“This Is Mine”

In 1755 Jean-Jacques Rousseau wrote one of the most quoted sentences about property ever put on paper. He said that the first man who enclosed a piece of ground, claimed “This is mine,” and found people simple enough to believe him, was the true founder of civil society. He went on to list the crimes, wars and miseries that might have been spared if someone had pulled up the stakes and told everyone not to listen.

Rousseau meant it as an accusation. I have come to read it as a description of how ownership has always worked. A claim of ownership is a story told to other people. It becomes real when they accept it and it stays real as long as they keep accepting it. A fence helps. So does a deed, a court, a registry, a lock. But underneath every one of those is a shared agreement to treat the claim as true.

For most of history, the things people claimed were things you could put a fence around. That has changed more quickly and more completely than we tend to notice.

A company you cannot walk through

Fifty years ago, the value of a large American company was mostly something you could tour. Ocean Tomo, a firm that has tracked this for decades, estimates that in 1975 tangible assets (property, plant, equipment, inventory) made up about 83 percent of the market value of the S&P 500. By the end of 2025 the relationship had inverted. Intangible assets accounted for roughly 92 percent.

That means that most of what a modern company is worth consists of things we have collectively agreed to believe in: software, data, patents, trademarks, know-how, relationships, a brand, a reputation. None of it can be fenced. Almost all of it depends, in Rousseau’s sense, on other people continuing to accept the claim.

The economists Jonathan Haskel and Stian Westlake, in Capitalism Without Capital, describe what makes intangible assets strange. They scale, because a piece of software or a recipe can be used a million times at almost no extra cost. They are sunk, because you usually cannot sell half a brand or the know-how of a departed team. They spill over, because ideas leak to competitors and imitators. And they produce synergies, because they are most valuable in combination with other intangibles. Every one of those properties makes ownership harder to establish and more important to get right.

We know more than we can tell

The philosopher and chemist Michael Polanyi offered a sentence in 1966 that I think about whenever someone describes a company’s “IP” as a list of filings. “We can know more than we can tell.” Much of the knowledge that matters most, he argued, is tacit. It lives in practice, judgment and habit, in the hands of the person who knows how to do the thing and much of it cannot be fully written down.

This creates a quiet paradox at the center of the modern economy. The most valuable knowledge a company has is often the least documented. And the law, which needs things to be defined before it can protect them, can only partly reach it. A trade secret, for instance, is protected only if the company has taken reasonable measures to keep it secret. Access controls, confidentiality agreements, sensible internal practices: these are what turn valuable know-how into something a court will recognize as an asset. Without them, it is merely something people happen to know, and they are free to take it with them.

I trained as a cultural anthropologist and one of the useful things anthropology teaches is that intangible property is not new at all. Among the peoples of the Pacific Northwest coast, names, songs, dances and crests have long been owned as hereditary privileges. They are displayed, validated and transferred in public ceremony, and the community’s witnessing is part of what makes the ownership real. The potlatch, so often described by outsiders as a feast of wasteful giving, is in part a legal institution: a public recording of who holds what. The idea that a song can belong to someone and that a gathering of witnesses makes it so, would not have surprised anyone there. It is our own era that briefly forgot how much of what we own is made of agreement.

Diligence is a title search

Founders often picture intellectual property review as a count of patents and trademarks. Sophisticated investors and acquirers look at something closer to a title search on a house. The question is not how much you have. It is whether you can prove you own it and whether anyone else can take it away.

The first question is ownership. Did every founder, employee and contractor who contributed to the core product sign an agreement that actually transfers their work to the company? Did anyone build an early version while employed elsewhere or while affiliated with a university that might claim an interest? Gaps here are common and usually innocent. A friend helped with the prototype over a long weekend. A contractor was paid on an invoice that never mentioned ownership. These gaps are much cheaper to close before a term sheet than after one.

The second question is dependency. Nearly every software product includes open source components and some open source licenses carry obligations that can affect how the product is distributed or whether proprietary code must be disclosed. This is one of my favorite corners of the subject, because open source is a gift economy operating inside commercial software. Marcel Mauss observed nearly a century ago that in many cultures a gift carries obligations with it: to receive and to give back in turn. Some open source licenses encode exactly that logic. You may take the work freely, but if you pass it on, you must pass it on on the same terms. The gift travels with its conditions. Investors want to know that a company has read the conditions attached to the gifts it accepted.

The third is freedom to operate. A company can own its technology outright and still infringe someone else’s rights. Nobody expects a young company to clear every conceivable risk, but a buyer will want to see that the obvious ones were considered.

The fourth is the protection of what is not patented, the tacit and the secret, which brings us back to Polanyi. Know-how that is genuinely valuable has to be treated as valuable or a court will not treat it that way either.

For companies building with artificial intelligence there is now a fifth question and it is often the first one asked: what data was the model trained on and does the company hold the rights to use it that way? Recent court decisions have made clear that where training material came from and what the resulting system does, can decide whether its use is lawful. A model built on data with an unclear history is a house with a cloudy title.

