LAWS8148 Intellectual Property Strategy and Management NEEDHAM, Oliver

RESEARCH QUESTION ID: 3422970

“The most important ingredient in creating and maintaining

a successful IP management program is leadership. Discuss.”

This essay will consider whether leadership is the most important ingredient in creating and
maintaining a successful IP management program - a statement that postulates that a single element in
what is a multi-faceted management system can gain and sustain pre-eminence over other elements.

There is no one size fits all program for IP management and any successful program will
continually adapt to meet the needs of the organisation it serves, as those needs evolve over time.
However, there is a growing consensus around what a successful IP management program should look
[1]
comprise. This consensus can be distilled into a set key core ingredients, each one of needs to be
addressed, to a greater or lesser extent, for an IP management program to be successful.

First off, I d like to set out a few caveats. It should be accepted that the importance attributed to
each of the key core ingredients will likely shift as the IP program develops. However, in discussing the
importance of leadership and other key core ingredients in the success of an IP management program, I
will treat the stages of creation and maintenance as being part of a continuum as opposed to two
separate stages. Furthermore, each of the key core ingredients interacts with the others but an analysis
of the impact of this is beyond the scope of this essay. Suffice to say that the key core ingredients will
always be affected by variables that impact on an organisation and that each ingredient will be weighted
differently from organisation-to-organisation and program-to-program. Likewise, the measure of an IP
management program s success will vary according to organisation-specific goals

The key core ingredients in any IP management program are Leadership, Planning, Strategy,
Funding, Education, Communication, Systems, Policies, Incentives, Management, Metrics and
Implementation and this essay will look at these to determine whether there is indeed a standout
ingredient, and whether that ingredient is Leadership.

Just as IP derives its value in context , so IP management will mean different things to different
[2]
organisations (depending on both their position on the IP Value Hierarchy and their business goals). In
many cases, they will mean different things within an organisation. A review of the available literature,
much of which is based on interviews with executives applying the principles of IP management,
suggests that in broad terms certain of the key core ingredients emerge as being of particular
importance in the creation and maintenance a successful IP management program.

                                                                                                                       
1
Useful summaries of the IP management function can be found in PricewaterhouseCoopers, Exploiting Intellectual Property in a
Complex World (2007, Technology Executive Connections, Vol. 4); Adam Liberman, ‘Establishing and Maintaining an IP
Management Program in a Publicly Funded Research Institution’ (2009) 44 Les Nouvelles 255; and Paul Cooperrider, ‘The
Imperatives Around Intellectual Property Asset Management’ (2006) 49 Advocate (Idaho) 25  
2
Suzanne S. Harrison and Patrick H. Sullivan, Edison in the Boardroom Revisited (New Jersey, John Wiley & Sons Inc, 2011), 17

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RESEARCH QUESTION ID: 3422970

The literature also reveals a common approach in establishing IP management programs, which
could be summarised as:

§ Understand the environment and strategic imperatives of the organization;

§ Ensure that the leadership understands the importance of IP and commits sufficient resources to
develop an IP management program;
§ Find the champion who will own the program and drive a culture of IP through the organization;
§ Create processes and systems such as education programs; invention mining and measurement
systems; and IP inventories to help the organisation manage its IP portfolio;
§ Routinely audit, value and review the organisation s IP portfolio to ensure relevancy to the
business strategy;
§ Develop an enforcement program that actively seeks out infringement of, or by, the Company s IP
and acts accordingly.

Securing the support of the organisation s leadership features prominently in the literature, but is
Leadership the most important of the key core ingredients?

In the context of IP management, the Leadership ingredient refers to the business leaders of the
organisation into which an IP management is being introduced or improved. The organisation s
Leadership must not only understand the key IP management issues and the value proposition of IP
management to the organisation, they must also actively express their support within and outside their
organisation. In short, they must be IP champions , evangelizing the benefits if IP to their organisation.
The importance of this support cannot be overstated: Unless there is a disconnect between the
leadership of an organisation and the culture of an organisation, it is highly unlikely that an IP
[ 3]
management program will succeed without overt support from leadership.

