With the increasing role of intellectual capital, and the further emergence of what we can call intellectual capitalism, it is conceivable that IC management will develop engulfing IP management.

- Ove Granstrand

The IC concept brought to the forefront the challenge of managing IP as a business asset through­out the whole organization to ensure that the potential value of IP is capitalized upon to the max­imum. Many books have been published in the past few years14 to provide guidance on the ideal ways to manage IP as a business asset, to "mine the IP portfolio," to create "intellectual asset management" teams, to present success stories, and "how they did it" studies, and to provide insight on how to use the emergent search and management tools. These books all stress that IPM has to shift from a defensive and legal-oriented to an integrative approach wherein it is engrained in the management of business as a whole.15 The focus of most such books is on the management of patents and the ancillary use of trade secrets to protect know-how, with a very modest treat­ment of trademarks and copyrights. As a result, despite the great insight they provide, these books neglect issues faced by a number of industries where trademarks and copyrights, rather than patents, are the primary value drivers. The IP wealth of the fastest-growing service, con­sumer products, entertainment, and software industries is primarily made of trademarks and copyrights.

The emphasis on the value of IP to business pushed IP into the attention zone of chief finan­cial officers (CFOs) and CEOs in their quest to maximize value for stakeholders.16 IP strategies started to emerge as part of the overall business strategy, where it is used both for competitive positioning and generation of revenue. The emergence of licensing units in some organizations, the rise of brand managers to senior executive levels, and integration of copyrights in investment plans17 are all indicative of the push to perceive and manage IP as a business asset. The IC con­cept thus liberated IP from the reign of the legal department into the world of strategic business management. As a result, the most successful organizations recognized IP as the most important business asset, a source of regenerative value, which under proper management can be the core source of business growth in every industry.

A brief digression is warranted here. Under the CICM, managing IP does not mean that an organization should manage all forms of IP as a business. That would place great strain on resources and result in confusion of strategic focus. Instead the IPM program should focus on what we can call the "primary" form of IP in the industry of the organization. Not every form of IP is of strategic importance to every industry. For example, when patents are of strategic impor­tance in the chemical industry, they are only of secondary importance, if any, for the entertain­ment industry.

The primary form of IP18 for an industry is the one that has a crucial impact on competitive positioning and business performance. For most industries,19 one form of IP is of prime impor­tance while the others are of secondary importance. As such, organizations competing in a par­ticular industry need to develop the competency of managing the primary form of IP to create and sustain a competitive advantage. Regardless of industry, organizations should incorporate in their IPM programs working knowledge of patents, trademarks (brands), copyrights, and trade secrets to create synergy between the management of the various forms of IP, and to use the secondary forms as supporting tools, as will be discussed under the value transference strategies. This is of utmost importance because the primary form of IP affects in particular the substance of the IP strategy employed by an organization for the management of its business.

Engraining the management of the primary form of IP in the strategic management of the whole organization is what enables maximization of value at the IPM stage. Let's look at exam­ples where the various primary IP are managed as a business. IBM, an organization with a very strong patent portfolio, decided to unlock its value, and thus embarked on an aggressive invest­ment plan. The plan was carried out in cooperation among all the business units and depart­ments across the organization. A unit was established to reverse engineer the products of the competition to detect infringements of IBM patents. Researchers were given the green light to pursue projects even if outside the core business areas to build the patent portfolio. A strong orga­nizational culture was implemented in which increased patenting and licensing were encouraged. Every business unit, and every sales personnel, was a prospective licensing agent. After a few years of investment, IBM's $800 million royalty stream grew to around $1.5 billion annually (see also about secure investing).

In industries where trademarks and copyrights are the primary IP forms, the same results can be achieved. For example, Coca-Cola in the consumer products industry treats its $40 billion trademark as the most strategic business asset. The company invests heavily in reinforcing the brand identity and promise with a myriad of marketing and advertising campaigns, well-thought-out strategies that take the brand promise and make it relevant to local markets over the globe, and an aggressive merchandising strategy that alone brings around $1 billion annually in royalties. Similarly, Disney focuses its strategy on leveraging the creative content of each of its copyrighted works internally across the business divisions, and externally through a number of licenses gen­erating billions in merchandise royalties alone.

Managing IP as a business involves much more than establishing a licensing unit or marrying IP and business strategies. It involves engraining IPM in the management of the business as a whole by using IP both for competitive positioning and business growth. To that effect, the IPM stage under the CICM approach engrains appreciation and management of IP as a business throughout the whole organization. This involves effecting a number of changes at the strategic and operational levels.

At the strategic level, top management needs first to know the IP they have across the whole organization with reference to its value to various businesses and market segments. That facili­tates creating the IP portfolio, which is the platform for managing IP as a competitive tool and a business asset. Following the creation of the IP portfolio, top management should decide on the appropriate strategies for utilizing IP both for competitive positioning and commercialization purposes. The responsibility of capitalizing on IP should then be handed down to the various business units, to operationalize the IP strategies forged by top management. Each business unit is entrusted with managing the part of the IP portfolio that is relevant to its strategic focus. That is when IPM can be effectively taken to the operational level.

To activate IPM at the operational level, certain changes are required. First, structural changes are required to create teams at the business unit level and cross-functional teams at the organiza­tional level that focus on the use of IP for competitive positioning and commercialization pur­poses respectively. Second, cultural changes are required to create an IP-aware culture to promote the proper use of IP and protect against practices that may j eopardize the strength of the IP port­folio or result in loss of IP rights. At the operational level, businesses should also be provided with tools and methods (enablers) that aid decision making in the IPM processes.