Most of what a modern company is worth consists of things we have collectively agreed to believe in.

A portfolio should follow the money

A long list of filings can look impressive and say very little. The more useful measure is whether a company’s intellectual property lines up with how it actually makes money.

That means protecting the features customers pay for, the processes that make the product hard to copy and the brand customers recognize. It also means deciding early what the portfolio is for. Some companies need defensive coverage so they can operate without interference.

Others want licensing options that could become a line of revenue. A company that hopes to be acquired should think about which parts of its intellectual property a likely buyer would value most and make sure those parts are the cleanest.

Done well, this turns intellectual property from a legal expense into part of the investment case. An investor can see what is defensible, why it is defensible and how that defensibility supports the growth story they are being asked to fund.

How the problems surface

In mergers and acquisitions, intellectual property problems rarely kill a deal outright. More often they change it. A gap found late in diligence tends to show up as a lower price, a larger escrow, a special indemnity or a delay while the parties track down a former contractor for a signature he has no particular reason to give. Each of those outcomes moves value away from the seller, for a problem that could usually have been fixed quietly years earlier.

I spent roughly twenty-four years as a litigator and counselor, much of it in intellectual property and technology disputes. Litigation offers an unusual vantage point on all of this, because it is where ownership claims, license terms and confidentiality practices finally get examined in full detail, usually long after the people who set them up have moved on. What I saw again and again is that the problems that surface in a dispute or a deal were created years earlier by people who never expected anyone to look closely. The fix at the beginning is usually a signature or a policy. The fix at the end is usually a negotiation and you are negotiating from the weaker side of the table.

The companies that move through diligence smoothly are not necessarily the ones with the largest portfolios. They are the ones that can answer ownership questions quickly and with documents.

A short checklist for anyone planning to raise or sell

Confirm that every contributor to the core product has signed an assignment, including founders and early contractors.

Keep a current inventory of open source components and the licenses that came with them.

Document how trade secrets are protected, not just that they exist.

For AI products, record where training data came from and on what terms.

Align the filing strategy with the parts of the business an investor or buyer is most likely to pay for.

None of this is glamorous. It is the work that lets a company’s most valuable assets be counted as assets when it matters most.

Enclosure, then and now

Rousseau was writing in a century when English landowners were fencing common fields that villagers had grazed, gathered from and farmed together for generations. The enclosure movement turned shared land into private property, parcel by parcel, act by act. It made agriculture more productive in many places. It also displaced a great many people who had relied on rights that were real but unwritten, rights held by custom rather than by deed.

Something similar is happening now to the open web. For a quarter century, people wrote and shared an astonishing amount of material in public: explanations, reviews, code, fiction, arguments, answers to strangers’ questions. Most of it was given in something like the spirit of a commons. Nobody expected to be paid; many hoped to be read, cited or helped in return. That body of shared work has turned out to be the raw material for training artificial intelligence and the question of who may use it, on what terms and who benefits is being settled now in courtrooms, licensing deals and changes to websites’ terms of service. Publishers are putting up fences. Platforms are selling access to what their users wrote. Some creators are withdrawing their work from public view altogether.

The political scientist Elinor Ostrom won the Nobel Prize in economics for showing that commons are not doomed to tragedy, as an influential 1968 essay had claimed. Communities around the world have managed shared resources sustainably for centuries using rules they designed themselves: clear boundaries, ways to monitor use, graduated sanctions and forums for resolving disputes. Ostrom’s work suggests that the choice is not simply between an unregulated free-for-all and private enclosure. There are other ways to govern shared things, and they tend to work best when the people who contribute have a say in the rules.

I don’t know how the commons of human writing will be governed in the end. I do think the outcome will shape, for a long time, how people feel about contributing to it. If the answer is that everything shared in public becomes free raw material for whoever has the largest computer, people will share less. If the answer is a thicket of fences, the commons will wither in a different way. The interesting work, legally and commercially, is in the space between.

What remains ours

I want to end on a question that goes beyond the deal room, because the rise of intangible value is not only a story about balance sheets.

We are entering a period in which machines can produce a passable version of almost any style, voice or format in seconds. When the surface of a thing can be generated cheaply, the claim “this is mine” has to rest on something deeper than the surface. I suspect it will rest increasingly on the things that are hardest to copy: provenance, the documented history of where something came from; tacit knowledge, the judgment that lives in practiced hands; relationships, which exist only between particular people; and reputation, which is built slowly, one honored commitment at a time and is perhaps the most intangible asset of all.

Rousseau worried about people who were too simple to question a claim of ownership. The modern risk runs the other way. In a world where most value is invisible, ownership depends on a great deal of trust: that the paperwork is real, that the know-how is genuine, that the history is what it purports to be. Trust of that kind cannot be fenced. It has to be earned and then kept. The companies and the people who understand that will find that the invisible things they own are the ones that last.