1. A-Bundling We Will Go: When It Comes to
Intangible Assets, the Sum is Often Greater
Than Its Parts
By David Drews* – IPmetrics LLC
The proper allocation of scarce resources is vital to meeting -- or exceeding – your financial
goals. To be successful in this endeavor requires that you have a thorough understanding of
the resources available to you as well as how these assets can be most effectively utilized
in whatever situation you face. A major component of this involves understanding the value
of your assets when viewed in various contexts.
Increasingly, the assets that seem to be having the greatest impact on the decision-making
process of top managers everywhere are the intangibles: patents, trademarks, copyrights,
and the like. Each month, I will explore the full scope of issues surrounding the valuation of
these assets, ranging from general topics such as valuation techniques to specific areas
such as the impact that a bankruptcy filing can have on the value of an intangible asset. In
this article, I will discuss the various forms of intangible assets and the proper way to view
them from a valuation perspective.
I already mentioned the more obvious intangibles. Patents, trademarks, and copyrights are
registered with the government and are used to inform the world as to the rightful owner of
the property indicated by the registration. While there are other aspects associated with the
registration of these “top line” intangibles, such as the teaching requirement associated with
patents and the source-of-goods issue associated with trademarks, from a valuation
perspective, the most important feature of registration is to provide the asset owner with the
ability to exclusively use the asset and exploit its value as the company sees fit. As you will
see throughout this series, it is this aspect that provides the foundation for determining
value in any context, whether from current operations or proposed activities.
While top-line intangibles are undoubtedly the most important intangibles in most situations,
there are dozens of other intangibles that can also have a very real impact on your firm’s
success. Among these are slogans, characters, packaging designs (trade dress), domain
names, web page designs, non-compete clauses, proprietary sales methods, a well-trained
staff (human capital), product warranties, customer lists, training programs, trade secrets,
formulae, and targeted survey data. The list goes on.
It is imperative that your management team possesses a comprehensive view of your
intangible asset portfolio in order to properly protect and most effectively utilize it. For
example, suppose your products enjoy a leading position in their respective markets and
this position is primarily due their superior quality which, in turn, is primarily due to the
* David Drews is president of IPmetrics LLC, an intellectual property consulting firm.
You can reach him at 858-538-1533, or ddrews@ipmetrics.net.

2. A-Bundling We Will Go
retention of a well-trained workforce. In this situation, it would be potentially harmful for you
to terminate your training program in an effort to cut costs.
From a valuation perspective, some of your assets can be viewed independently; i.e., their
value can be isolated from the value of the other assets in your portfolio of intangibles. In
many cases, however, it makes more sense to view your assets in terms of their relation to
one another. For example, all of the intangible assets utilized in the marketing process may
be more effectively valued as a “bundle” rather than as stand-alone assets. This is an
important concept since very few intangibles travel in a vacuum. They rely, to some extent,
on the other assets that make up the bundle. A marketing bundle may consist of brand
name, logo, and worldwide trademark registrations, secondary trademarks or logos, your
marketing strategy, packaging concepts, trade dress, web sites, and any other assets that
contribute to the promotion of your company as a whole, or any of your individual brands or
products.
Bundling can apply to all forms of intellectual property, from technology such as patents,
trade secrets, and formulae, to knowledge-and-skills assets such as proprietary training
manuals, to operating procedures, to customer lists. The bundle may include all of these or
consist only of a subset of the components included in any one of them. Whatever bundle
you deem to be the most appropriate for the immediate context, the simple act of identifying
related intangibles will provide you with a solid foundation for a focused valuation exercise.
The following provides a look at some potential bundles of intangible assets:
Marketing
 Corporate name and logo
 Marketing umbrella and brand name
 Sub-brand names and trade dress
 Worldwide trademark registrations
 Copyrights
 Secondary trademarks
 Consumer advertising
 Package design and copyrights
 Marketing strategy
 Product warranties
 Graphics
 Promotion concepts
 Worldwide public relations effort
 Ad and graphics review
 Labeling design and copyrights
Knowledge/Skills
 Non-compete clauses
 Mailing lists
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3. A-Bundling We Will Go
 Sales knowledge
 Proprietary MIS
 Databases
 Customer lists
 Sales leads
 Customer relations
 Office management
 Manuals, instructions, codes
 Purchasing systems
 Employee education
 On-site training
 Processing methods
 Exchange of technical ideas
 Quality control standards
 Marketing/training
 Trade relationship
 International Research Clearing Center
 Pricing policies, fee structures
 Asset management processes
 Regulatory agency filings and approvals
 Security systems and processes
 Record-keeping systems
 Business licenses and charters
 Customer surveys
Electronic
 Domain names
 Web sites
 Links to other web sites
 Retail kiosk
 Credit systems
 Traffic controls
 Banner ads
Technical
 Trade secrets
 Formulae
 Packaging technology and sources
 Shapes and sizes
 Proprietary processes
 Key patents
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4. A-Bundling We Will Go
 Process technology
 Environmental manufacturing techniques
 Design technology
 Technical training
This article was originally posted on corporateintelligence.com on 10-04-2000.
* David Drews is president of IPmetrics LLC, an intellectual property consulting firm.
You can reach him at 858-538-1533, or ddrews@ipmetrics.net.
© 2010 IPMETRICS LLC. All rights reserved.
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