Time for sharp competitive intelligence

High tech CEOs are failing to manage their companies’ intellectual property portfolios properly at a time when that business is increasingly about building collaborative relationships and less about selling patents for revenue. That was the view of Marshall Phelps, senior vice president of intellectual property at Microsoft Corp. in a keynote at the annual Licensing Executive Society meeting Monday
Phelps said:
1. IP is not centrally managed in most high tech companies, but it needs to be.
2. You either believe you are in a knowledge economy or not, and if you don’t you have no business being a leader in a high tech company, he told the audience of some 1,200 lawyers and business managers.
3. Other than Bill Gates, I don’t know of any high tech CEO that sits down to review the company’s IP portfolio – Phelps ran IBM’s IP business before joining Microsoft four years ago.
4. Most turn that work over to an IP counsel and only pay attention to it when they become involved in litigation.

The purpose of IP programs is to spawn collaborative relationships not amass patents and sell them, according to Phelps. The vast majority of companies can not do what IBM did nor should they even try. Many companies see patents as a way to keep competitors from entering a market. A better view is looking at the company’s know how as a way to open the door to co-development deals that expand markets—even for traditional competitors.

IBM’s biggest licensing deals involved sharing its novel copper interconnect technology with Motorola and Intel, deals Phelps suggested were worth nearly $3 billion.

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