So why is the Leadership ingredient so important?

First off, getting Leadership buy-in is critical to the creation of an IP management program. Sara-
Jayne Adam quotes a number of executives who have successfully implemented an IP management
program at their respective firms and what comes out very clearly is the importance of getting
Leadership to buy-in to the IP management program, and to actively support those tasked with
managing it. Palo Alto Research Centre s Damon C Matteo is quoted as saying, The role [of CIPO] must
have a clear and visible mandate from the most senor management if it is to succeed ‒ IP touches all
aspects of the corporation and only that level of senior support provides the necessary access and cover
[4]
to realize the role s importance . It is a view that Kevin Rivette, co-author of Rembrandts in the Attic ,
shares: What is essential is that the CEO is intimately involved and there is buy-in from the senior
management team . [5]

                                                                                                                       
Adam Liberman, UNSW Lecture, 11 September 2012  
3

4
Sara-Jayne Adams, ‘Fighting for a space in the C-Suite’ (2008) 30 Intellectual Asset Management Magazine 27, 32
5
Ibid, 33

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RESEARCH QUESTION ID: 3422970

Adams findings are consistent with Markus Reitzig s earlier research, in which he surveyed
senior IP executives from 34 companies. The research highlighted the substantial importance that
senior IP managers attribute to top management s direct engagement in IP-related strategic decision-
making and whilst it made clear that there is no one size fits all strategy for intellectual property , one
common strategic success factor across the companies studied was corporate management s genuine
involvement in top-level IP-related projects . [6]

Second, only active endorsement by a firm s Leadership can stimulate company-wide

engagement in an IP management program. In relating the development of P&G much lauded
Connect+Develop strategy, alumni Larry Huston and Nabil Sakkab shared a cardinal rule: Never launch
[7]
without a mandate from the CEO . Likewise, P&G s nascent Global Licensing unit didn t gain traction
until then CEO Durk Jager issued a highly visible endorsement which provided an immediate and lasting
fillip for Global Licensing.[8] An original member of the team recalls, Looking back, there was one
element in our early work that really opened the door and enabled our success. And that was identifying
a champion within the Company to support our work. That proved much more valuable than even
[9]
finding the golden technology to license.

Third, opening a direct reporting line to Leadership demands accountability that in turn lends
credibility to the program. Devinney and Liberman found that best practice firms ensure that the IP
component of the corporate ledger receives notice and attention from the very senior management,
sometimes to the level of the board of directors . [10]

Fourth, Leadership s ongoing support plays an import role in maintaining the IP management
program. In 2005, the Commonwealth Auditor General placed Leadership and Corporate Support at
the centre of a recommended IP management framework (as shown in the chart below) and stated that,
Leadership and corporate support are critical to the success of any agency approach to intellectual
property management, as they underpin and sustain the management framework . [11]

                                                                                                                       
6
Markus Reitzig, ‘How Executives Can Enhance IP Strategy and Performance’ (2007) 49(1) MIT Sloan Management Review 37, 41.
At [43] the author concludes: “involving the corporate top-level management early in the IP-planning process appears to be a
key success factor on obtaining high returns from innovation”.
7
Larry Huston and Nabil Sakkab, ‘Connect and Develop: Inside Proctor & Gamble’s New Model for Innovation’ 2006 84 (3)
Harvard Business Review 58, 65
8
Harrison and Sullivan, above n 2, 174-177
9
Harrison and Sullivan, above n 2, 174-177
10
Devinney and Liberman, above n 1, 22
11
The Auditor-General, ‘Intellectual Property Policies and Practices in Commonwealth Agencies’ (Audit Report No.25, 2003–04) 47

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RESEARCH QUESTION ID: 3422970

The overwhelming anecdotal evidence is that unequivocal and visible support of Leadership is of vital
importance to the success of the IP management program. Yet can it said to be the most import
ingredient? Do any of the other key core ingredients have a claim to that distinction?

