Two Sides of The Same Coin: The Commonality Between Great Intellectual Property Attorneys & Capital Investors That Businesses Should Care About

Two Sides of The Same Coin: The Commonality Between Great Intellectual Property Attorneys & Capital Investors That Businesses Should Care About

2021-03-31T16:34:51+00:00 March 31st, 2021|Deal Flow, Deal Flow Articles|

By Michael Katz & Paxton Lewis

J.D. and M.B.A. degrees represent a shiny bullet point on an intellectual property attorney’s or capital investor’s resume. But it is the capacity for continued curiosity and learning which provides the backbone for either’s success.

For IP attorneys and capital investors alike, education should not end upon receipt of a diploma; it should continue indefinitely. Continuing education should integrate continuously, changing business-specific information on both micro- and macro-levels with academically learned principles. An advanced degree is the foundation for so many other educational building blocks that are vital to successfully support a business’s ambitions. As professionals, we should acknowledge and accept that our roles require solving problems that were once not contemplated because, for example, the technology or the competition had not even existed until now. We should be responsible for learning about a business’s technology, acquiring a deep understanding of the business’s competitive industry and marketplace dynamics, and familiarizing ourselves with the business’s short- and long-term goals. It means fusing our business-, technology- and industry-specific knowledge with our academic backgrounds and our abilities to think outside the box in order to determine an avenue, or two, for a business to achieve its commercial objectives—all of which are motivated by our shared intellectual curiosity, where the competition-driven, dynamic marketplace represents the ongoing stimulus for this continuous intellectual curiosity.

It is this shared intellectual curiosity that inherently results in consistent commercial success when it comes to legal- or investment-based determinations. And it is this intellectual curiosity that represents an important commonality between a great IP attorney and a great capital investor. While there are certainly differences between IP attorneys and capital investors, the ultimate shared goal of furthering a company’s business objectives provides such substantial overlap in the foundational building blocks towards success so as to merge, or even conflate, the central characteristics to consider in selecting, or performing the role of a great IP attorney and a great capital investor.

The value of a business is not captured by its existence, but by the marketplace’s demand, current and projected, for its existence—something we anticipate capital investors to differentiate. And the value of IP rights derives not from simple ownership of a legally recognized, intangible asset but rather by the present and future exploitation of the exclusive opportunities that the IP rights might offer—something we anticipate our IP attorneys to differentiate. And this marketplace demand for a business’s existence and that business’s successful exploitation of its IP-based exclusive opportunities often represent two sides of the same coin that coexist as complimentary features—i.e., the expectations we hold for great capital investors and IP attorneys often complement each other. They each must have a holistic, analytically and empirically driven grasp of all the variables that feed into the moving picture that defines business success.

For example, IP rights provide strategic opportunities to obtain marketplace advantages over competitors by permitting the promotion of an exclusive feature that only the patent-holding business owns the right to control. So, the IP rights themselves can represent marketplace catalysts that open channels of opportunity to protect or gain a competitive advantage for the patent-holding business. And exploitation of those opportunities increases the value of the IP rights and consequently the value of the business. But the amount of capital expended on, or invested into, a business’s acquisition of and subsequent exploitation and/or protection of such IP rights should depend upon many factors, including the nature of the product and its evolution in the market, competitive nature of the industry, profit margins over the life of the product, consumer or commercial demand, leverage in the market, key relationships, overall business and financial objectives and the capacity of the business to execute on any plan. These are just some of the factors that great IP attorneys and capital investors will analyze when properly assessing the long-term value that will likely derive from a business’s technology in a competitive marketplace—a necessary assessment for one to consider when making an investment determination to further a business’s objectives and an equally necessary assessment for one to consider when making legal determinations regarding advisement to seek patent protection and recommendations to enforce continued patent protection.

Successful IP attorneys and capital investors share the necessary intellectual curiosity that jointly drives our overlapping legal- and investment-based determinations, which result in answers to questions such as: 1) how will a business likely benefit from the new technology or feature that a business intends to introduce and 2) will certain strategies (like acquiring IP rights) enhance a business’s aggregate value over the life of the business. Both determinations should consider a holistic approach that extends beyond myopic analysis and accounts for the unique value that IP rights offer individual businesses. Thus, it is important for IP attorneys and capital investors alike to understand a business as a whole, and the relevant markets in which it competes, in order to develop investment and legal strategies that enhance the business’s overall value, protect its IP rights, and accomplish its commercial objectives.

About Michael Katz & Paxton Lewis
Michael Katz (right), shareholder at Maschoff Brennan, litigates intellectual property and business disputes throughout the United States. Paxton Lewis (left) is a litigation associate at Maschoff Brennan.