Corporations Going “Soft” in a Rush

A quiet revolution is taking place which is so staggering in its impact on business, that even the Internet and E-Commerce are but manifestations. It is the dramatic jump in the asset infrastructure of corporations from fixed and tangible ("hard") assets to IP (intellectual property) assets and other intangible ("soft") assets.

The surge of the Internet companies to prominence, many with negligible hard assets, is but a reflection of this phenomena. Microsoft, Pfizer, and Hewlett Packard are but a few major "Old Economy" companies whose asset value is 95% or more intangible. This cataclysmic shift from hard to IP and other soft assets is having a profound impact on the way companies must manage their businesses to survive.

In spite of these remarkable statistics, many companies continue to spend 80% of their time and resources managing the tangible assets which represent 20% of the company’s value. Why? The answer is complex, but lies, I believe in three factors:

1. Managers have little training, education, or experience with intangibles, and
2. The IT and IMS systems in place in most companies are structured to produce information on the company’s tangible assets. Without information on IP assets, the perception often is “What’s to manage?”

This must change. Those companies that learn to manage their IP and other intangibles will most surely prevail in the New Economy.

Do any of these questions give you concern?

IP a Driving Force

Are you making the best and highest use of your IP assets? Are you acquiring through internal R&D, license, purchase, swap, contract development or other means the gap-filling IP you need to achieve your business goals? Are you using IP assets in every way possible to penetrate markets, maximize margins and market share, and otherwise boost stakeholder returns?

IP Inventory

Do you even know in any detail what IP assets you possess? Often the most valuable technology or other IP is disguised or hidden in a software program, process or product feature, or even a service. Untrained eyes seldom see the true advances that later turn out to be of great value. Is your business model based upon a new business method that could and should be patented - - not just in its primary manifestation, but in the more subtle details that may ultimately prove to have the most value? The place to begin an IP management program is with an audit of all key intellectual properties. I can assure you from past experience that you will very surprised at what will be found if the audit is performed competently.

Innovation

Are your processes for generating a rich flow of fresh and market-worthy innovations efficient and effective? Are your processes for acquiring current and relevant information from customers and about competitors supplying you with the knowledge so critical to the development of viable new products and/or services?

Right to Use

Are you concerned that your new product or service may be infringing a competitor’s patents? Do you lack clear guidance on how to determine what patents might be a problem, how to design around problem patents, or when and how to buy or trade or otherwise maneuver for the rights you need, if that is necessary.

Your Own Patents Being Ignored by Competitors

With ever-shortening time-to-market demands, inevitably we put our heads down and drive to meet schedules. If we knew where and how to look, we might find that our hard-won patented technology is being appropriated by others.

Licensing Revenue

Are you sitting on innovations worth millions of dollar that could be monetized to boost your bottom line? Often revenues can be generated by licensing your technology in applications that you will never have the resources to pursue within the reasonable expected lifetime of the technology. The world is a big place, and the applications are many. Perhaps you can cash in those you can’t exploit. (Please click here for more information in this web site specifically devoted to IP asset licensing.)

These are just a few issues that are embraced by IP management processes. Every company today must begin to develop processes for acquiring and managing IP for improved business performance.

IP assets must be viewed today as one of the most powerful tools for meeting business objectives. IP management is not just about obtaining patents most efficiently, for example. Rather it is about the process by which IP assets are used to drive business solutions. For example, if the economic model leads to a conclusion that for a certain business to be viable, adversely held technology must be obtained, then IP management necessarily entails an analysis of the best way to acquire that technology. Buy the company? Buy or license the patent? Buy or license the technology? Work a joint venture or alliance? Use your related or unrelated IP or other assets or power to leverage a swap for the needed IP? Perhaps three or more parties or needed to make it happen.

The possibilities are limited only by the imagination.

IP is very powerful if you know how to use it! Look how Amazon crippled Barnes and Noble in the critical 1999 Christmas season by obtaining a temporary restraining order based on its “One Click” patent. If indeed 80% of a typical company's market value is embodied in its IP assets and other intangibles, it behooves every company today to maximize the performance of those assets to survive and be profitable.