There is a logical hierarchy of IP management sophistication

Staunch advocates of diligent IP management and the universal acceptance of the appointment of board-level intellectual property officers will appreciate Julie Davis’ and Suzanne Harrison’s hierarchy of organizations, ranking companies in terms of their IP management sophistication.

Intangible assets become valuable only in the context of a business.

1. At the lowest level, companies use their IP for “defensive” purposes only, to protect what competitive advantages the IP provides; 2. The next level in IP management sophistication is the “cost control level,” in which companies not only use IP for defensive purposes, but actively manage IP costs; 3. When companies begin to realize (or search for) alternate benefit streams through licensing they reach the “profit center level;” 4. At the “integrated level,” firms consciously capitalize on the power of their intangible assets and integrate IP into business decisions worldwide; 5. The so-called visionary stage is almost like Maslow’s self-actualization stage, perhaps approached as an asymptote but seldom realized. “At this level of IP management sophistication, companies take a long-term view of a company’s IP … and use it to create more strategic value.”

Arguably, IP value is enhanced as organizations progress along this continuum.