Edison in the Boardroom Revisited: How Leading Companies Realize Value from Their Intellectual Property, Second Edition

Chapter 5

Level Three: Capture Value

Companies that have moved to Level Three have experienced an epiphany. They now realize that their intellectual property (IP) can be used as both a legal and a business asset. That is, it can provide business value beyond revenue derived from protected products and services. Whereas companies at Levels One and Two are focused largely on the defensive use of IP, companies at Level Three realize that they possess two kinds of value. The first are the company’s innovations themselves—the ideas that yielded the products and services that generate the company’s prime revenue stream. But in addition, Level Three companies realize that the IP itself has value—notably in tactical (rather than strategic) positioning, and in the profitable generation of new revenues (see Figure 5.1).

Figure 5.1 Level Three of the Value Hierarchy