Best Practices in Intellectual Assets Management Recent Trends

Best Practices in Intellectual Assets Management Recent Trends Willy Manfroy President LES International and Bornival llc Hong Kong March 2005

Sources of Wealth 1800 Land 1900 Manufacturing 2000 Intellectual Assets Earnings Euros General Knowledge Ideas Technologies Inventions

The Changing Competitive Environment Increasing customer power Trends towards globalization Changing competitive environment Regulation Changing Trade policy

The Changing Base of Competition Examples of changes include: More variety More customization More frequent model change Higher quality Faster delivery Better service Advanced design Speed of obsolescence

Innovation Process Interactive and holistic process Linkage with internal function Linkage with outside world Knowledge management Human resources management Learning circle

Innovation Circle Learning Protect (IP) Knowledge Management Invent (R&D) Produce Mfg sfer an gy tr olo n Tech g in ns e Lic Move from IP to IA Sell (Marketing) Analyze (Business strategy Competitive intelligence)

Product /Technology Life Cycle “Rewards” E- Mail Mobile telephony Facsimile Telephone Telegraph Time (log)

Examples of Intellectual Assets Marketing Trademarks Trade Names Brand Names Logos Customer Lists Contracts Relationships Open purchase orders Technical Artistic Patents Patent applications Technical Documents Know How Trade dress docs Trade secrets Literary works Copyrights Musical composition Maps Engravings Contract Human Favorable supply contacts License agts Franchise agts Noncompete agts Trained and Assembled work force Employment agts Union contracts Data Processing Engineering Proprietary Software copyrights Automated databases Integrated circuits Industrial design Product patents Trade secrets Engineering drawings Schematics Blueprints Location Leasehold interests Mineral exploitation rights Easements Air rights Water rights Goodwill Institutional Professional practice Personal goodwill of a professional Celebrity Going concern value

Intellectual Asset Management Mission Protect the valuable technology ideas innovation and knowledge to provide: Freedom to practice Ability to exclude Optimize returns in alignment with the global business strategy

Intellectual Assets Management Stages IP Creation Impact Recognition Strategy Value Extraction Portfolio Management

Impact of Corporate Awareness Value generated Integrated IP on demand -- High Innovation as a strategic link Strategic Alliances & Ventures Proactive IP Management Process -- Low None R&D w/o patents Low Defensive We make it Cost management Licensing Intellectual Capital Licensing as a business Strategic Value Extraction Linkage of IP to strategy Value extraction systems Corporate IA Awareness High

Strategy Identify core competency Integrate IP in business strategy Develop Intellectual Assets planning to sustain business strategy Use Intellectual Assets to understand react to threats and opportunities

Creation Set up a multiple competence IAM centre (HR, Business, Management, R&D, Legal) Develop training and awareness programs Develop metrics and reward systems Link innovation to Human Resources and business strategy

Management Develop systems and procedures to integrate Intellectual Assets and business strategy into IP procurement. Inventory and classify portfolio Manage and analyze Evaluate and maintain

Value Extraction Include all extraction mechanism in Intellectual Assets strategy and management The illusion of exclusion Link competitive intelligence tools to R&D, Intellectual Assets and business strategy

Value Extraction Mechanisms of Intellectual Assets Outright sale License or cross license Joint venture or alliance Reduce competitive threat Incorporate into existing business Create a new business Contribute to equity position “Donations”

Impact Recognition Reporting of intangibles Internal and external metrics Use Intellectual Assets as collateral Recruiting and management value

Creation of new industries Biotechnology ICT Existing E commerce Genomics and proteomics Bioinformatics Nanotechnology Others? Emerging