Intellectual Property as Strategy

There are more reasons now than ever for a company to pay attention to its intellectual property (IP).

Companies are discovering they can create new sources of revenue by selling or licensing their IP; and others -- like BlackBerry-maker Research In Motion Ltd. (RIM) -- learned the hard way that if you're not protecting your IP, somebody else may slip in ahead of you. In early March, RIM settled a lawsuit and agreed to pay the patent-holding company Network Technology Partners $612 million.

The practice of patent trolling magnifies a company's need to protect its IP portfolio. The strategic use of intellectual property boosts a company's bottom line and helps it maintain a competitive edge.

Law Wire suggests that a company know untapped areas in its industry ripe for competitive advantage. To do that, a company assesses its industry's patent landscape by searching patent databases. Law Wire believes a companies that addresses the development, prosecution, protection, liability avoidance, revenue generation and enforcement of its IP will create a successful IP program.

To start, Law Wire recommends doing an audit of the company's patents, copyrights, trademarks, proprietary information and so forth to see how IP is being used. If your company doesn't need it, maybe somebody else does.

According to the World Intellectual Property Group, royalty revenue from the licensing of patent rights increased from $15 billion in 1990 to more than $110 billion today. Constantly monitoring the IP landscape will help identify such opportunities. Often companies can strike cross-licensing agreements and "trade" IP with another company.

One company spending a tremendous amount of time and resources managing its IP portfolio is software giant Microsoft Corp.

Atlanta-based United Parcel Service Inc. uses its IP to create additional revenue streams as well. The $36 billion logistics company realized there was a growing market for access to the technologies it developed that enable the company to connect 2 million sellers with 6 million buyers every day. The realization led to the creation of UPS Supply Chain Solutions, UPS Consulting and UPS Professional Services, among others.

Law Wire reports that lending institutions are granting loans to companies like Inovis based on the company's future cash flow. The companies then use the capital to pay shareholders. Rather than hunting down capital in more traditional markets, the company can spend its time and resources growing its IP portfolio.

Rodney D. Ryder