Is Java now both a headache as well as an opportunity?

If Apple do it, why can't you?

With all the press that Apple has received recently with the iPad and last week the new iPhone 4, it was interesting to read the review of the new iPhone's features by Kyle Baxter of Tightwind.net.

In it, Baxter highlights the new hi-res screen, the camera and – as ever – the overall design. But technology aside, his most significant comment is not the adding of more features but:

“they [Apple] aren’t attempting to compete with Android phones feature-by-feature. Instead, they are trying to continually redefine exactly what a smartphone is, and thus force their competitors to compete on Apple’s terms. They’re trying to make everyone else respond to them, rather than the other way around.”

Metis Partners always stress the importance of “competing on your own terms” as a key strategic objective and by identifying and exploiting your companies intangible assets - brand and reputation, market intelligence, know-how, IP and culture being among the ten areas Metis consider - you can immediately take the upper hand and make competitors respond to you, rather than you to them.

So if Apple with its wealth and position of strength does it, why aren’t you? What hidden assets do you have that can be used as a “weapon” to compete? Where do you have the pistol to beat your competitors bow and arrow?

Think fruity you little monkey!

Metis Partners has been successfully partnering with insolvency practitioners in order to maximise the return for creditors in insolvency situations for a number of years. You may have seen we recently completed the sale of the Kshocolat and Hot Choc brands to Bon Bon Buddies Ltd. http://www.kshocolat.co.uk/.

Metis Partners are currently involved in the sale of a number of other brands and we have had the bright idea (if we don’t say so ourselves) to supplement our normal marketing process by offering opportunities for businesses to purchase and exploit otherwise under-utilised intangible assets via our website.

The brands currently available for sale are as follows:

‘Think Fruity’ – The Think Fruity brand was launched onto the retail market in late 2008 / early 2009. Described as a “vibrant, modern range of personal care and washing up liquid products, uniquely positioned to offer the consumer a product of quality, while addressing some of today’s concerns about environment and health, all at a budget price”, the Think Fruity range consists of 14 products, split across 4 categories. Think Fruity was developed specifically to meet a target recommended retail price of £1, and was primarily sold through ‘bargain’ retailers who have seen an upturn in trade during the recession, including Poundland, Boyes and B&M Bargains, although it also enjoyed particularly strong sales through Tesco.

The Think Fruity brand is protected by a UK trademark registered in class 3, and the brand has acquired goodwill through its year of trading and the market recognition gained during that time. A buyer will have the opportunity to acquire and exploit this goodwill for sales growth in the UK and in international export markets. Further information and product photographs can be found at: http://www.thinkfruity.co.uk/

‘Little Monkeys’ – a UK registered trademark is available for sale in class 3 (relating to soaps, shower / bath products, cosmetics and other toiletries). Purchasing this trademark would provide strong branding potential for a company seeking new market opportunities in the children’s toiletries / body care sector.

‘Stir’ – a UK registered trademark encompassing a series of three stylised word marks for the words ‘Stir’ and ‘Stir Soups and Salads’ and a registered UK trademark representing the stylised image of a stirrer are available for sale. These trademarks, registered in classes 29 and 30, relevant to the sale of food and drinks, provide new market opportunities for entrepreneurial businesses in the takeaway soup /salad bar sector, or indeed to businesses in any sector offering products which can be ‘stirred’, such as takeaway coffees and hot drinks.

If you are interested in purchasing any of these brands and would like to receive a marketing schedule containing full details of the assets available for sale, please contact Lauren@metispartners.co.uk or call us on 0141 353 3011.

Who owns the brand?

Metis Partners is always looking for ways to help its clients get the most out of their intangible assets, whether we are acting for clients wishing to commercially exploit their intangibles through licensing or acting on behalf of the insolvency practitioners seeking to maximise the return for creditors through the sale of a company’s intangibles. One issue which has come up in a number of recent deals relates to the ownership of the intellectual property in marketing and brand materials produced for companies by external companies such as graphic designers, web designers and photographers.

