Right. In the 80’s, the term ‘vaporware’ floated around the computer industry.
KOSSOVSKY: Yes.

Developers would float trial balloons of products for years before there actual introduction.
KOSSOVSKY: Brilliantly.

Yes. Effectively to the point of warding off competitors who were intimidated by the prospective product. Anticipating this product, the end user base would avoid buying other brands. That practice dissipated. Upfront companies like Google, frequently release beta-version products, effectively saying “here is what we’re working on right now, yes, it will be refined.” This is a totally different approach from promoting vaporware. I guess it all comes down to still being PR, in some ways, but corporate behavior seems to be much more of a factor now.
KOSSOVSKY: It has to lie with the evolutions in culture. Microsoft was able to leverage the intangible and, in effect, is a monopoly with great credibility. So they’re signaling what was really a leverage of their intangible, their market product. Google knows it doesn’t have dominance in the market and that dominance can slip. They know that today companies can’t afford to have a reputation of error. Google’s a reputation company, so they’re very, very careful about managing that reputation. They don’t raise expectations beyond what they believe they can deliver. In the current environment, that would not be tolerated.

We started off talking about the beginning of companies paying attention to intangible assets, around the ’70s, and now it’s at its peak, I believe was your statement. Where does it go from here? Where do you see your segment of business going?
KOSSOVSKY: Well, we see our business focusing on the risk side of it. Companies can do a lot, become superior managers, and with the promulgation of best practice standards, we see companies getting really good at it. There still is the risk issue. And to the extent that companies saw a building or a fleet being primary assets that you protect as a source of revenue. Today the source revenue are the intangible side of things. We see those being things that we need to protect. So insurance, this transfer insurance and things related to that, really is the heart of what we’re value-wise focusing our efforts. Even in recording the value of the patent sale, the risk of that becomes an issue for accounting. That risk can be removed for insurance to allow simple accounting. We sold that for a dollar, we mark a dollar. Right now, you sell it for a dollar, but there’s a dollar liability on the books at the same time.

And when do you see more standards, more measurability instruments designed to help the industry becoming available?
KOSSOVSKY: There’s a huge push on all fronts right now in that area. There’s a best practices sustainability draft protocol that’s been circulating for the last year or so. The first draft was issued in the year 2000. There are best practices for security, a number of safety practices out there right now. I haven’t seen an intellectual property one yet. A lot of things right now are popping up because there is a growing recognition that “best practices” are useful management tools.

And who’s driving that?
KOSSOVSKY: It’s a global effort…

No particular country in the forefront?
KOSSOVSKY: I’d say the Japanese are probably the least involved only because they have a more informal but extremely efficient culturally-based method within Japan of disseminating “best practices.” The Europeans and the U.S. are very active through the International Standards Organization and its respective national affiliates. The Japanese less so because they tend to have the notion that best practices that work for Europeans and Americans may not work for Japanese.

Where’s India? Where’s China on these issues? China’s economy is on fire. Their GNP is 10% or 11%. Are they active participants? Are they driving anything regarding best practices, regarding intangible assets? Is that something you’re familiar with?
KOSSOVSKY: I have no idea. I have no insight into what the Chinese or the Indians are doing currently. I really can’t comment. I know that we have not had an opportunity to reach out or connect with them. But clearly, the Chinese have recognized that quality; at least quality and safety are major issues. In the insurance industry, when you want to put a claim against somebody, you subrogate. Their subrogation rights tend to be very heavy handed. So I suspect, that given that, they are excellent students of best practices. And they won’t be far behind. They will be part of the game. They’re not used to outsiders yelling at them. They’re wrestling with that.

Well, what we’ve advocated, both as a company and as a society, is that the most important thing for companies to do is to better manage — I should say is to focus on increasing the value, to protecting, and ultimately focusing on strategies to restore the value of intangibles, should things happen. In order to that, they have to first recognize that intangibles are the principal drivers of the value of the economy. That’s the overall story. Everything after that is a derivative. But it must start at the top. Like quality management, like environmental sensitivity, like these major global enterprise-based issues, they are top-driven, philosophically. But they are obviously implemented and effective, and dependent on the lowest levels of the company to work.