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Shareholders Hold CEOs Responsible for IP Value

~Andy Gibbs, Excerpt Essentials of Patents (John Wiley)

Not long ago corporate chiefs who lead their organizations in pursuit of leading edge technology were called visionaries. Times change.

Today, only those chiefs with sharp vision will properly and profitably manage the convergence of technology, law, and business across the enterprise. This convergence defines the new value business economy - it defines intellectual asset management (IAM). We refer to this integrated management methodology as Patent Quality Management, or PQM.

Meeting a higher standard

As the market values of many of today's leading corporations weigh in at more than 65% attributable to intangible assets, the "old school" methods of corporate and financial management simply fall short. With performance pressures mounting, shareholders, regulatory agencies and business partners are holding CEOs to a much higher performance standard than in the recent past.

Over the past few years more and more patent data has become available through huge databases that house global patent data. As more patent data becomes available, it's incumbent on patent researchers to dig more, qualify new technologies better, find new technologies to license in, and discover that "silver bullet" patent that will bring your infringement litigation to an immediate, profitable conclusion. There are a host of new patent analytics tools that will help determine a competitor's technology investment trends, R&D focus, and that company's intellectual property shortcomings.

CEOs wouldn't dare run a company without relying on integrated accounting software. Now that intellectual property and asset management system (IPAM) software is immediately available, CEOs must now consider implementing the best of the IPAM tools for their organization as well. Poor management practices aside, the fact is that those CEOs who embrace the enterprise-wide use of the rapidly evolving software tools will overtake their competitors quickly.

Failure to meet these heightened performance standards related to intangible asset management not only jeopardize the CEO's future with the organization, but more importantly could expose the CEO to civil, possibly even criminal liability.

Patent Quality Management can have a direct and calculable impact on corporate competitive strength, revenue production, and long term shareholder value-building.

 

A mission that meets shareholder expectations

Building shareholder value is the #1 corporate objective - so patent and intellectual property management programs must be tailored to build and support shareholder value creation. So important is this new economy to competitive business positioning, as well as long term shareholder value preservation and development, that the new corporate mission statement should reflect the rising importance of leveraging patents and intangible assets throughout every level of the enterprise. When was the last time you revisited your Corporate Mission Statement?

To most people (possibly even you), patents are obtuse concepts which are difficult to really understand. We all know the words "patent pending". Some of us even understand the negative impact on stock value when a patent infringement suit is launched. However, because of the elusory nature of patents, presenting a clear and concise annual report regarding patent performance is exceedingly difficult. The information must be straight forward, and in a format that shareholders will instantly understand. If shareholders feel that you have either failed to properly manage "their" patent portfolio, or feel that your report on intangible assets was misleading, they will hold you accountable.

It's time to get the tools implemented, and empower your team.

The court has dismissed the patent infringement lawsuit filed by Datapoint against CLI. VTEL, who purchased CLI, had already negotiated a settlement with Datapoint that provides a broad license that protects customers, partners and shareholders from patent infringement actions.

room for growth and improvement. Dr. Deming, the father of Total Quality Management (TQM) changed the production structure to a "bottom-up", with management empowerment becoming the "top-down" management style. Top down empowerment, combined with the new Corporate Mission Statement sets the new leadership standard for your organization. Because Patent Quality Management will be a foreign management concept to many senior staff members, it's critical that a top-down expectation be established early, that empowerment to experiment and build PQM systems is supported, and that a bottom-up PQM performance program be recognized and rewarded.

PQM is a team approach. Now, since every team needs a leader, it's time for CEO’s to step to the front and be counted. You are personally responsible to initiate this new team effort…and it may be the most important decision you’ll ever make as CEO of your company. Are you ready?