 How to leverage intellectual property to create and apportion value |
| Review Date: April 2, 2009 |
| Reviewer: Robert Morris, Dallas, Texas |
What are the most important invisible assets that make up the world of intellectual property (IP)? In this book, Mark Blaxill and Ralph Eckhardt include these: trade secrets, trademarks, copyrights, and patents for invention. In the first four chapters of their book, they establish the foundations for thinking about IP: how invisible investments drive economic growth, how intellectual property drives business profits, how to unleash "the company of ideas," and how to turn complexity into a competitive advantage. Then in the next three chapters, they shift their attention to corporate strategy: why innovation without protection is philanthropy, how to realize the benefits of open innovation, and how to win by design. In the final three chapters, they "zoom out to see how IP is changing the face of economic competition between countries, and [they also] zoom in to see that IP assets are becoming tradable commodities, and that an entirely new asset class is beginning to emerge. More specifically, they explain why "IP nations" are the future of global competition, why the emerging market of IP is "a capital idea," and how to formulate a strategy and game plan that will achieve an invisible competitive advantage.
The material provided in Section II, "Competitive Strategy for a Company of Ideas" (Chapters 5-7), is of special interest to me. Having explained in Part I why IP strategies require the development of relational advantages in a complex competitive environment, Blaxill and Eckhardt now shift their attention how strategies of control, collaboration, and simplification "echo the three attributes of a basic network [i.e. nodes, links, and clusters] and comprise a cycle: one where opportunity leads to success, success confronts its limits, and limits create new opportunities." In Chapter 5, the authors provide a mini-case study of Gillette razors and blades (Pages 127-135), noting that the best intellectual property managers such as those at Gillette "are very protective of their methods for managing the IP process. For companies that invest heavily in innovation, the effective management of the modern-day version of Edison's original [begin italics] innovation factory [end italics] has become one of the few management tasks that can actually contribute to competitive advantage." They also briefly but insightfully discuss the portfolio of IP formats that includes trade secrets, trademarks and brands, design patents, and utility patents. With regard to the core principle of collaboration, Blaxill and Eckhardt devote Chapter 6 to explaining the three main benefits to it: (1) delivering complex solutions to the market more expeditiously and more efficiently, (2) getting to market with complementary patents with dozens of patent-hold companies (e.g. in a patent pool), and (3) energizing and tapping external innovation (i.e. forces outside the company that present a multiple of solutions for each of the given problem(s). They cite the example of Linux that shows "how mass collaborations have emerged as a powerful and viable new form of open innovation even if they are often misrepresented as a form of utopian socialism in action."
Then in Chapter 7, Blaxill and Eckhardt share their thoughts about simplification, citing various examples such as IBM's System/360, Netscape's Navigator and Mozilla browsers, and the trade-off between open and closed strategies. Near the conclusion of Section II (Page 224), this passage caught my eye: "Although open-source models like Linux are themselves a form of disruption technology, disruptive technologists often go the opposite direction of openness. Instead, they frequently reject componentization as they introduce new, and highly integral, designs. Most notably, they often reject convertibility over time (or backward compatibility), a feature that makes them highly threatening to entrenched businesses with large installed bases of users (and related service businesses), since they can throw entire categories of business out of the market." The stakes in market competition are indeed high, thus increasing both the value of relevant intellectual property and the need to protect it as well as leverage it strategically.
This book is by no means an "easy read." In fact, I had to re-read it with even greater care before beginning to organize my thoughts about what to say in this review. I think the information, insights, and advice provided by Mark Blaxill and Ralph Eckhardt will be invaluable to decision-makers who are either planning to or who have only recently begun to take their strategy to the next level using intellectual property. Many of those who have read the first nine chapters may ask, "Now what?" They will be pleased to find in the last chapter that that Mark Blaxill and Ralph Eckhardt respond directly to that question. After briefly and clearly reviewing the "what" of leveraging intellectual property, they devote most of their attention to explaining the "how." For example, they suggest seven items for an action agenda that will avoid unintentional philanthropy (Pages 296-298); soon thereafter, they suggest that decision-makers consider seven action ideas to avoid "overplaying their hands and getting trapped in games of mutually assured destruction" (Pages 300-302); and then decision-makers are thinking about how a company can compete by using simplification strategies, they suggest another set of seven actions (Pages 304-306). Once again as throughout the narrative that precedes this material, the content is rock-solid, the core concepts are developed in depth, and the advice is eminently practical.
I offer my congratulations to Mark Blaxill and Ralph Eckhardt on what I consider to be a brilliant achievement. |
What Every Executive and Congress Need to Understand About Patents and IP
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| Review Date: November 13, 2009 |
| Reviewer: Irving S. Rappaport, Palo Alto, CA |
Blaxill and Eckhardt's "Invisible Edge" is a must read for every 21st century business executive, every member of Congress and their staffs, every judge that hears patent cases, and every citizen interested in the U.S. economy making a sustainable recovery from our current financial crisis and continuing to be the world's most innovative and successful economy. This book lays out the case for why every business organization, no matter how large or small, needs to have an intellectual property strategy that is consistent with its overall business strategy. As stated in the book, "a business plan without an Intellectual Property (IP) strategy is simply philanthropy".
