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Archived updates for Wednesday, April 27, 2005

Investor Expectations Go Unmet by I/P Managers

According to a study of European I/P practices by KPMG, "there is a dangerous separation between ostensible management authority and financial
accountability for intellectual property assets. It is difficult to think of another class of corporate asset which is so highly regarded as a source of value, but which is the victim of such careless guardianship. . . .There is clearly something of an expectation gap between what investors are looking for and what companies are doing."

Here are some of the results of their survey of 300 leading companies:

  • 58 percent of companies researched have created or plan to create a
    documented IP strategy.
  • Most boards – 72 percent - take some role in IP management, only one
    in three participate in setting IP strategy.
  • In more than 40 percent of companies, IP remains the preserve of the
    Legal Department. In only 24 percent of companies is there a separate
    IP director.
  • The majority of companies – 56 percent - do not actively seek to
    commercialise their IP. Yet they estimate that such action could
    benefit each company substantially. Amongst those that put a figure
    on it, the amount forfeited through not commercialising their IP assets
    was on average Euros 6.6m a year.
  • Of those companies that licence out their IP, those that expect
    increases in licensing income outnumber those who predict falls
    by eight to one.
  • 71 percent of all respondents have no performance indicators for IP.
  • 46 percent of all companies do not report at all to the board on IP
    matters.
  • 52 percent choose to leave IP outside the scope of internal audits.

For more on this topic, see "Businesses Need I/P Strategy with Metrics."

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