The changing face of intellectual property: intellectual property--n. A product of the intellect that has commercial value, including copyrighted property such as literary or artistic works, and ideational property, such as patents, appellations of origin, business methods and industrial processes.

• Author: Millman, Gregory J.

When even the trash man has an intellectual-property strategy, and technology companies give away their patents and record companies scrap the digital controls that prevent people from copying music, something has clearly changed.

Intellectual property (IP) strategy isn't what it used to be. Congress may be on the verge of making the most dramatic changes the patent system has seen in decades, possibly in history--and this comes in the wake of recent, precedent-rocking Supreme Court decisions that made patents harder to get and defend. Technology has changed the game for copyright owners, who increasingly recognize that they have more to lose than to gain by defending their ownership claims.

New business models are emerging in a wide range of industries, as companies discover that opening up and even giving away proprietary information can be good business. These changes bring more choices, more complexity, more risk and, often, more opportunity to businesses driven by IP--and these days, more and more businesses are so driven.

Consider the case of Casella Waste Systems Inc., a Vermont-based disposal and recycling company with $300 million in market capitalization, $550 million in sales and an IP strategy unique in its industry. "We embarked on an IP journey some years ago, and it has a deeply changed our business model because it forced us to look at everything we do through the innovation lens," says President and CEO Jim Bohlig.

The journey began with a subsidiary called US Green Fiber, which converted old newspapers into home insulation. Before innovation, "the only differentiation between it and the competition was cost: it was cheaper than fiberglass," Bohlig says. But closer examination of the product discovered anti-fire, anti-sound and other deadening attributes that provided an opportunity for innovation, differentiation and new applications.

"We'd done the same thing in our waste business in much bigger ways," says Bohlig. "We probably have the largest intellectual property portfolio in the industry, including companies that are many times our size. That means published patents filed patents, trade secrets, the whole family of intellectual property, including trademarks. It introduced us to a whole new way to think of strategic planning."

For example, publicity about Wal-Mart's decision to require radio frequency ID tags on merchandise "led us to wonder what we could accomplish when the product is given back to us as waste. This got us involved in making an equity investment in Recycle Bank, a revolutionary business model for providing incentives and rewards to people who recycle."

John Cronin, managing director and chairman of the IP Capital Group, an intellectual-property advisory firm, says, "You have a very distinct competitive advantage if you do [IP] strategically. However, most companies don't have an IP strategy documented at all. If they do, there's rarely a process to implement it--and rarely if ever a policy of continuous improvement."

Cronin emphasizes that an IP strategy must have a stratagem--a clever trick to keep the competition guessing. His firm has compiled a catalog of approximately 100 different strategic objectives or end states, and eight or nine possible stratagems for each.

One of the more aggressive is called the Pied Piper. "You invent something and file for a patent as soon as you can, then tell everybody about it in a lot of detail--but don't tell them you patented it. Everybody starts copying you, but three years later your patent issues and you've got them--you're like the Pied Piper playing the flute and getting the rats in the river."

Another tactic, called "Trojan Horse," involves distributing an invention to the open source community, but patenting an improvement to the invention, so that anyone else making the improvement will fall under the patent. However, getting patents is only part of the IP strategy. In some cases, Cronin says, it's more economical to publish instead of patenting.

"When you publish something, the minute you publish it, nobody else in the world can get a patent on it...