The authors set out in clear and concise terms all the reasons and approaches that a 21st century business enterprise must take with respect to creating a sustainable advantage for long run survival and success. While patents were indispensable in the industrial era, in a post-industrial, global, knowledge-based economy, patents and other IP protection are the key building blocks upon which any organization must build a strong and lasting foundation. As a founder of Aurigin Systems, Inc., creator of an early software platform for managing patents in their competitive landscapes and as a founder of IP Checkups Inc., providing competitive patent landscape and patent monitoring and alerting services, the strategies presented in this book are critical steps to building a successful company in today's world. Without strong IP protection, once a product or service is put on the market, competitors have been given a free meal ticket to feed off of your hard earned developments and inventions, all at no cost. By building a strong patent portfolio as the underpinings of a business, even if the business itself fails in the marketplace, the IP portfolio will still provide the owners a measure of realizeable value.
The "Invisible Edge" makes an excellent case as to why the current efforts to "reform" the U.S. Patent System are misguided and not beneficial to the majority of companies operating in the U.S. Those involved in Patent Reform legislation should read this book to understand why Article 1, Sec. 8 of the U.S. Constitution is so fundamental to the continuing success of the U.S. economy. Further weakening of the U.S. patent system will undermine, not only innovation, but the all important investments necessary to bring innovations to the marketplace. |
Who Knew David Bowie Was an IP Icon?
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| Review Date: March 26, 2009 |
| Reviewer: Penny Reads, New York, NY United States |
If you're panicking about the economy...and how you're going to stay in business [or want to figure out what companies are still smart investments], you've got to read this book. It bascially says: "own your ideas [IP]...or fail." That's what my father told me when the Japanese were being brought in to "learn" his company's solid state technology in the 50's....and he was right. We gave our IP away, and our economy has suffered ever since.
THE INVISIBLE EDGE not only drives this concept home, but provides a clear and comprehensive guide to help managers identify and manage IP assets. It is also filled with dozens of stories that illustrate each point. And yes....unlike your ordinary buiness book, these guys really tell you STORIES [not just dry case histories]. It's actually a really fun book to read. And, the IP they reference is not just high tech stuff. There are tales of golf balls, razor blades, orange juice...and even pop music. I not only learned a lot, I actually enjoyed the book.
IP is clearly the key our county's competitiveness and economic future. If you've got an extra few dollars, don't just buy a copy of the book for yourself, send one to your congressman. I did. |
An unusually substantive business book
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| Review Date: July 24, 2009 |
| Reviewer: Alan G. Ampolsk, North Bethesda, MD USA |
The average business book is really a business article, padded out to book length via stings of anecdotes and repetition of the obvious. Not in this case. Blaxill and Eckardt have a substantive case to make - namely, that in the search for sustainable competitive advantage, most managers are looking in the wrong place. According to the authors, conventional management efforts - focused as they are on operational efficiencies and "best practices" - are bound to fail, because in an era of hypercompetition, traditional advantages can't be defended for any length of time.
Instead, they argue, intellectual property is the only key to lasting advantage - and IP strategy should be the chief focus of senior management's attention. To delegate IP to specialists from the legal and engineering camps is to fail.
Blaxill and Exckardt support the argument with extensive, detailed examples of companies that got their IP right and those that didn't, as well as policy decisions that strengthened or weakened IP positions. In particular the story of Xerox - effectively stripped of its IP in the '70s in a misguided government effort to ensure competitiveness. Overseas competitors thrived on the IP they were able to access, and Xerox never recovered. It's a cautionary tale for 21st-Century patent policy.
Blaxill and Eckardt are IP traditionalists - they favor strong protection. They're definitely not members of the Wickinomics/"information wants to be free" camps. There's a place for IP collaboration in their world, but it needs to be balanced against the recognition that too much sharing at the wrong time risks diluting a company's sole source of value. Not a fashionable viewpoint by any means, but one that needs and deserves to be heard.
For senior executives struggling to set strategic direction in challenging times... for policymakers who need to lay the foundations for a healthier, more competitive economy... and for investors who need a firmer basis than quarter-by-quarter financial performance to value their holdings... The Invisible Edge provides a worthwhile new lens. Recommended. |
A Must-Read for anyone interested in the future of US innovation
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| Review Date: March 18, 2009 |
| Reviewer: Gerren Crochet, Silicon Valley, United States |
This book sits among very few whose ideas talk about the economy behind the economy: Intellectual Property. Eckardt and Blaxill connect the dots from innovation to macroeconomics with a deep understanding of causality and let you know why it matters along the way.
So if you're a business student, an investor, a CEO, or anyone who wants to understand a seldom-talked-about but extremely important economic paradigm - I highly recommend this book. |
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