Intellectual Property Office – making IP more easily traded and financed

The IPO commissioned us to examine the key characteristics of IP markets and the information needed to help businesses raise finance against and trade in their intangible assets.

Lifecycle Of Intangible Assets

“Knowledge assets aren’t appreciated in mainstream UK lending,” concluded a research report published by the Intellectual Property Office in late 2013. As the IPO response to the report summed up, this meant that “IP was therefore a missed opportunity with millions of pounds worth of business assets whose value was not being leveraged at all, or only being leveraged inadvertently.”

Following on from this, the IPO commissioned us to look at what could be done to build the necessary ‘information ecosystem’ around IP, and what value this could deliver. They asked us to examine what the characteristics of an efficient IP market would be, and what information businesses would need to raise finance against and trade in their intangible assets.

We reviewed primary research on the subject and consulted a wide variety of stakeholders, including people from the BBC, Arts Council England, the Technology Strategy Board, Nesta, the Open Data Institute, the Institute of Chartered Accountants in England and Wales, and the Performing Rights Society.

Our approach used design thinking, including:

  • Using systems thinking, modeling markets and the ecosystems that underpin them as socio-technical systems, and recognising that people are not logical in the way they adopt technologies and ways of working 
  • Modelling the ecosystem by putting people first, followed by key interactions, transactions and flows of information 
  • Considering the ‘softer’ IP and intangibles of the copyright industries – including the creative industries and cultural sector – alongside heavier technology-based markets

Our main recommendations were:

  • Develop a framework of standards for how information about intangibles (including their valuation, ownership and use) could be shared by those working across all parts of the private and public sector
  • Bring together the private, public and not-for-profit sectors to develop and trial publicly accessible information services to help build IP markets – focusing initially on accurately identifying who has rights in what
  • Encourage and enable the development of research services which support decision making by businesses, investors and other funders around the sale, purchase, insurance, licensing and financing of intangible assets
  • Identify what information is needed by providers of products (for example, insurance) to reduce the risks associated with intangible assets to the point where funders will treat them as collateral for finance

Our final report prompted responses from Nesta, Elite Business Magazine, the World Intellectual Property Review and IP Finance.

Enabling intangible asset markets to work more efficiently and effectively is not an end in itself. If the market in intangible assets works more effectively, this encourages investment and innovation in new technologies, experiences and services - and growth across the economy.