In my view, the critical requirement of the IP management program is that it aligns itself with the
strategies of the organisation, and where necessary, to those of individual business units; it is here that
the Strategy ingredient seeks to exert itself. To be successful, the IP program must closely align and
[12]
integrate IP strategy with business strategy, no matter the size of the organisation or its stage of
[13 ]
development. Treasury Wines Estates Owen Malone, for one, cannot rate Strategy more highly .
However, can it be said to be the most important ingredient where it is reliant on the Leadership to
clearly articulate the business goals and mandate the alignment of the IP program to them? I am not so
sure.

For many organisations, Education is the pre-eminent ingredient in IP management .[14] Harrison
and Sullivan interviewed a number of IP executives who underlined the importance of the role Education
in building a broad base of awareness and understanding of why IP is important to the firm .[15]
Education derives its importance as a key core ingredient in no small part because IP strategy needs to
be a part of all the core activities through the company [and] the main process of integrating IP into
[16]
marketing and R&D is one of education . Education is a first step in encouraging the organisation to
think about how to maximize value from its IP portfolio, and to minimize the risk of litigation and

                                                                                                                       
12
See, Devinney and Liberman, above n 1, at [20] “The singular lesson that comes from our best practice firms is that IP cannot
stand in isolation to the general strategic posture of the firm”.
Owen Malone (Director of Intellectual Property at Treasury Wine Estates), UNSW Lecture, 25 September 2012  
13

14
Peter Lightbody (IP Counsel at NICTA), UNSW Lecture, 19 September 2012
15
Harrison and Sullivan, above n 2, 66
16
Timothy M. Devinney and Adam Liberman, The Management of Intellectual Property in Australian Organisations (Sydney,
Freehills and AGSM, 2003), 20  

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RESEARCH QUESTION ID: 3422970

[17]
opportunities lost . Yet, as vital as Education is, especially if a cultural change is required, it relies on
Leadership to put it on the corporate agenda and to promote its benefits company-wide.

Where Strategy and Education may rely on Leadership to drive home their importance, all three
rely on Communication to be effective. Good Communication enables the business to relate to the
fundamental IP value proposition, provides the common language to gain alignment with the business
and is the basis for education and improving awareness of IP, all of which greatly enhance an IP
management program s chance of success. Conversely, inadequate communication can be the Achilles
heel of otherwise proficient IP managers and can create barriers to business-IP alignment. For Owen
Malone, the importance of Communication cannot be over-stated: Leadership and Strategy are a given
but Communication is the most important; it s the one you can t afford not to have. It s the oft forgotten
[18]
ingredient that pulls all the others together. And yet, whilst it is the lifeblood of the organisation,
Communication in itself cannot command company-wide attention without the endorsement of
Leadership.

Amongst the other key core ingredients, the importance of Funding is clear: whether through a
corporate-funded or user pays model (or a combination thereof) someone needs to pay for the IP
management program. Whilst the optimal funding arrangements will be specific to the individual
program and its value proposition, decisions made around Funding can have a profound impact on the
success of the program. Proctor & Gamble s experience with Global Licensing is a case in point. Global
Licensing was established as a profit centre with income generated by its out-licensing of a business
unit s IP flowing to it, and not to the business unit holding the IP. This made selling the idea to P&G s
business units difficult. However, P&G s financial reporting restructure in 1999 meant Global Licensing
stopped being a profit centre, so licensing revenues started to flow back to the owner of the IP. This shift
[19]
proved a game-changer and one of the main reasons that the program became successful. Yet, as we
saw earlier in this essay, this same program also required buy-in from Leadership to get up and running
and a highly visible Leadership endorsement to really establish itself.

Management contributes to the success of the IP management program through its level
accountability, transparency, seniority and expertise. The higher the seniority the more organisational
respect the function will have; indeed, The greater seniority the CIPO has, the better .[20] The logic is that
from seniority flows authority, credibility and leadership within the organisation. Interestingly,
Management is predicated on successful Leadership, whether the organisation s or the CIPO s. Integral to
Management is Metrics, and I d be remiss not to quote the familiar adage: What you cannot measure,
you cannot manage . And yet, within the realm of an IP management program, Metrics cannot be said to
be the most important ingredient.

