Book Review: The Intangible Investor

For the past 15 years I have been writing articles and commentaries in the hope of educating those new to the intellectual property world about the counter-intuitive characteristics that comprise the U.S. patent system. Intellectual property generally, and patents specifically, are among the most important assets most companies own. Yet the public knows little about the importance of employing an exclusive rights system for innovation, and most senior business executives and seasoned investors are befuddled by it. Their choices can cause those with more intimate IP knowledge to scratch their head in disbelief.

It will not come as a shock to observers of the U.S. businesses that manufacturing is no longer the focal point of the economy.  Indeed, the continuous trend is toward an innovation and technology-based economy where intellectual property rights, particularly patents, rule the day. To paraphrase Bruce Springsteen — the manufacturing jobs are gone and they ain’t coming back.

Prosperity in the United States is now almost completely tied to innovation, and a prerequisite to successful innovation is access to capital. The central theme of Bruce Berman’s new book of timely essays, The Intangible Investor, focuses on the issues surrounding our innovation economy: capital, valuation and leveraging IP for business advantage.  While are there are many sophisticated investors and business executives, the domain of intellectual property and intangible assets is very different from the bricks and mortar world that they inhabit. Unlike real estate, intangible assets are not scarce, can be infinitely replicated and wholly divided. That makes monetizing those patents that have value a formidable challenge.

This book is a collection of short, memorable articles that focus on teaching a particular issue or aspect of intellectual property, often dealing with patents.  Specifically, The Intangible Investor confronts head on the importance of acquisition and the myriad issues in play during licensing and enforcement proceedings. Berman’s approach to teaching through vignettes makes the material more approachable for diverse audiences and the patent system nuances easier to understand.

One of the most remarkable things about this collection is how these essays have weathered the test of time. While the 63 essays in The Intangible Investor stretch back to 2003, they are as relevant today as they were when they were written, which is a testament to Berman’s forward thinking and sophisticated understanding of the issues.

Illegitimate assertions?, written in 2004, starts by stating that: “Patent trolls have been all over the news lately… ” which is undeniably as true today as it was a decade ago. But even in these early days of the so-called patent troll problem, Berman was keenly aware that there was more than meets the eye, something that continues to elude many policy makers on Capitol Hill. He explained back in 2004 that the ability to assert patents is critical to any patent holder, but that large corporations with substantial patent portfolios were surprisingly vulnerable to being sued by holders who do no manufacturing themselves. Today, corporations still are unable to crack this code, rendering Berman’s vision both relevant and eerily prophetic.

Another example of Berman’s insight comes from a 2006 piece titled Skin Deep. Here he discusses patent quality, which has been an issue in the patent community with respect to software and information technology patents since at least 2002. It continues to be an issue today because patents issued in the era where quality was lower than it is today are still being litigated. In fact, the patents from this “low quality era” at the USPTO will still be litigated for years to come.

In Skin Deep Berman makes the observation that patent quality is not the same as patent value. Indeed, a patent can be quite valuable when the quality is very low (and worth nothing when it is high). In fact, some patent attorneys will try to secure claims that are very broad, knowing full-well that they are unlikely to survive. It is a strategy designed to secure both solid patent claim coverage while at the same time sprinkling in nebulous, ill-defined, perhaps even ridiculously broad claims which may cause other businesses problems. This is done because challenging a patent that has issued is expensive and for that reason and others pursuing litigation is often imprudent. It also means that with alarming frequency licenses are taken (and paid for) on patents that are of dubious meaning.

Regarded together the contributions in The Intangible Investor provide business people and investors interested in intellectual property, as well as IP professionals, with useful intelligence on how the industry works, and a historical context for what it means. The fact that the industry has yet to deal with the many thorny problems that began to surface just about a decade ago means these essays remain as fresh as they are informative. Those serious about obtaining a fuller understanding of the IP system will find it impossible not to come away from The Intangible Investor with actionable intelligence and a far better awareness of the issues, the first step in leveraging information for higher returns.

I wholeheartedly recommend this book and congratulate Bruce Berman for his long standing commitment to make the “intangible” IP system more intelligible and the environment for innovation more hospitable.


Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of Read more.

Join the Discussion

5 comments so far.

  • [Avatar for Bruce Berman]
    Bruce Berman
    April 15, 2014 01:33 pm

    Print edition is in stock and currently available. Digital next week.

  • [Avatar for ip guy]
    ip guy
    April 10, 2014 07:41 pm

    I had thought of that title. I don’t think that Graham had considered a companies’ IP portfolio when assessing a companies value and its stock price value.

  • [Avatar for Bruce Berman]
    Bruce Berman
    April 10, 2014 06:16 pm

    Gene may have meant The Intelligent Investor on his tag. The Intangible Investor is a play on Ben Graham’s seminal The Intelligent Investor, which many believe is still the seminal book on value investing 65 years after its initial publication.

  • [Avatar for ip guy]
    ip guy
    April 10, 2014 09:03 am

    The title for the blogpost is wrong, intelligent or intangible investor?