Wednesday, March 31, 2010

Can There Be Too Much IP Within the Organization?

How much IP awareness should there be in a company? It is all the rage these days to argue in favor of IP empowerment, whereby the goal is spread IP awareness throughout the organization. But is this vision of IP penetration as desirable as it might seem at first glance? Consider the following two examples.

In an article entitled "Understanding and Unifying Diverse IP Strategies", which appeared in the January/February 2009 issue of Intellectual Asset Management, John Cronin and Paul DiGiammarino argue that proper IP strategy is based on "extracting the definition of each stakeholder's IP strategy", as opposed to simply deciding "what inventions to file as patents and in what countries to file them." The endgame is to develop and overarching IP strategy. And who are these stakeholders? The authors list the following: (i) patent counsel; (ii) engineers and inventors: (iii) product and technical managers; (iv) executive management: (v) business development; (vi) commercialization and marketing; and (vii) CTO.

More recently, Mark Blaxill and Ralph Eckardt argued in their article, "Putting the IAM Function at the Heart of Corporate Strategy," published in the July/August 2009 issue of Intellectual Asset Management (to be read in tandem with their 2009 book, The Invisible Edge: Taking Your Strategy to the Next Level Using Intellectual Property), that "IP has become the principle source of competitive advantage." And what is the mechanism for realizing this strategy? The author explain that the goal is to "break out of IP's organizational silo ... IP executives must push for deeper integration of IP management into the business, where it can have its greatest and strategic impact."

The common thread of these two articles is that IP management needs to be released from the organization's patent department, whereby everyone with a material interest in IP within the company will presumably have some influence over the company's IP policy. The problem is this: the persons most likely to "benefit" from this view may in fact be skeptical about its efficacy. My MBA students tend to be culled from middle management across a range of departments and are overwhelmingly employed in hi-tech companies.One would think that this would be an ideal cohort to embrace the view that IP should be the province of multiple stakeholders within their companies. However, their reaction to these proposals was largely one of skepticism.

There appear to be two reasons for this skepticism. The first was a sense that these authors have overstated the importance of IP (at least in most of their companies). That is not to say that they do not recognize the potential importance of IP, but rather to say that, having regard to the multiple managerial requirements that they face, overstating the centrality of IP is no more helpful than understating it.

The second was a feeling that the authors have confused IP strategy with IP awareness. Not every department within a company is, nor should be engaged, in fashioning or implementing IP strategy. For some departments IP may be more important; for others, less so. While consideration of the role of IP within a given corporate department is not the same thing as consideration of IP strategy, the company is organized for strategy and IP is a part of that overarching organizational structure, not some stand-alone body of information and decisions.

What the students wanted, and what is missing in these two articles, is not strategic empowerment, but rather a heightened awareness of what IP is, and how it may be expressed in their daily activities. Stated otherwise, both articles seem to take as a given exactly what students view as a form of unknown, namely a greater understanding of IP with the larger commercial and managerial context. Unfortunately, how this appreciation of IP is spread throughout the organization remains largely untouched, not just in the two articles but most of the managerial literature. That is a pity, because it is here that IP can have the greatest impact throughout an organization.

IP at the Corporate Periphery?