Xenith IP spinoff takes 'black art' out of valuations [IMG]...

Xenith IP spinoff takes 'black art' out of valuations
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Xenith IP managing director Stuart Smith says Glasshouse has a depth of IP expertise that the big four accounting firms do not have. Louie Douvis
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by Misa Han
Listed IP law firm holding company Xenith IP Group will launch a specialist IP practice, Glasshouse Advisory, to take on big-four accounting firms in the business of valuing companies' intangible assets.
Glasshouse will consist of 40 practitioners and will be competing with the IP valuation practice within the big four that have traditionally been major players in this area. Glasshouse represents a carve out of an existing practice within Griffith Hack and Watermark and will be led by David Hughes, former executive chairman of Griffith Hack.
Xenith is a listed company with a market cap of $175 million and acquired specialist IP law firms Watermark and Griffith last year, to build on its existing Shelston IP practice.
Glasshouse managing director David Hughes said IP valuation was traditionally seen as a "bit of a black art" and the advisory service will aim to put "rigour in the process" with the input of IP experts.
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ASIC is challenging businesses to be realistic about the value of their brands. Bloomberg
ASIC targets IP

The launch of the Glasshouse business comes as the corporate regulator Australian Securities & Investments Commission is calling on directors and auditors to use realistic assumptions in calculating the value of assets.
Mr Hughes said so far companies had used IP law "defensively" to protect the assets from competitors, but there were opportunities for companies to realise the full value of their intangible assets.
"Traditionally intangible assets are not properly reported in the balance sheet and as a result of that sometimes the value of those intangible assets are not fully understood," he said.
"So by looking at IP valuation, we start to uncover what the real value of those assets are."

Glasshouse will be competing with the big four accounting firms which have established practice in this area. For example, PwC has a specialist valuation practice of six partners and 50 staff nationally who focus on valuation of intangible assets, including IP.
Unique skills

But Xenith managing director Stuart Smith said Glasshouse will bring unique skills as traditional IP law practitioners.
"The biggest competition in IP valuation would be the big four accounting firms, but they don't have the depth of understanding that practitioners in Glasshouse can bring. They are used to dealing with technical accounting rules but they have no depth of understanding beyond that," he said.

"As far as we're aware there is no competitor with an equivalent suite of services in the market."
Mr Smith said although the Glasshouse brand is new, the practice has developed over the past seven or wight years within Watermark and Griffith Hack.
"One of the reasons for launching the standalone business entity [Glasshouse] is so that the services can be provided to all the clients of the group, not just within Watermark and Griffith Hack," he said.
He said he has seen growth in demand for IP valuation service from clients.

"Clients want to understand the value of their IP and look at commercialisation opportunities, not simply defend a case like they did 10 or 20 years ago," he said.
Mr Smith said Glasshouse is relatively small, representing between 5 per cent and 10 per cent of Xenith IP Group's revenue, but it is forecast to grow.

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