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The Intellectual Property Management Stage

AN IP ECONOMY

I am tempted to call it the IP1 Economy. At first, this may seem frivolous, given that IP is a knowl­edge-based asset and hence the term knowledge economy should suffice. But that is inaccurate for two reasons. First, IP, though knowledge based, draws its power not from the knowledge it pro­tects (despite its critical importance) but from its capacity as a competitive and marketing tool. Repeatedly, whether it is a patent, a trademark, or a copyright, IP is enabling organizations to enter and create new markets, and to block competition from gaining a strong hold in certain mar­kets. Indeed, IP is at the core of competitive performance in any industry.2 Second, the value of IP can be measured with greater certainty than any other intellectual capital (IC), given that IP is the most tangible of the intangibles. As a business asset, the value of IP to a business (a patent, a brand, or a copyrighted work) can reach hundreds of millions.

On the macroeconomic level, the effectiveness of a country's IP system is a determining fac­tor in its economic performance.4 In the United States, patenting activity rose dramatically a few years after the establishment of the Federal Circuit in 1986 as the court of final review for cases involving patents and copyrights, which made a murky area of law more predictable. The same is true for copyrights, where copyright industries have been growing at rates exceeding the national gross domestic product (GDP).5 Furthermore, reform in trademark law with stronger protection of famous trademarks and measures against cyber squatting6 encouraged huge investments in brands, making American brands the largest U.S. export.7 Globally, the technological prowess of countries is increasingly being measured by their patenting activity, research and development (R&D) investments, and the strength of their software industry and brands.

Surprisingly, despite the strong impact that IP has on the performance of an economy and on the success of an organization, IP is generally viewed as a legal instrument that protects a tech­nology, an expression, and a mark or proprietary information. It is true that IP is a legal creature, but behind all its legal charm IP is a powerful competitive tool and a valuable business asset. Independent of its legal identity, and from the product or process it was originally acquired to protect, IP can be commercialized as the "product." Appreciating this is the key to viewing intel­lectual property management (IPM) as the stage at which the value created at the knowledge management (KM) stage, then extracted at the innovation management (IM) stage, is maximized to the optimal level. That is the goal and function of IPM under the Comprehensive Intellectual Capital Management (CICM) model.

Though IPM is not new, the IC concept transformed it from being a legal affair to becoming engrained in the management of business as a whole. Before exploring how, we will first briefly outline how IPM programs developed.