                                                                                                                       
17
Joseph Richard Falcon, ‘Managing Intellectual Property Rights: The Cost of Innovation’ (2004) 6 Duquesne Business Law Journal
241

Owen Malone, above n 13  

18

19
Harrison and Sullivan, above n 2, 174-177
20
Sara-Jayne Adams, above n 4, 34 quoting Ruud Peters, CEO, Philips Intellectual Property & Standards

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RESEARCH QUESTION ID: 3422970

The remaining key core ingredients are rounded out by Planning, a key part of which is the
exploration of leadership styles so that the IP management recipe can be tailored to the organisation s
tastes; [21] Implementation which relies for its success on identifying the core expertise required based on
the focus of the IP management program and the stage of its development; simple, flexible and reliable
Systems which need to relate to key processes where IP features in an organisation's activities; Policies
which must facilitate ongoing internal and external engagement involving IP and IP management,
characterized by clear messaging, widely communicated; and Incentives which, if needed, encourage the
behaviour that supports the achievement of the value propositions of IP management. Whilst each is
important in its own right, none of these could be nominated as the most important ingredient.

Each ingredient plays an important and distinct role in the overall success of an IP management
program, but to a large extent their pre-eminence is determined by the extent to which they interact
with, or impact upon, the others. And whilst the importance of the ingredients will vary from case-to-
case, certain ingredients routinely touch other parts of the IP program in a profound way, which marks
them out as pre-eminent. In this way, a leadership group appears from within the key core ingredients:
Strategy, Education, Communication and Leadership, each of which touch every aspect of the IP
management program and go a long way to establishing its success.

As we have seen, many organisations see Strategy as critical to the success of the IP management
program ‒ and for good reason. Without aligning itself to the broader business goals any IP program will
struggle to be seen as successful. So too, given the general lack of understanding about IP and intangible
assets, Education is an important key core ingredient. What determines its success is the How of
Education rather than the What , and here Communication plays a significant role. Yet Leadership exerts
its influence even more pervasively. Devinney and Liberman explain it thus:

IP is not created by senior management, but by employees operating at or below

the level of middle management. Hence, the most direct and operational way of
managing the firm s IP is to make it self-managing by inculcating the relevant
employees with an IP-centric view of their responsibilities .

Jaruzelski et al recently asserted that, Culture matters, enormously. Studies have shown again
and again that there may be no more critical source of business success or failure than a company s
[22]
culture ‒ it trumps strategy and leadership. Whilst I agree with the first part of this statement, I also
believe that leadership drives cultural change. In the context of an IP management program, Leadership
derives its pre-eminence amongst the key core ingredients from culture and it is culture that determines
the level of awareness, the skilful operation and ultimate success of the IP management program.

This observation underpins my fifth argument in favour of Leadership as the most important
ingredient in a successful IP management program. The biggest single factor determining the success of
any organisation-wide management program is culture. Whilst Education, Processes and Systems help to

                                                                                                                       
21
See, Adam Liberman, above n 1, 256 for the author’s experience at CSIRO in assessing “where the power lay to ensure the
program was approved.”
22
Barry Jaruzelski, John Loehr and Richard Holman, ‘Why Culture is Key’ (2011) 65 strategy+business 1, 3

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RESEARCH QUESTION ID: 3422970

shape employee behaviour, culture is seeded from the top-down. By definition, culture pervades the
organisation, and will determine how well the system or program works. It is here that Leadership plays
its most critical role in establishing and maintaining a successful IP management program.

It is worth remembering that in dealing with the key core ingredients, as with any recipe, a
successful outcome relies on how well the ingredients interact with one another. No one ingredient can
drive the success of an IP management program in isolation, and in seeking to identify a single most
important ingredient, it should not be inferred that this is done at the expense of the others. A successful
IP management program requires a combination of visible leadership; consistent and widespread
communication and education; clear policies and accountability; simple and reliable systems and
processes; strong alignment with business strategy; and adequate funding and incentives. It has to be
well planned and effectively implemented. However, for its ability to shape an organisation s culture, I
would argue that Leadership stands first amongst equals.

