"Show me the money!" was the theme of this morning's opening session, chaired by Ben Goodger. Ostensibly this was to be a heavy session on tax, valuation and other grimly serious issues, but it turned out to be an agreeably pleasant one.

Speaking first, Neil Hobbs (an in-house IP lawyer with Virgin Enterprises, London) offered to contribute some of Virgin's business experiences regarding the commercialisation of its brand through licensing and other devices. Neil examined the 'building blocks' behind the apparently random deployment of the Virgin brand. The company's expertise lies in the field of "brand venture capitalism", investing its brand as an asset in joint ventures where others provide the money. This establishes licence royalty-based income streams, all based on the same themes: customer service, shaking up existing markets and providing the promise of some fun. But all Virgin's ventures are tax-driven too, seeking to avoid the triggering of "major tax events". Since the licences are underpinned by trade marks, Virgin has a substantial trade mark portfolio, with some 3,000 registrations worldwide, covering a wide range of goods and services.

Licensing must be a fluid art, since it's difficult to futureproof a licence in the face of technological convergence; definitions that provide bright lines when conceived can become obsolete. Virgin remains in danger of granting overlapping licences, a danger that must be carefully guarded against -- whether the licences are exclusive or non-exclusive.

A trade mark licence is a working document that drives a business, Neil said. It shoild not be filed away once concluded, but kept visible and revisited -- and if necessary amended -- where necessary. Virgin likes to work alongide its licensees rather than take the role of a distant licensor. The key is to establish a good business relationship, right from the word go. Vast importance is played on licensees' performance indicators, particularly regarding licensees' customer service standards.

Next to the podium was Mark Bezant (LECG), looking at the financial aspects of branding from a tax-structure expert's view. People often look for benchmarks, he noted, seeking guidance on royalty rates: this is the wrong approach. More important is to look first at exactly what is being licensed and where the income from the brand is coming from. This can be tricky, since legal and marketing terminologies and concepts can make for misunderstandings and it's not always clear, where a package is being licensed, where its value lies. Also, the royalty rate is not the thing that drives the licence; it's a consequence of it.

The licence terms have to recognise the realities: a licence is a scheme for sharing the risks and sharing the rewards and its terms should reflect this. There is no "going rate" in a market in which some licensors continue to develop and publicise their brands heavily following the licence, while others do not. Licence terms will have an impact on such things as corporate financial reporting requirements and tax provisions, as well as IP valuation and securitisation. There are also special provisions relating to transfer pricing in licences between different companies within the same group. All these issues should be addressed before risk allocation and royalty rates are determined.

Mark next ran through the various techniques listed for the valuation of brands, reminding the audience that caution remains necessary because there is no one solid formula for assessing the value of a brand and, therefore, what is worth paying to use it. Transferring a rate from one royalty base to another can be fatal: low-cost fast-moving consumer goods and passenger trains, for example, are made in sold in vastly different markets and royalty rate-driving similarities between them are likely to be non-existent.

The final speaker at this session was a surprise: fragrance company Coty SA CEO Bernd Beetz flew in to give a view of his company's experiences. The company's sales have quadrupled in the past seven years through the creation of new brands, he said, and Coty is determined to protect them since they are the company's life blood.

Coty tries to create global franchises when developing its brands, taking account of affinities with local trends and local markets. All the global teams are headquartered in New York, to keep as close as possible to the trend-setting local market there. The company originated the concept of the celebrity scent, rather than just using celebrities as add-ons for marketing their original products. David Beckham, Celine Dion and Jennifer Lopez are all examples of this phenomenon. The product and its packaging have to reflect the character and personality of the celebrity concerned, as well as the Zeitgeist.

Like Virgin, Coty expects to work closely with licence holders, looking for celebrities to remain involved rather than just donating their names to a product at the end of a distinguished career and then going away. Bernd explained that Coty also places great importance in getting products speedily into the marketplace, ahead of competitors -- though market execution and point-of-sale presentation is also vital if it is to promote, inspire, educate and motivate the consumer. This requires research into consumers themselves, rather than on the products themselves. Consumer research is a major expense in this sector.

Bernd finally addressed the protection issue. Brands are registered, products are coded and Coty is ready to take action wherever necessary in pursuit of the integrity of its products and their markets, he affirmed.