Who is in Charge of IP and IC?

May 7, 2009 by  

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!

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