Expensive doesn't always mean high quality in the patent world
The recent hullabaloo regarding Sarah Palin’s “gold plated” wardrobe from Saks and Neiman Marcus got me thinking about how many companies select patent law firms. This may seem like a non-sequitur, but bear with me. . .
Those responsible for dressing Gov. Palin apparently believed that the large expenditures at Saks and Neiman Marcus automatically translated into value for the Republican ticket by allowing her to be viewed as more “Vice Presidential” than she would otherwise been considered. Notwithstanding the high cost of her new wardrobe, as reported in the New York Times, her overall “look” remains the same as when she campaigned for and served as Governor of Alaska: business-appropriate jackets, feminine skirts and high heels. The response to this wardrobe makeover by a major fashion commentator: “Honey, I could have dressed you for a lot less than that.” From this comment, as well as the continuing backlash about the cost, it appears that the expense of Gov. Palin’s wardrobe does not directly correlate with the value provided to the McCain-Palin presidential ticket.
Not dissimilarly, when I review patent portfolios for clients for valuation and strategy analysis, I often think to myself “you paid WHAT for this patent?!” All too often, otherwise smart business professionals effectively engage in “magical thinking” by assuming that the act of throwing money at a high end patent firm will translate into creating business value. Of course, these same professionals would not believe that the mere act of spending of money will result in value creation in other areas of their business. So why do they do this in the patent realm? Continue reading
Protection of innovation need not be expensive
This week, I am intrigued by what appears to be a recent convergence of reporting and blogging about the state of innovation in the US. There is an obvious concern by those who keep track of such matters that, in the current economic climate, government and business will “take a hatchet” to R & D and innovation budgets in an attempt to reduce overall costs. Such cutting is, of course, a rational short term solution to address today’s problems. Government and corporate leaders taking the long view will nonetheless understand that, when it comes to R & D and innovation spending, it is much better to apply the proverbial “scapel” to one’s budget.
Moreover, as discussed by Tom Donahue (President and Chairman of the US Chamber of Commerce) recently on The Huffington Post (h/t Front End of Innovation), intellectual property protection is a critical component of successful innovation efforts. No organization wants to give its competitors, whether another company or country, free R & D–but, that is exactly what happens when an innovative organization fails to include patent protection a critical component in its innovation strategy. It is therefore mandatory that an organization that chooses to “bite the bullet” and invest in innovation during today’s challenging business conditions also develop a strategy to obtain intellectual property protection for those innovations. Continue reading
IP knowledge is power for business leaders
More than 70 % of corporate value today lies in the form of intangible assets, much of which are in the form of patents, copyrights and trademarks. Notwithstanding this fact, many otherwise sophisticated CEO’s and corporate managers essentially leave a significant portion of firm value on the table by failing to develop and execute on a business strategy directed to capturing and maximizing this class of assets.
Of course, few organizations would admit that management fails to fully realize the asset that forms the bulk of today’s corporate value. Many managers also may not believe they have the requisite knowlede to determine whether their company’s intellectual assets are being properly exploited. Fortunately, it can be fairly easy to discern whether a company’s management expends the effort necessary to capture and maximize its intellectual assets. Put simply, if an organization’s top business leadership does not possess an engaged knowledge of their company’s short and long term intellectual property strategy, one can directly infer that the company is leaving significant intellectual asset value on the table.
What do I mean by “engaged knowledge” of a company’s intellectual property? The following quiz should shed light on this critical aspect of strategic business management today. Continue reading
Patent monetization success requires knowing what the term means
Smart corporate leaders continually seek new methods to capture firm asset value and improve cash flow. And, with estimates of more than 70 % of corporate value being in the form of intangible assets, it is not surprising that many organization are searching for ways to generate revenue from this all-to-often untapped asset class. IP monetization has therefore become an increasing focus of corporate managers and even seems to be an emerging “business model du jour” for innovative corporate managers. Moreover, since patents comprise the most “tangible” form of intangible assets at most companies, many corporate leaders view patent monetization as “low hanging fruit” in the search for additional methods to generate cash income.
Indisputably, there is much money to be made from patent monetization. However, in counseling business professionals as an IP Business Strategist (more info here: The Hutter Group), I frequently find that many otherwise sophisticated high-level corporate managers do not possess a fundamental understanding of what the term “patent monetization” really means. That is, they do appreciate that patent monetization can operate as a significant source of firm asset generation. However, they do not also recognize that there are 2 essential models of patent monetization, each of which lead to markedly different results and require vastly different corporate commitment and infrastructure development for successful execution.