Edison in the Boardroom: How Leading Companies Realize Value from Their Intellectual Assets

1

LEVEL ONE—DEFENSIVE

IN THE GOLD rush days of more than a century and a half ago, “Forty-Niners” learned there were different levels of value to be obtained from gold mining. The first of these involved staking and defending a claim. Today too, the first step is protection. This is the spirit of the Value Hierarchy's Level One: Defensive shown in Exhibit 1.1.

Defense of intellectual property—including patents, trademarks, and copyrights, as well as ownership offered through various types of agreements—is a necessary and desirable activity. Indeed, protection is the foundation of value. For example, patents give inventors adequate time to apply and market an idea before others do.

Much as a miner must stake a claim in the land containing gold, or a shareholder must hold a stock certificate, a patent holder must own a patent. Only after staking claims can the owner of the intellectual property actually achieve the other levels of intellectual property value. To continue the “gold rush” metaphor, these might be seen as panning (Level Two, the initial savings of cost control), mining (Level Three, deeper profit-seeking), processing (Level Four, integration with other operations), and, finally, sculpting into new forms (Level Five, Visionary). These five levels constitute an overall process for the management of intellectual property—a process that depends on the foundation of defense of ownership.

EXHIBIT 1.1 The Value Hierarchy

We begin our discussion of best practices by focusing ...