The Fine Art of Brand Value

Despite the pivotal role intangible assets play in business, effective intellectual property (IP) reporting remains elusive for many practitioners. 2022 INTA President Zeeger Vink tells Muireann Bolger how the Association’s Presidential Task Force can help.

Accurate and effective IP reporting can seem like a mysterious art to many companies, partly because intangible assets frequently remain invisible on many brands’ balance sheets.

“Current accounting rules are restrictive and don’t even allow for many IP assets to be counted as assets on the balance sheet. That’s a substantial handicap for companies,” explained Zeeger Vink, the 2022 INTA President and intellectual property director of MF Brands Group (Switzerland).

But the right guidance can unlock the enigma and help practitioners bring invisible assets out of the shadows and firmly into the spotlight, he said.

A New Solution

To address this issue and the concerns of members regarding the lack of clarity around IP reporting, Mr. Vink launched a 2022 IP Reporting for Brands Presidential Task Force to focus on how brands report on their IP, both operationally and financially.

The topic for this year’s Task Force had its genesis in INTA’s 2018-2021 Strategic Plan and it is highlighted again in the current 2022-2025 Strategic Plan.

“Brand value was identified as an important aspect in the Strategic Plan, but when it comes to IP reporting, there’s very little information and guidance on how this can be done correctly and efficiently,” he explained.

The Task Force initially found a worrying dearth of action and results. “Many companies are not doing a lot when it comes to IP reporting, and in many cases there’s often no calculation at all,” said Mr. Vink.

The crux of the problem is that while brand practitioners seek to underscore the value of IP to the entire company, they often lack the support to do so.

“It’s not that IP departments don’t want to carry out effective IP reporting. We hear from members that they do want to do more in this regard, but they are unsure about the right approach. We want to give them a framework that they can use and inspire them to do more,” Mr. Vink revealed.

In his view, a failure to develop an IP reporting mechanism is a “missed opportunity” for both IP practitioners and departments to engage in an ongoing and meaningful dialogue with company teams and stakeholders. Even worse, a laissez-faire attitude can exert a “harmful effect” on a company’s overarching strategy, he warned.

“Although we know that IP assets are important for a company’s strategy, management will focus less on this aspect of the business if there is no financial value attributed to it,” Mr. Vink said. “And when there’s scant managerial attention, then IP will not become integrated in a company’s strategy.”

“Current accounting rules are restrictive and don’t even allow for many IP assets to be counted as assets on the balance sheet. That’s a substantial handicap for companies.”
Zeeger Vink, MF Brands Group (Switzerland)

Effective Communication

Practitioners know that IP should not be “treated as a purely legal formality,” and instead, should form the basis of the economic functioning of a company. The key is to communicate this to the entire business, involving other disciplinary areas in brand value, according to Mr. Vink.

“Brand value touches on so many aspects of the business, so we need to reach out to other groups around us—whether it is general management, marketing, or finance—rather than just focus on our small IP community,” he suggested.

Another problem is that brand value can be perceived in diverse ways, Mr. Vink continued, noting: “If we look at this concept from a legal practitioner’s point of view, that is not necessarily in line with the concept of brand value from a financial perspective, or even from a tax perspective. Their definitions of brand value can be quite different. That is one of the challenges to be considered.”

In his view, IP teams need to “reach out to those other corporate groups, exchange views, and discover these differences—not so much with the notion that we have to arrive at a single, fully comprehensive definition of brand value.”

Along with this, it is crucial that IP practitioners provide companies with data and adequate information via IP reporting. In addition, the Task Force is researching new developments in IP valuation that could herald some much-needed change.

“There is scope for improvement, especially when it comes to the inclusion of IP such as distinctiveness and trademarks in a financial valuation, as well as other elements that are mostly left out of current accounting approaches. That, in essence, is what we’re going to look at this year,” Mr. Vink explained.

A Lasting Legacy

The 2022 INTA President is determined that the Task Force will create a legacy for brand practitioners.

“Ultimately, we want to provide a framework for reporting that can be used by the company and produced by in-house counsel, but it can also provide the guidelines for the outside law firms that would help with IP reporting,” he said.

Indeed, for many brand IP departments already facing a plethora of deadlines, it could make sense to outsource IP reporting to external counsel.

“There are opportunities for law firms because in-house counsel could value the objective input from an outside party such as a law firm, which can deliver the analysis that will make their reporting credible,” reflected Mr. Vink. “I think there is a lot of potential work for firms and legal service providers in general, and it will be interesting to have their opinion on this topic.”

“There is scope for improvement, especially when it comes to the inclusion of IP such as distinctiveness and trademarks in a financial valuation, as well as other elements that are mostly left out of current accounting approaches.”
Zeeger Vink

Noting that the Task Force has been a highlight of his presidency, he said its work is the start of a new and exciting journey, and the contribution of members will be invaluable.

“We really value their input, and I hope we can have a fruitful dialogue and see where we can get to on this journey,” he declared. By engaging with the Task Force, practitioners will have an opportunity to change the perception of IP and its professionals, and to fully underscore the immense value played by IP in strengthening and building a brand, Mr. Vink said.

“I can only encourage others to become involved, and to use this opportunity, because it will bring a lot of benefits to brands,” he urged.

A Dream Realized

For Mr. Vink, being INTA President is the culmination of a lifetime’s ambition.

“It is a dream come true, to be able to lead this organization for this year. Meeting so many people from all over the world with such a profound knowledge of IP is truly inspiring,” he said.

For members with similar aspirations, Mr. Vink imparted some useful, sage, and timeless advice.

“Be active on committees and collaborate with others, and you will see that your view is not necessarily the only way of looking at things. That can sometimes be challenging and surprising, even disappointing,” he said. “But overall, you can learn a lot, and it will make you a better professional.”

As the world emerges from the grip of the COVID-19 pandemic, Mr. Vink believes that INTA has gained key insights and is primed for future challenges and opportunities.

“We’ve all learned a lot from this period, individually and on a company level, but also as an organization,” he said. For example, although INTA had not been able to have an on-site, full-scale Annual Meeting for two years, the Association successfully managed two virtual events, in 2020 and 2021, and in-person mini-conferences at last year’s Annual Meeting. In addition, even though INTA is hosting an in-person Annual Meeting this year, it decided to maintain the virtual aspects because “we have learned that it is an added value,” he said.

Concluding on a celebratory note, Mr. Vink emphasized that the uniquely optimistic mindset of INTA’s members bodes well for future growth, development, and collaboration.

“INTA is a close community. And maybe we realized this more acutely while we were apart physically,” he said. “We’re truly fortunate that the IP field has such a positive atmosphere, and that is something INTA is determined to foster, develop, and strengthen.”

Video courtesy of Envato Elements / belyaeva

New INTA Report

On Tuesday, May 2, INTA will be releasing a report on IP-related taxation issues in the EU, Switzerland, and UK that will provide valuable information for IP professionals. Entitled Report on the Taxation of Trademarks and Complementary Rights in Europe, it focuses on the importance of tax issues to the trademark practitioner and the impact of tax issues on the trademark lifecycle. It will be available online to members as an exclusive members-only benefit.

Monday, May 2, 2022

Published by: