Is Intellectual Property the Hidden Force in the Major Shifts of the Global Energy Landscape?
Intellectual property (IP) rights are a major factor for investors wanting to invest in a technological business. Historically, intellectual property rights were frequently used to assess a company’s underlying invention. However, while intellectual property rights, particularly patents, continue to be a good indicator of innovation, IP now has substantial monetary worth for a corporation.
Intellectual Property and the Changing Energy Landscape
In fact, during the previous quarter-century, intangible assets have risen to become a company’s most valuable asset type. In 1975, it was estimated that intangible assets accounted for 17 percent of the S&P500’s market value (e.g. patents, trade marks and copyright). Intangible assets are expected to account for 90% of the S&P500 (stock market index that tracks the stocks of 500 large-cap U.S. companies) market value in 2020.
In 2021, worldwide investment in the low-carbon energy transition will reach $755 billion, a 27 percent increase over 2020. This is good news for technology businesses and investors in this area. With more activity comes higher scrutiny, and it is becoming increasingly critical – for both technological firms and investors – to ensure that IP rights such as patents and trade marks are not just in place, but also fit for purpose and successfully maintained.
It is sometimes insufficient for technology businesses to just demonstrate that they have IP; their IP must be strong and suited for purpose in a continually changing and expanding field. IP may protect a company’s position by functioning as both a weapon and a barrier against third parties, but only if it is properly developed and implemented.
As society moves to new energy sources and infrastructure, one important result of the energy transition is the creation of possibilities in new industries. Technology firms who can pivot and use their knowledge and know-how in these new commercial situations will be able to capitalize on these possibilities. IP rights may help with this by allowing for licensing and incentivizing new collaborations, but the IP must be acceptable to not just safeguard a company’s existing position, but also to help with market penetration. Ineffective IP may mean the difference between award of contract in a new market and losing it to a third party.
This is true for both sides of the investing equation. While it is essential for technology businesses to have strong IP rights, it is also essential for investors to be able to accurately identify and analyze the IP of a possible investment target. Due diligence on intellectual property is an investor’s greatest friend; yet, for technological firms, it is vital to acquire the correct counsel at the right time. The gap between a high-quality IP portfolio established with understanding of the sector’s demands and prospects and one built without such information is significant. It might make the difference between entering a new market and failing to do so, gaining or losing market share, and attracting or rejecting business partners. IP advice based on IP experience combined with in-depth understanding of the energy business may not only help to evaluate the real worth of a company’s IP portfolio, but can also serve to drive IP strategy moving ahead to optimize market prospects.
As a result, it is essential that, in the quickly expanding energy landscape, technology businesses and investors collaborate with IP specialists that understand both the legal and energy sector landscapes. Only with this mix of expertise can technology businesses and investors profit from maximizing the value of their intellectual property.
