Companies need to do a better job managing their intellectual property, according to a recent report from PricewaterhouseCoopers. The study, which surveyed CEOs from 339 private, fast-growing companies, revealed that less than a third of such firms have a formal process in place to manage their IP—patents, copyrights, corporate secrets and the like. Furthermore, CEOs estimate that only 66 percent of their company's IP is actually being used.
It's a common problem that's costing companies more than they realize, says Aron Levko, who leads PwC's intellectual property practice. "What often happens is that patents are issued for a given product, but the product ends up going in another direction or never goes into production." That problem, coupled with the IP gained through mergers and acquisitions, means that "companies end up with all these assets they don't know what to do with." And considering that fees for maintaining, say, a global patent can coast as much as $100,000 over the patent's lifetime, "when you add it all up, the costs of all those patents and other assets can be very significant," Levko says.
Problem is, companies are loath to give up their IP, even if it's not providing any value to the company. "It's like that old suit that's taking up space in your closet but you don't want to throw out because someday it might come back into style," he says.
To get a handle on IP, first take inventory of all the assets in the company. "Then match each asset to the products you are currently selling, or the process they belong to," he says. If an asset doesn't have a home, consider squashing it.
But shedding worthless IP isn't the only answer. Levko suggests companies craft a formal strategy to put their assets to work. "Licensing is growing quickly, especially with globalization," he says. "So there's a greater opportunity to license your technology to, say, a less-developed country." Currently, only 17 percent of surveyed companies with intellectual property license out IP for profit.
The bottom line? If you've got it, flaunt it.
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