January 28, 2014
According to the World Intellectual Property Organization, intellectual property (IP) refers to creations of the mind such as designs, symbols, names and images used in commerce. It is protected by law in the form of patents, copyrights and trademarks, which allow people to earn recognition or financial benefit from what they invent or create.
But how does one go about placing a value on intangible creations such as branding? The answer is confounding and complicated, and it's simply a day in the life for 1989 finance graduate Phil Antoon.
The New Jersey native has worked at a number of firms throughout his nearly 25-year career, but at every firm he has pursued the same type of challenging work: valuation.
Antoon currently serves as Managing Director for Alvarez & Marsal Valuation Services in Manhattan. There, he uses his extensive experience in intellectual property to provide fair market value on a number of intangible assets including customer relationships and contracts, patented technology, trademarks and trade names, proprietary know-how, in-process research and development, franchise agreements, oil and gas reserves, mining reserves and communications licenses – just to name a few. He even valued the rights to the most celebrated and sought-after award in American collegiate athletics – the prestigious Heisman Trophy.
"There are a myriad of different types of intangible assets," Antoon explained. "The need to value intangible assets stems from a variety of purposes. It could be for tax purposes, financial reporting, lending, or buying and selling intangible assets, for example."
"From a financial point of view, in valuing a brand we're trying to figure out how much someone will pay based on the future income generating capabilities of the products or services that are driven by the brand," he said.
In order to figure out what people are willing to pay, extensive market research is conducted, including past and future financial performance of a company, the legal ownership rights associated with the IP, the profitability of the products/services that utilize the IP, the growth of the overall industry, how that particular company fits within the industry, the geographic regions that the company operates in, as well as the overall economic landscape.
"One interesting part of valuation is that you have to look at so many different factors at the same time. For me, that's definitely an enjoyable part of valuing intangible assets," Antoon said. "It's one thing to say, 'I think the fair market value of a company is X dollars.' (In that situation) there's some indication of value available because you can look at the stock market and work with implied valuation multiples that can be applied to the company you are valuing. But you don't have an active market for intangible assets, not to mention that you have to understand the interplay between the trade name, the patented technology, the relationships you have with your customers, and any other intangible assets. Each one has a different value driver."
Globalization and technology have changed the landscape in the field of finance since Antoon began his career, both in regard to the way work gets done and the type of work that gets done
"I have seen huge differences in efficiency for completing work relative to when I started. I look back and laugh and wonder how we got work done way back when. The ability to email back and forth globally gives you instant access to communication and data," he said, noting an example of the shift from physical data rooms to virtual data rooms.
"(We now have) the ability to gather data at a moment's notice. It has made our job much, much more efficient than it used to be," he said.
Antoon said what gets particularly interesting is conducting analyses for global companies, where various entities within a company each have specific rights.
"Often what I'm doing is splitting value amongst legal entities. For example, one entity may have the rights to manufacture the product. Another may have all the IP rights," he said.
Although technology and the commercial globalization that has followed it have made his work more interesting and much more efficient, Antoon said it has also led to a great deal of controversy in the field of IP.
"It's kept us very busy," he said. "I'd argue that IP migration is one of the most contentious issues (in the field) right now. That's movement of certain IP rights to a non-U.S. company. This is a topic that's being very hotly debated within taxing authorities and governments worldwide."
But every job has its challenges, and Antoon enjoys the ever-changing landscape.
"I think it's exciting that you always have to be on the lookout for changes and how they affect what you do. You have to be fast to react to those changes. That, to me, is an exciting part of the job. That (is something that) I really look forward to," he said.
Antoon felt his education at B&E laid a sturdy groundwork for his career in finance.
"I always felt that I received a practical and pragmatic output from the professors," he said. "They took a real world approach that really prepared me when I started in the workforce to jump in on day one and have a good feel for what was going to be expected of me," he said.
Antoon said he had several reasons to leave his New Jersey home and become a Mountaineer. He was offered a scholarship and invited to play on the men's soccer team, where he could enjoy his sport with superior athletic facilities. He knew he would receive a promising business education. He was also influenced by his father, Ferris Antoon, who was a very proud Mountaineer and is a member of the Hall of Fame at the WVU School of Physical Education.
"The first time I went (to WVU) for a recruiting visit, there was a level of comfort above and beyond the others," he recalled. "Even to this day you feel part of the WVU family."