IP Industry State of the Union

The IP industry is undergoing a fundamental shift.

While IP has existed for over 200 years, we are just now seeing how IP is being leveraged. Whereas “IP” used to focus on people who generate IP, it is much more about how people are IMPACTED by IP. Executives, HR, managers, sales, etc are all being impacted directly or indirectly by IP, and need to understand what it means to them.

IP wants to be managed like a normal business unit.

The last 20 years has shown us that establishing metrics and monitoring performance is the only way to truly track progress. Whereas IP was a blackhole before, companies are struggling to find ways to manage their IP assets like a regular business. This will increase the sales activities, performance metrics, and P/L of a company.

The holy grail in the IP business is the correlation between companies, products, IP, markets, and financials.

Given the above trends, I believe companies want to understand the interplay between their other areas of operations. Since IP impacts every aspect of a company, the holy grail is to understand how IP impacts other operations. When a business can attribute real revenues, profits, losses, market share, and resources related to IP, we will truly have a mature system. It is a very hard problem, but it has deep impacts in daily operations.

IP litigation will only continue to increase.

I recently read the number of defendants on litigation cases increased 33% last year. Whereas IP used to be MAD (Mutually Assured Destruction), patent trolls (or non-practicing entities - NPE) have changed the game. NPEs are now getting funded by VCs and hedge funds, which will only feed more litigation. We’ve also seen considerable increases by companies looking to leverage their assets as well. Companies now tell us they are receiving upwards of 100-200 “infringement letters” per year.

Businesses and patent trolls are in an arms race, and information is the new ammo.

Much like the security industry, there is a constant battle between “white hats” and “black hats.” Each time a new strategy is launched to combat a threat, the other side comes up with an alternative. Information has increasingly been the one constant in this battle as new sources and types of information become freely available. The key is not just finding information, but understanding HOW TO USE IT.

However, I believe the IP industry is absolutely key to the future of the global economy. I will be commenting more about the growing pains, where trends are heading, and how this will impact the economy and companies.

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