Innovate or Perish: Managing the Enduring Technology Company in the Global Market

The Third Rule of Value: “Patience and Diligence Remove Mountains”—William Penn

An IP program does not generate instant value. Most forms of IP require some time to acquire. The U.S. Patent and Trademark Office typically takes two to three years to grant a patent, and coverage in some foreign countries takes even longer. Years could pass before there are any valid patent rights to enforce.

However, the time to acquire patents is only part of the reason why an IP program cannot deliver value immediately. Intellectual property is premised on the creation of something new. A patent requires an invention. A trademark requires the creation of a product name or image that becomes recognizable by customers. A trade secret requires the creation of information that is protected as a secret. It takes time for such “creation” to ensue.

Further, just making the creation is only the first step in having valuable IP. Because IP rights provide only the right to exclude, they do not have value until others recognize the risk of being excluded. Intellectual property rights in a creation do not become valuable until another business either copies the creation or recognizes the benefits of it and wants to use it. Therefore, no matter how clever a creation is, there is inherently a delay until IP rights in it are valuable.

One practical implication of this inherent delay is that building an IP portfolio takes patience and a long-term commitment. But an equally important lesson is that when measuring ...