Who is in Charge of IP and IC?
May 7, 2009 by Mary Adams
I have really enjoyed getting to know Andrew Watson and Jordan Hatcher at ipVA over the last few months. I met with Jordan on my recent trip to London and he sent me a new article that he and Andrew wrote called Fix Your Broken IP Structures from www.managingip.com.
The article makes a case for a position called the Chief Intellectual Property Officer (CIPO) who is outside the legal department. They use color-based Insights Discovery Learning System to look at the personalities of different departments. Legal departments, they assert, are blue (accurate, ordered and cautious), not the red traits that are needed to exploit IP (decisive, risk taking and results driven). This means that the CIPO would need to be in the sales or strategy areas. It’s a compelling case.
Although their business focus is IP, the three of us have had some good discussions about the limitations of the IP perspective. IP is, I believe, just a small subset of intellectual capital. It’s really a legal concept and refers to portions of intellectual capital that can be protected by legal means. This legal strategy is an important component of intellectual capital management. Failing to protect IP can be a fatal mistake for a company.
However, protecting IP is no guarantee of business success. That’s why Andrew, Jordan and I all agree on an expanded definition of IP (really IC) to include human, relationship and structural capital of all kinds. IP is part of the structural capital, but only the unique bits that can be protected. There are a lot of people in the IP community trying to monetize IP–but the value of a patent is limited if it is cut off from the business model that surrounds it.
The truth is that the highest and best use of IP is inside a thriving business. Then it is not just the patent system protecting it. It is the entire web or ecosystem that is built around it: the structural capital processes to implement and support it, the human capital to maintain and improve it, the relationship capital to help monetize IP in its operationalized state.
I guess that’s why I would accept their bid and up the ante. Don’t settle for a Chief IP Officer. Go all the way and advocate a Chief IC Officer. The CICO would make sure that intellectual capital gets all the legal protection it should but then move on to the really valuable task of putting the IP to work in a scalable business model that can deliver innovation and performance to the corporation. But you would have to think about the interaction between this role and that of the CIO and COO (see my discussion on The Right C’s from last fall).
We don’t have the answer yet but I think we are asking the right questions!
Thanks for upping the ante Mary!
I totally agree that putting the CIPO role into the wider IC context is an interesting further step. But I wonder if it is possible to roll this role all into one person. If the IP side alone is a Herculean task, then surely such a role with a wider IC (in its broadest sense) remit would be the domain of Mt Olympus.
Perhaps there is a need for twin roles – a CIPO and a Chief Innovation Officer – working in tandem? Keeping with the mythological theme, perhaps we need a Castor and Pollux of IC/IP to be our patron?
Hi Mary
Thanks for the profile on our article. As you say an evolutionary piece that reflects how nobody has the answers yet but at least we are asking the right questions.
I like the term CICO though I’m sure it will never take off or will get sued for passing off by some shoe manufacturer.
Jordan is just polishing off a post on our blog about the challenges of communicating from the intangibles world to the ordinary world. We’ve profiled you as one of the people who get the language and definition right. But also that we’re all suffering from the absence of a common language with which to communicate. Witness CICO vs CIPO. IP vs IC.
BTW we do agree with you that IC is the correct and wider definition–its just that if you talk to a CEO or VC about IC he just has not got a clue–whereas at least with IP you’re in a three way tie between internet protocol, insolvency practitioner and intellectual property. Apologies for the simple colloquialism but it does get us in through the door.
I’m all for the common language push though.
Andrew
Thanks Andrew and Jordan-
It’s almost like we are a technology looking for the winning “standard.”
I share Jordan’s fear that this is more than one person can handle. Frankly, when you start down this road you realize that the traditional org chart is stuck in the industrial era (just like our accounting).
Let’s keep talking!
Mary
In my experience, management understands human capital, perhaps not truly from an intellectual capital viewpoint as we use that term. But they do understand the value added by their workers, if only from the man-hour or work capacity perspective. Moreover, those certain key players are moved from project to project based upon the person’s technical skills or reputation of fulfilling a specific need. Though there is typically no CICO to manage this, in my mind the C-level or the next level down does seem to handle this allocation of resources in a competent manner.
The true problem arises when looking at the registered intellectual capital (or IP). Historically the registration of this intellectual capital was left to the Legal Department. Management understands to a great extent that in order to check the box, they must consult with the IP Attorney who is responsible for getting the patent, trademark, or copyright. But what they miss is how and why this form of registered intellectual capital can drive and enhance their business value. The reason is that to many the Legal Department is a necessary evil. How often have we heard of the Legal Department being called “The Opportunity Elimination Department” or the “Work-Stop Department” or other similar terms?
In my practice, everyday with respect to the business, I attempt to disassociate myself from the Legal Department. I emphasize that my function is to pave the road ahead for my CEO and COO so that the business opportunities they identify and choose to pursue are protected and the bumps in the road are identified. This is not an easy task as I am in the Legal Department and I am often viewed as being interchangeable with my non-IP colleagues. As such, it would be extremely beneficial to establish a CIPO position which permits management to perceive IP from a perspective that focuses on strategy, informed risk, and monetization.
Scott Garrison
Thank you Scott for this clear call for a person that can bridge business and legal strategies for IP and IC. So many in the IP world are calling for a more strategic role for IP management. But as long as it remains in a legal “ghetto,” the true promise of IP will not be realized.