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By one informed estimate from the late 1990s, three-quarters of the Fortune 100’s total market capitalization was represented by intangible assets, such as patents, copyrights and trademarks. In this environment, cautions the author, IP management cannot be left to technology managers or corporate legal staff alone — it must be a matter of concern for functional and business-unit leaders as well as a corporation’s most senior officers.
To realize the full value of their companies’ intellectual property, top executives must seek answers to the following questions: How can the company use intellectual property rights to gain and sustain competitive advantage? How do IP rights affect the industry’s structure? What options do IP rights offer vis-à-vis competitors? How can IP rights grant incumbency advantage and establish barriers to entry? How can IP rights help the company gain vertical power along the value chain? What organizational design accommodates an IP strategy most effectively?
The author explores each question, drawing on such company examples as Nokia, Motorola, Novo Nordisk and Leo Pharma, in the process helping lead intellectual property rights out of their shadowy existence in patent and legal departments.
Markus Reitzig is an assistant professor at Copenhagen Business School in Denmark. He can be reached at reitzig@cbs.dk.
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