Strategic Management of Intellectual Property

This is an MIT Sloan Management Review article. 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, intellectual property 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 intellectual property rights affect the industry's structure? What options do intellectual property rights offer vis-a-vis competitors? How can intellectual property rights grant incumbency advantage and establish barriers to entry? How can intellectual property rights help the company gain vertical power along the value chain? What organizational design accommodates an intellectual property 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.

• Finance and investing
• Competitive advantage
• Corporate strategy