For a small shop, protecting IP value can present a daunting set of financial realities

Last week a Seattle news organization reported on graphic designers/illustrators who allegedly caught Disney with their hands in the unauthorized-use-of-copyrighted-materials cookie jar, only to face what IP Value Wire calls “willingness and wherewithal” to protect IP really means.

It’s a story valuators can file away to help explain the realities of IP ownership and value and how dependent that value is on the owner’s ability to defend it.

"Modern Dog," a book copyrighted by graphic designers Robynn Raye and Michael Strassburger, contains several sketches of dogs. A close look at the sketches shows remarkable similarities to illustrations of dogs found on t-shirts promoting Disney’s movie “Sharpay’s Fabulous Adventure” and sold domestically nationwide at Target stores. It was reported that “some [of the Disney illustrations] simply appear to have been flipped electronically so that a dog is looking left instead of right.”

Here’s the lesson: In order to fight what they consider obvious unauthorized use of their IP, the designers sued Disney, and in order to do that, Raye had to sell her house. It gets worse, as Raye says the suit now threatens to bankrupt the pair.

IP Value Wire has written numerous times about the direct relationship between IP value and the owner’s willingness and wherewithal to protect it. Analysts need to account for these factors when valuing IP. Sometimes a case study such as this can frame the question.