Smart Money

Protecting intellectual property is now a business imperative

As companies continue to look for untapped revenue in a stagnant economy, they're moving beyond product and customer revenue streams. One revenue source for some companies has been intellectual property (IP). A wealth of income can be found in managing patents and licensing fees.

As the recent onslaught of IP lawsuits has shown, successfully managing IP may at least save you money in legal fees. Companies are increasingly adopting strategic business policies and technologies to manage IP effectively.

IBM has found itself on both sides of IP lawsuits recently, first being sued by Compuware Corp. for anticompetitive practices and stealing source code, and then filing its own patent claim in March 2002 concerning the Organization for the Advancement of Structured Information Standards (OASIS) ebXML specification it helped to develop. At press time, IBM was reconsidering its ebXML IP strategy — whether the company will charge for the technology has yet to be determined.

Other recent lawsuits include the fight between EMC Corp. and Hitachi Ltd., who have sued and countersued over various storage technologies. Both claim that the other is infringing on software patents, but at the same time, both contend that the other is only afraid of a little competition.

"Like any innovator, EMC's enduring value is our intellectual property," says Paul Dacier, EMC senior vice president and general counsel. "We must protect that intellectual property as a matter of principle. We welcome honest competition on the basis of innovation, but we refuse to compete against infringing imitations of our own inventions."

What all these companies realize is that IP can equal big dollar signs. An October 2001 report from Gartner states that IP-rich enterprises choosing to develop and pursue IP management strategies will increase IP-related revenue by 50 percent through 2004.

This focus on IP not only means increased revenue for companies with IP but also increased revenue for companies that offer services and technologies to help manage it.

Sopheon, an international software and services company, recently released a subscription-based service to help companies develop, manage, and commercialize IP. The basis of the service is a team of patent analysts with industry-specific experience in providing support for IP decision-making.

"It has been estimated that U.S. companies alone are wasting more that $1 trillion in underutilized patent assets," says Jack Johnson, president of Sopheon's information management solutions business unit. "Our new intellectual property service is designed to help technology-driven companies identify, protect, and leverage the IP that's worth holding on to, and make the right decisions in getting rid of those portfolio assets that have lost their value. It's a capability that's designed to deliver important bottom-line benefits."

IP can either save or make a company money. It's just a matter of leveraging IP and protecting it.

— Jeanette Perez

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