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RESEARCH QUESTION ID: 3422970

BIBLIOGRAPHY

Sara-Jayne Adams, Fighting for a space in the C-Suite (2008) 30 Intellectual Asset Management Magazine 27

William Barrett, Christopher Price and Thomas Hunt, Global Innovation and the Urgency of Strategic Intellectual
Property Management (2007) 42 Les Nouvelles 545

Peter Bawden and Stephen Geary, From Innovation to Commercialisation 2007 22 Intellectual Asset Management
Magazine 14

L.G Bryer, S.J. Lebson and M.D. Asbell, Intellectual Property Strategies for the 21st Century Corporation (New Jersey,
John Wiley & Sons Inc, 2011)

Paul Cooperrider, The Imperatives Around Intellectual Property Asset Management (2006) 49 Advocate (Idaho) 25

John Cronin and Kate Shore, Managing IP in open innovation partnerships in Joff Wild (Ed) IP in the Life Sciences
Industries 2009 (The White Group Ltd, 2009) 3

Andrea Gabor, The Promise (and Perils) of Open Collaboration (2009) 56 strategy+business 1

Paul Germeraad, Integration of Intellectual Property Strategy with Innovation Strategy 2010 53 (3) Research-
Technology Management 10

Michael A. Gollin, Driving Innovation: Intellectual Property Strategies for a Dynamic World (New York, Cambridge
University Press, 2008)

Joseph Hadzima, Bruce Bockmann and Alexander Butler, IP in early-stage commercial and investment success
(2010) 40 Intellectual Asset Management Magazine 49

Suzanne S. Harrison and Patrick H. Sullivan, Edison in the Boardroom Revisited (New Jersey, John Wiley & Sons Inc,
2011)

Larry Huston and Nabil Sakkab, Connect and Develop: Inside Proctor & Gamble s New Model for Innovation 2006
84 (3) Harvard Business Review 58

Barry Jaruzelski, John Loehr & Richard Holman, Why Culture is Key (2011) 65 strategy+business 1

David Kline, Uncaptured Fortunes in Intellectual Property (2008) 50 strategy+business 7

Adam Liberman, Establishing and Maintaining an IP Management Program in a Publicly Funded Research
Institution (2009) 44 Les Nouvelles 255

Trevor Little, Tackling IP change at Pernod Ricard in Joff Wild (Ed) Brands in the Boardroom 2010 (The White
Group Ltd, 2010) 11

Trevor Little, Tackling IP change at Pernod Ricard in Joff Wild (Ed) Brands in the Boardroom 2010 (The White
Group Ltd, 2010) 11

Ulf Petrusson and Bo Heiden, CIPO: means, ends or impediment? (2008) 31 Intellectual Asset Management
Magazine 51

PricewaterhouseCoopers, Exploiting Intellectual Property in a Complex World (2007, Technology Executive

Connections, Vol. 4) accessed at http://www.pwc.com/extweb/pwcpublications.nsf/docid/F5DBAFA7

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LAWS8148 Intellectual Property Strategy and Management NEEDHAM, Oliver

RESEARCH QUESTION ID: 3422970

B3F4501D852570830007AD84/$File/tecv4ip.pdf

Markus Reitzig, Strategic Management of Intellectual Property (2004) 45(3) MIT Sloan Management Review 35

Markus Reitzig, How Executives Can Enhance IP Strategy and Performance (2007) 49(1) MIT Sloan Management
Review 37

Joseph Richard Falcon, Managing Intellectual Property Rights: The Cost of Innovation (2004) 6 Duquesne Business
Law Journal 241

Michael Sharer and Timothy L. Faley, The Strategic Management of the Technology Transfer Function ‒ Aligning
Goals with Strategies, Objectives and Tactics (2008) 43 Les Nouvelles 170

John Sterling and Charles D. Murray, Reaping value from intellectual property: DuPont s strategic approach
achieves global growth 2007 35 (1) Strategy & Leadership 36

Robert C. Wolcott & Michael J. Lippitz, The Four Models of Corporate Entrepreneurship (2007) 49(1) MIT Sloan
Management Review 75

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