Edison in the Boardroom Revisited

A revised and expanded edition of the groundbreaking Edison in the Boardroom, highlighting the winning strategies today's biggest companies use to maximize the value of their intellectual property

Now fully revised and expanded, Edison in the Boardroom, Second Edition takes an in-depth look at the revolutionary concept of intellectual asset management (IAM). Incorporating stories and teachings from some of the most successful companies in the world—such as Hewlett-Packard, IBM, Procter & Gamble, Rockwell, Dow, Ford and many others—Harrison and Sullivan have made an exhaustive study of IAM and its implications for today's businesses.

• Features updated interviews of companies, and a new treatment of the Profit Center Level
• Updates stories and teachings from some of the most successful companies in the world
• Showcases a hierarchy of best practices that today's companies can integrate into their own business philosophies to gain the best return from their intellectual assets

Edison in the Boardroom, Second Edition compiles a wealth of knowledge and successful stories that illustrate how far businesses have come in their ability to leverage and monetize their intellectual assets.

Acknowledgments xiii

Chapter 1 Introduction 1

Why Update Edison in the Boardroom? 3

A Brief History 6

The Edison Mind-Set 11

The Intellectual Property Management System 18

Summary 25

Chapter 2 The Changing Environment for IP Management 27

The Rise of the NPE (Nonpracticing Entity) 28

Technology Convergence 29

The Arrival of the Chief Intellectual Property Officer (CIPO) 30

The Globalization of Business 33

The Changing Legal Environment 38

The Continuing Lack of a Formal IP Marketplace 39

The Rise of the IP Investor 42

Summary 45

Chapter 3 Level One: Defend Position 47

What Level One Companies Are Trying to Accomplish 48

Functions, Tools, and Capabilities Quiz: Questions Only You Can Answer 51

Best Practices for Level One: Defend Position 56

Summary 68

Chapter 4 Level Two: Manage Costs 71

What Level Two Companies Are Trying to Accomplish 72

Best Practices for Level Two: Manage Costs 74

Summary 92

Chapter 5 Level Three: Capture Value 93

What Level Three Companies Are Trying to Accomplish 94

Best Practices for Level Three: Capture Value 95

Summary 118

Chapter 6 Level Four: Synthesize Opportunities 119

What Level Four Companies Are Trying to Accomplish 120

Best Practices for Level Four: Synthesize Opportunities 121

Summary 139

Chapter 7 Level Five: Shape the Future 141

What Level Five Companies Are Trying to Accomplish 142

The Characteristics of the Future 143

The Characteristics of Sustainable Corporations 143

Best Practices for Level Five: Shape the Future 148

Summary 159

Chapter 8 What to Do When You're Not on the Pyramid 161

Is My Company on the Pyramid? 162

Is My Company a Candidate for the Edison Pyramid? 163

Characterizing IP-Indifferent Companies 164

How Companies Can Destroy Value 167

Moving toward the Edison Hierarchy 170

Summary 171

Chapter 9 The Procter & Gamble Journey 173

Beyond Make and Sell 174

Out-Licensing Technology 175

Additional Growth via Effective Policy Changes 176

Reinventing and Integrating Trademarks and Brands 177

Looking Externally 180

IP as an Enabler to Innovation 184

Looking Forward 185

Appendix A Significant Developments in Intellectual Property Law in the Past 10 Years 187
Mark Radcliffe

Recognition of Value of IP Rights 188

Developments in Patent Law 194

Developments in Copyright Law 205

Developments in Trademark Law 210

Appendix B The Rise of Patent Aggregators 215
Kent Richardson and Erik Oliver

Terminology 215

Background 216

Valuation of Patents in the Aggregation Context 219

Classification Based on Business Model 220

Intellectual Ventures 224

Patent Aggregators: Good or Bad 225

Future Aggregator Ecosystem Directions 226

Appendix C A Closer Look at IP Damages 229
Eric Shih and Rob Kramer

Patent Damages 230

Entire Market Value Rule 231

The Road Ahead 236

Notes 237

About the Authors 243

Index 245

SUZANNE S. HARRISON is a cofounder and Principal in Percipience LLC, a board-level advisory firm focused on intellectual property strategy and management, quantifying and mitigating IP risk, increasing IP value capture and focused innovation. She is also the convener of the ICM Gathering, a group of global companies that has been meeting since 1995 to define, create, and benchmark best practices around Intellectual Property Management (IPM) and other intangibles (I-stuff). An intellectual property expert testifying on both damages and IP management activities, she has written numerous articles and is coauthor of Einstein in the Boardroom, also published by Wiley.

Dr. PATRICK H. SULLIVAN is an expert on extracting value from intangibles. He has pioneered the development of methods and practices for analyzing, valuing and managing intangibles for business purposes. He has consulted with over 1,000 companies on issues related to value extraction and valuation. He is a court-approved expert on valuing intangibles and has pioneered the development of valuation methodologies specifically for intellectual property. He is a frequent speaker and has published several dozen articles on valuation and value extraction. His other books include Technology Licensing, Profiting from Intellectual Capital, Value-Driven Intellectual Capital, and Einstein in the Boardroom, all from Wiley.

PRAISE FOR EDISON IN THE BOARDROOM REVISED

"The second edition of Edison in the Boardroom surpasses the first. It is a timely peek behind the scenes at how companies manage and measure some of their most valuable assets, and how businesses use them to succeed."
—SCOTT FRANK, President and CEO, AT&T Intellectual Property

"In this second edition of Edison in the Boardroom, Suzanne Harrison and Patrick Sullivan have really managed to identify and integrate the major changes of the last ten years that have changed the Intellectual Asset Management landscape. Now more than ever, a business strategy without an IP strategy is no strategy!"
—RUUD PETERS, Chief Intellectual Property Officer, Philips

"A must-read for anyone involved in Open Innovation. This latest installment in the Boardroom series offers keen insights, stories and best practices, enabling us to learn from each other to become even more effective strategic innovation partners."
—JEFF WEEDMAN, Vice President, Global Business Development, Procter & Gamble

"Recognized around the world as pioneers in the emerging field of intellectual property strategy, Suzanne Harrison and Patrick Sullivan deliver a must-read guide for business executives ready to maximize the creation and exploitation opportunities for their companies' intellectual property. Edison in the Boardroom Revisited presents an insider's view of the best IP practices used at the world's leading innovation companies organized in an easy-to-understand framework that can be used by companies at all stages of maturity, in any industry, whether now or in the future. This book should be read and re-read by anyone serious about understanding IP strategy."
—ALLEN M. LO, Deputy General Counsel and Vice President, Intellectual Property, Juniper Networks, Inc.