These materials can include things like the website content and layout, the design of the company’s logo, and even the shape and design of packaging of the company’s products - all of which are important assets and integral parts of a company’s brand identity. Such materials are all protected by copyright, which arises automatically in favour of the author (normally the design company, when an employee has prepared the materials), and in the case of packaging, design rights may also apply in favour of the designer. Such right may be registered or unregistered, depending on whether steps have been taken to protect the designs in question. The utilisation of external contractors by design agencies can complicate copyright ownership yet further.

Companies often assume that as they have employed the design agency and paid for the work, that they own the intellectual property (copyright) in all materials. But without taking certain pro-active measures to obtain an assignation of copyright, this is not necessarily the case, a situation which can cause problems when assets such as the brand are being licensed or sold. Unless these rights are expressly assigned by the designer to the client, the company utilising the brand may be unable transfer the copyright or design rights to a licensee or purchaser without the consent of the design company, which remains the legal owner of these rights. Obtaining consent in itself can lead to unwanted delays, involving a buy-out fee for assignment of copyright along with potential legal costs. As design company T&Cs may or may not make clear, agencies may well be able to effectively hold to ransom clients who wish to exploit their own intellectual property.

Another area in which companies may face similar problems is in relation to software produced by external consultants on behalf of the company. Unless there is an explicit assignation of the copyright in the software code, this will be retained by the software development firm. This can cause problems in an insolvency situation where bespoke software can be a potentially-valuable asset, essential to a prospective purchaser who wishes to purchase the business or certain assets of the business.

In light of these issues, Metis Partners recommends that companies engaging external agencies to produce brand or marketing materials, bespoke software and packaging designs, which can often be integral and valuable assets of the business, clarify ownership position of these materials and ensure that ownership is transferred at the time the materials are prepared in the contract for services, or in a separate assignation document following preparation. Ensuring all intellectual property is properly transferred can help ensure that certain copyright pitfalls can be avoided.

Links:

http://www.designdirectory.org/new/bdi/brochure/Appoint_a_Design_Agency.pdf

The Emerging Role of the CIPO

In a recent Webinar sponsored by IAM Magazine, "The Emerging Role of the CIPO (Chief Intellectual Property Officer)", thought leaders in IP, Ron Laurie, of Inflexion Point Strategy and Rob Sterne, of Sterne, Kessler, Goldstein & Fox concluded:

An increasing number of companies are managing IP as a strategic business asset and CIPOs will be the key executives for companies wishing to change from the perspective of IP as a cost centre to an IP as a profit centre model.

A key responsibility of CIPO’s is their relationship with the heads of strategic business units and their joint responsibility to assimilate the financial impact of IP on the unit’s value (including revenue) forecasts.

In posting comments on the Webinar on how to address these challenges on the IP Finance Blog, Neil Wilkof of Herzog, Fox and Neeman raised some critical challenges:

(i) The approach seems to have a patent-centric orientation, but what about trademarks, copyright and trade secrets?

(ii) The approach is focused on a large company environment but what about small and medium enterprises – can the structure be generalised?

(iii) IP could exist as both cost and profit centre – how do we account for both possibilities?

(iv) Where can we identify good practice that is operationally relevant and not phrased in headline terms?

In answer to these questions, Metis Partners suggest, in the first instance, all IP (extending to and including intellectual, relationship and structural capital) should be categorised, recorded and protected. This gives a solid foundation on which to identify the IP impact and engage those immediately responsible for its management in the strategic alignment process.

We agree, when big companies talk about IP assets they often really do mean patents, but patent poor SME’s can focus more on know-how, technical innovation or their investment in R&D as their “IP”. In both cases, and in answer also to question (iii) it’s crucial that companies align their IP with their business strategy – market intelligence is an asset in its own right – IP management offers competitive differentiation and agility in the market, protecting both market share and margins. There’s the common approach, and a strategy to use IP as a profit centre through exploitation in non-competing markets.

Finally, we humbly refer to our own approach, applied successfully across multiple sectors and companies, large and small whereby we break down IP from the business perspective into ten interlinked classes covering areas including IPR, Customer Relationships, Key Business Processes and Brand and Reputation. Defining the assets within in these business perspectives, makes it easier for business unit managers to a) accept, b) manage and c) develop the assets leading to increased revenue opportunities.