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Wednesday, April 6, 2011

IP and IC-- Best mates or ships in the night?

One of my favourite images (strictly of the armchair variety, since I am likely to become sea-sick just watching my grandchild's toy boat float in the bath tub) is the notion of "ships passing in the night." This image of mutual oblivion, so near and yet so far, carries with it both the promise and failure of potentially compatible subjects that seem largely unaware of the existence of one another.

Roughly seen, one can view the terms "intellectual property" and "intellectual/intangible capital" nominally, if not conceptually, as ships in the night. In the one corner we have IP, the purview of lawyers, with a pedigree reaching back seven centuries. Defined as consisting of a bundle of legal rights, most prominently patents, copyright, trade marks and trade secrets, I imagine that IP is the professional mother's milk for many readers of tytoc collie.

In the other corner is the upstart notion of "intangible capital" or "intellectual capital" (either way, IC for short). Developed within the context of MBA and management education, IC is variously described in terms of a broad set of intangible knowledge assets that have increasingly become the prime driver of value creation in the 21st century. Colleagues of this Kat--Mary Adams and Michael Oleksak--in their elegant book, Intangible Capital, have defined the term as "the combination of all the intangible in an organization."

I can already hear my IP colleagues groan about the broad swathe and lack of precision of this definition and, from the IP perspective, such a complaint may have merit. But in another sense this criticism is a bit unfair. IC comes to reorient managers (and their accountants), from focusing on the notion of assets as being primarily tangible objects that one can count, manufacture and sell, to the concept of enterprise knowledge as the value proposition driver of the 21st century. Under this view, the ultimate question is "how can I extract value from my IC?"  While it may seem trivial to us IP practitioners, the reorientation from physical assets to knowledge-based intangible assets is still work in progress for the management profession and the professional schools that train them.

If you don't believe this, check the course offerings of most of the leading MBA programs and search for how many courses are devoted to IC. As a friend who teaches in one such MBA faculty (and who offers one of the few dedicated courses in the area) noted, if such courses are to be found, they are likely to be the domain of adjunct lecturers rather than full-time staff. For full-time faculty, research in IC is only for the fool-hardy and it is hardly the route to tenure at the schools that adorn the top 10 (or 20 or 30) list of MBA programs.

All of this is a backdrop to this Kat's ongoing paedagogical dilemma. For several years he has been teaching a course (required, to boot) that has sought to consider IP, in its broadest sense, within the context of managerial strategy. Whether he has done so more or less successfully is for the students to decide. Students, at first beset with fear and trembling, expecting perhaps "IP law lite", have joined me in my efforts to navigate between IP and IC.

And here lies the challenge: just how much IP should be presented as part of any IC course? Over-emphasize IP and your encounter grumblings that the course threatens to become "IP lite" for non-lawyers. Devote only slight attention to IP in favour of the notion of IC, and you face the fundamental question of whether one can manage IP (as a subset of knowledge-based asssets) without personally having much more than a cursory understanding of the IP subject-matter. Stated otherwise, are IP and IC meant to be "ships in the MBA night", or is a meaningful mutual encounter possible? For one, this Kat is still searching for the most effective answer to this question.

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