Editors Note: Caroline Horton Rockafellow is a member of the Research Triangle Park law firm of Daniels Daniels & Verdonik, P.A. TechLaw is a regular feature in Local tech Wire.
_______________________________________________________________________________________Intellectual property is the core asset for any technology-based company, and can be a critical asset for even the most non-technical of companies.
Venture capitalists look closely at intellectual property when evaluating investments. Companies spend millions protecting and defending intellectual property rights. Entire industries are based on the improvement of the intellectual property rights of others.
Yet, when it comes to educating our corporate leaders, we are woefully lax on the teaching of intellectual property management. Almost every business school and MBA program throughout the country includes courses on such things as business plan implementation, financial management and even human resource strategies, but very few include courses dedicated to the management of intellectual property assets.
At a time when we are faced with increasing competition from foreign lands and an increased pressure to speed development and enhance corporate value, we must consider if it is time to refocus our education, particularly the education of our future corporate leaders.
Intellectual Property Management — What Is It?
Intellectual property is generally defined as patents, trademarks, service marks, copyrights and trade secrets, but can also include other proprietary assets and creations of intellect with commercial value. Properly managed, these assets can be leveraged to not only create significant commercial value for the owner, but also to provide a negotiation tool in critical licensing transactions. Strategic management can also help to keep a company out of costly litigation and avoid wasted time and money spent on development of products that cannot be commercialized due to blocking technology.
Intellectual property rights can be lost in a myriad of ways. For example, if a company fails to timely file patent applications or trademark applications, restrict competitive activities of former employees, recognize competitive rights that restrict commercialization, effectively negotiate for third party rights in complementary technologies, limit sales employees from offering products for sale prior to patent filing, adequately secure consultant’s intellectual property rights, secure documents prior to termination of employees, keep adequate documentation, restrict incoming trade secrets or restrict disclosure of confidential information, then a valuable opportunity to increase corporate value through the timely and effective management of intellectual property will be lost.
Management of intellectual property requires the owning entity to establish policies and procedures related to all disclosures of confidential information as well as receipt of confidential information. In addition, it encourages processes to ensure that all research and development or any work product creation is performed under appropriate written contracts assigning the relevant work product to the company.
There should also be a standard review process to ensure that the company has taken the proper measures to protect all intellectual assets and the intellectual property manager should regularly coordinate with intellectual property counsel to review inventive efforts and strategize on patent, trademark and service mark applications. The intellectual property manager must also implement systems to ensure that patent and trademark filings and maintenance fees are made when appropriate. While not expected to understand all the nuisances of intellectual property law, an intellectual property manager does need to be trained to recognize the critical issues and seek legal counsel when appropriate, preferably before any key rights are lost.
A company that does a good job of effectively managing its intellectual property assets is better positioned to exploit the creative efforts of the company and avoid potential road blocks to commercialization. A company that does a poor job of managing its intellectual property is much more likely to minimize its intellectual property portfolio and be forced to rely on commodity technology with minimized returns. It also faces a much higher risk of being foreclosed from the ability to commercialize its own technology.
How To We Take I.P. Management Mainstream?
Only a handful of business schools have courses in intellectual property management and even fewer have any form of concentration in this area. While more business schools are providing courses on intellectual property, its definitions, scope and impact on the overall vitality of a corporate enterprise, the true value for business managers does not lie so much in the definitions, but rather in the understanding of what can be done from a management perspective to enhance, protect and exploit these assets.
So even in cases where we have provided our executives in training with sufficient background information on intellectual property, we have not done a good job of teaching these executives how to manage these assets in a way that enhances the value of their corporation. As the world becomes increasing competitive, it becomes even more important for our executives to understand this critical management issue. The arguments for taking Intellectual Property Management mainstream are strong, but the implementation is more difficult.
To get buy in from the nation’s business schools, it will be necessary to convince business executives that intellectual property management skills are as critical as financial management and human resources management, both of which are core elements of most business school curriculum. It will also be necessary to demonstrate that intellectual property management is not only relevant to technology companies, but, in fact, has bearing on the business interest of most every corporate entity. Take for example, the situation of a retail establishment. While retail is generally not considered a technical entity, it is nevertheless a corporate entity with intellectual property to manage. Such things as customer lists, pricing schedules, inventory management and systems, operational structures, training manuals and competitive analysis may all be intellectual property assets.
Failure to properly protect or maintain the assets could have significant negative impact on the business. Likewise, receipt of confidential information or proprietary materials from a competitor, particularly if such information or materials come in through the hire of a new employee who does not have the right to disclose or use such information, may also have significant impact on such establishment. While the intellectual property management issues are significantly more complex with a technology based company, they do exist and are relevant for even the most non-technical of companies.
Intellectual property is an asset that impacts almost every business establishment, yet few business executives are trained to either recognize this asset or implement policies directed to the protection and management of such assets. With increasing pressures from both inside and outside our country for companies to become more competitive, it only makes senses that corporations should reevaluate their internal systems for protection and management of this critical asset.
Not only must the corporate world take a new look at the management of intellectual property, but our nation’s business schools should be encouraged to move this course of study from the world of electives to the mainstream of study. Once intellectual property management becomes mainstream, we should begin to see significant increase in the exploitation and valuation of this most critical asset.
Daniels Daniels & Verdonik, P.A. has been serving the legal needs of entrepreneurial and high technology clients for more than 20 years. Caroline Horton Rockafellow is a licensed patent attorney who works primarily in the areas of technology deals and licensing. She commonly advises her clients in the area of intellectual property management. Questions or Comments can be sent to email@example.com