Intellectual Property Management
Intellectual Property Rights, IPR Law
Companies can reap the benefits of smart intellectual
property management strategies as it competes in a global market. There are many things we
can't control in a business but we can control IP. Intellectual property management can
help a company to gain and sustain competitive advantage.
How the production and exchange of technology differs
from more traditional economic goods?
Since the year 2000 a lot of work has been done in the
area of Intellectual Property Rights (IPR) management. It is absolutely essential to
educate employees or partners about their rights and responsibilities regarding
intellectual property. Business or even an individual can achieve success through
development and marketing that takes due account of intellectual property rights.
Enforcing intellectual property rights is expensive in
countries around the world. It's important to get things right from the start. Just having
a patent isn't enough to protect an invention from the fierce competition of the market.
Success, for a large number of companies, has been driven
by the development of intellectual property. A company must invest resources in
intellectual property because the industry has become IP-intensive. Information
dissemination is rapid today calling for greater protection of ideas.
People are now aware of the importance of intellectual
property management and trade secrets protection. They no longer fear that their
competitors will have access to the information and copy it.
Managing intellectual property is absolutely important
for a company's growth and development.
Granstrand's comprehensive study examining IP use,
management and strategies in general, and in Japan in particular, is Economics and
Management of Intellectual Property (Granstrand, 1999b). In addition to the detailed
account and analysis of the results of his own survey of large Japanese corporations, the
author compares the Japanese situation and the strategies of large corporations in Sweden
and also occasionally in the US.
Granstrand's historical overview of Japanese patenting provides an enlightening
introduction to the subject. The Meiji dynasty opened Japan to the world in 1868 and
introduced a patent system inspired by the US and Europe 3 years later. The Tokugawa
dynasty introduced the Ordinance Prohibiting Innovations in 1718 in order to
prohibit new things.
Granstrand reminds the reader that with regard to the monopoly power conferred by patents,
an important distinction to be made is that a patent provides first of all a monopoly on
an input: (1) many other costly complimentary inputs may be needed before monopoly profits
are gained and (2) as with many inputs, a patent may be substituted by other patented or
For detailed observations on the semiconductor industry's IP management and strategies in
consortia - Tilton (1973), Ham et al. (1998), Grindley and Teece (1997) and Headley
Grindley and Teece (1997) provide a detailed account of the pro-active approach to IPR
management in Semiconductors and Electronics and specifically linking IPR to core
business, developing patent portfolios and the licensing practices of leading firms (RCA,
ATT&T, IBM, Intel, Hitachi, Hewlett-Packard, etc.). The article offers examples of how
leading companies managed IP and created patent portfolios, and how these were generating
royalty revenues from firms that had less to offer in exchange. The licensing strategies
were shaped by public policies.
The growing interest in the management of IP has resulted in efforts to improve its
measurement. IP performance is now measured in ways other than simple patent counts. The
emerging measures combine quantitative and qualitative aspects and enable organizations to
better evaluate and manage their patent portfolios Bratic et al. (2002).
Valuation of IP
One of the most important steps in managing IP is to establish its value. Valuation is the
process of ascribing value to technology. Valuation is particularly crucial for the
commercialization of early technologies, for licensing and for mergers and acquisitions
Probably the best sources on the valuation of IP in general are Razgaitis (2002), Smith
and Parr (1998) and Lamb in Simensky et al. (1999, Chapter 5) and Damodoran (1994).
Razgaitis recommends using multiple methods of valuation. Multiple methods produce value
or a coherent range of values that make sense from those multiple perspectives.
Managing of IP assets
The evidence of corporations being increasingly capable of extracting value from
intellectual assets is provided by the growing importance of licensing. This increase in
importance had, according to Manfroy (2002), the following consequences:
(1) Corporate vision changed and many corporations created the position of Chief
(2) Emergence of the Intellectual Capital Model. A model of a company from the
intellectual assets perspective that explains how the different pieces of a corporation
fall together, how they interrelate and their impact on a corporation's intellectual
assets and profitability.
(3) Attention is given to intellectual assets management.
(4) With the increasing importance of intellectual assets licensing professionals are
demanding increased remuneration.
Rajrathnam V P, Attorney/Advocate and IPR
Consultant - firstname.lastname@example.org