A Brief History
The authors first became interested in the business value of intellectual property in 1987 after reading a research paper by Professor David Teece of the Haas School of Business at the University of California, Berkeley.4 Even prior to Teece’s work, it was common knowledge that patents, trademarks, and copyrights have value. But Teece’s concept went further. His hypothesis that they have additional economic value beyond their defensibility was startling, as was Teece’s concept of the steps companies could take to increase the amount of that value. It was to be seven more years until a few adventurous companies would begin methodically extracting economic value from their company’s knowledge, know-how, and intellectual property.5
Historically, tangible assets held the greatest value for business and industry: cash, real estate, oil, gold, and so forth. But by the middle of the 1990s an invisible line was crossed and things that were intangible came to be of greater value.
In October 1994, Tom Stewart of Fortune magazine coined the term intellectual capital (IC), which he defined as the intangible assets such as skill, knowledge, and information. In late 1994, The ICM Group, LLC, a consulting company founded by the authors, began contacting all the companies who were actively trying to manage their intangible assets. In January 1995, representatives from seven of these companies assembled for a meeting to share what their IC efforts entailed. At that first meeting, ...