Why Western Companies Need Not "Dread" the Sucessful Monetization of Intellectual Property by Indian Firms

In fact, the best IP practices in monetizing IP described by Mr. Rajou are alive and thriving at many Western companies. Moreover, each of the activities described as exemplary of Indian firms were actually developed in large measure by companies such as Proctor & Gamble, Dow and BellSouth (now AT&T). Such best practices are illustrated in the 2001 book Edison in the Boardroom: How Leading Companies Realize Value from their Intellectual Assets (more info here: http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471397369.html). Further, as discussed in the article in MIT Sloan Management Review entitled “How Executives Can Enhance IP Strategy and Performance” (abstracted here: http://sloanreview.mit.edu/smr/issue/2007/fall/11/), in just the past few years, many European firms have been successfully creating IP-centric organizations where the focus is increasingly directed toward profiting from inventions, not just obtaining patents. xxxMr. Rajou is correct to applaud the successful efforts of Indian firms in developing and executing on profitable IP strategies. These Indian firms are properly looking to the successes and failures of their corporate counterparts in the stable legal environments enabled by Western governments. (Indeed, some may argue that the immaturity of Indian IP law actually disincentivizes Indian firms from obtaining patents and drives them to seek other strategies for their IP. However, this post is not about how governmental action or inaction affects corporate IP strategy, so I will leave further discussion of this topic to the legal theorists.)

These Indian firms are also fortunate not to operate with entrenched structures where the existing corporate stakeholders may have a vested interest in not adopting these best practices. For example, I expect that Indian firms do not operate in established corporate IP and R&D infrastructures where adoption of best practices in IP strategy, such as not obtaining patents and externally sourcing R&D, would upset the status quo for corporate patent lawyers and researchers, respectively. The absence of these entrenched corporate interests no doubt enables Indian firms to more efficiently select and implement corporate best practices, whether IP-related or otherwise. But it is a mistake to believe that Indian firms have a monopoly on the ability to execute on such best practices.

Unlike Mr. Rajou, I believe that Western firms need not “dread” the IP strategy-related actions of their Indian counterparts. Rather, they need merely recognize that “imitation is the sincerest form of flattery” and look to the successes of their Indian counterparts in the monetization of IP. When more Western firms, both large and small, recognize the value the of the IP strategies developed by their own Western counterparts and adopt such best practices in their own companies, the actions of Mr. Rajou’s Indian firms will not appear to be so “uncanny” after all.

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