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

4

LEVEL FOUR—INTEGRATED

COMPANIES THAT HAVE achieved the fourth level have come to understand the strategic implications of intellectual property for their firm. They look beyond defense, costs, and profits. (See Exhibit 4.1.) They realize that IP can be used to position them broadly in their marketplace as well as providing tactical positioning. They also see that IP may be used as an effective weapon against competitors. While profits may be made directly from their IP, companies at Level Four realize there are still greater opportunities. IP is now viewed as an integrated business asset that can be used in a broad range of ways: as a negotiating tool, as a way of positioning the company strategically, or even as a way of affecting stock price.

In addition, the Integrated Level marks a shift in the nature of the IP function. At this level, the IP function starts looking outside its own walls to integrate its expertise and resources with those of the rest of the company. It becomes more innovative and looks for ways to help other parts of the organization reach their goals.

EXHIBIT 4.1 The Value Hierarchy

WHAT LEVEL FOUR COMPANIES ARE TRYING TO ACCOMPLISH

Companies at Level Four see their IP as a set of strategic as well as tactical assets. At this level, companies are usually interested in IP as a set of business assets. Their IP management objectives include:

• Extracting strategic ...