The high stakes of IP management.

• Author: COLSON, THOMAS J.
• Position: Intellectual property

Board leadership is becoming more involved in the intellectual property area because the consequences of IP mismanagement can be devastating to a business.

BOARD MEMBERS have always been called upon to offer a broader perspective of the economic landscape. Understanding and acting upon the wide range of economic drivers is critical for corporations to survive and prosper. One critical factor, albeit often overlooked until recently, is intellectual property (IP) management.

Many technology and research-intensive companies have been actively managing their IP for decades. However, the extension of IP management to the general business marketplace is just beginning to be realized. IP is increasing its presence on corporate balance sheets, impacting shareholder value both indirectly via revenue generation and directly via the high intrinsic value placed on powerful IP. If managed with diligence and savvy; IP can be a strategic business tool that offers tremendous authority in the economy, both today and in the future. But if it is overlooked, a company's IP is left dangerously exposed and can be easily exploited by competitors in the patent-frenzied market here and abroad.

For decades, intellectual property has been part of the equation for mergers or sales, licensing, and even staffing. Until recently, it was controlled by a specialized group of attorneys -- the only ones who understood IP. However, its prominence in today's economy has changed that, with IP management moving from the IP counsel's office to the boardroom.

Executive leadership is becoming more involved because the consequences of IP mismanagement can be devastating to a business. Roger L. May, general counsel, president, and CEO of Ford Global Technologies Inc., affirmed that position in a recent Corporate Legal Times interview, where he stated, "There is no difference between being a good intellectual capital officer and being a good businessman."

Note the tremendous growth in patenting that we are experiencing today. An overwhelming 169,094 patents were granted in the U.S. patent office in 1999, up 36% from just two years prior (124,068). Where will this massive IP land grab lead? With so much IP being acquired today, what cards will your company hold in the future?

The patent race

Today's patent race is putting an extraordinary burden on the world patent offices that are trying valiantly to absorb this explosive growth, but are overwhelmed by sheer numbers of applications and a huge multiplicity of repositories of prior art -- the publicly available proof of existence of innovation (i.e., articles, product descriptions, etc.). As a result, overly broad, and arguably bad patents are being issued every day, due in large part to the fact that examiners simply don't have the time to locate and review all the...