Profiting from intellectual

Profiting from Intellectual Capital Profiting from Intellectual Capital Extracting Value from Innovation Patrick H Sullivan Joseph J Daniele, Ph.D., is Corporate Manager of Intellectual Properties and heads the Corporate MIP Office at Xerox Corporation He is responsible for senior management review, revision, and approval of all Xerox intellectual property transfers worldwide, as well as corporate IP strategy and product infringement analyses and follow-up Leif Edvinsson is the world's leading expert on intellectual capital (Ie) As Vice President and newly named Corporate Director of Intellectual Capital at Skandia AFS of Stockholm, Sweden, he has been a key contributor to the theory of IC and oversaw the creation of the world's first corporate intellectual capital annual report Stephen P Fox is Associate General Counsel and Director of Intellectual Property at Hewlett-Packard Company, headquartered in Palo Alto, California He has overall responsibility for the Intellectual Property Section of the Legal Department comprising 90 professionals in Europe, Asia and the United States He received a bachelor's degree in electrical engineering from Northwestern University and a Juris Doctorate from George Washington University Law School Mr Fox has been with Hewlett-Packard Company for 30 years Paul B Germeraad, JD, Ph.D., is Vice President and Director, Research and Development at Avery Dennison Dr Germeraad has formerly worked at both James River Corporation and Raychem in senior technical management positions Peter C Grindley, Ph.D., is a Senior Economist at the Law and Economics Group, Inc He has been both a Visiting Professor of Economics at the University of California, Berkeley, and an Assistant Professor of Economics at London Business School Dr Grindley has authored numerous publications in the area of technology and has broad experience in economic consulting in the areas of intellectual property and licensing, competitive strategy, and regulation, especially in high technology industries Harry J Gwinnell, JD, is Assistant General Counsel, Intellectual Property, and Assistant Secretary at Eastman Chemical Company He has prior experience as Assistant Patent Counsel at United Technologies Corporation and Patent Examiner at the United States Patent and Trademark Office He has served as President of both the Tennessee and Connecticut Intellectual Property Associations and is currently a member of the Board of Governors of the Tennessee Intellectual Property Law Association Kelly H Hale is the Intellectual Property Manager for the Rockwell International Semiconductor Systems Division His background includes several years of semiconductor device development work at various companies, including American Micro Systems, Inc., and RCA (now Harris Semiconductor) He graduated from Idaho State University and received his law degree from the University of Denver vi ABOUT THE CONTRIBUTORS vii Brian P Hail, Ph.D., is an international values consultant to education, government, and industry throughout the world He specializes in the development of tools and methods for values measurement that enable leaders of international organizations to improve the alignment and agility of those institutions Currently, he is Chairman of the Board and Chief Executive Officer of Values Technology Martin L W Hall, Ph.D., is a management consultant and frequent lecturer His research focuses in issues of systems thinking and human values as they relate to organizational intervention and transformation Dr Hall is a Principal in Values Technology of Santa Cruz, California Past experience includes working in the software industry in various management and consulting roles with a focus on quality issues Suzanne S Harrison, MBA, has worked for over ten years in the emerging field of intellectJal capital management (ICM) Prior to her current assignment, she was with Coopers & Lybrand's Financial Advisory Services as a financial consultant, specializing in intellectual property issues She has also worked for Hewlett-Packard as a financial analyst She has conducted economic and financial analyses in support of intellectual property litigation and has advised clients on maximizing value from their patent portfolios Ms Harrison is the recipient of the Licensing Executives Society North America Fellowship Pamela Jajko, BA, MS, is Manager of the Library Information Center (LInC) and the Corporate Record Systems Department at Roche Bioscience Sam Khoury, Ph.D., is the Senior Intangible Asset Appraiser of The Dow Chemical Company He specializes in the valuation of patented technology, trade secrets, and valuation of over 200 patents and trade secrets that range in value from $0 to $50 million He is the Chairman of the Valuation and Taxation committee at Licensing Executives Society (LES) Karl Laento, LLM, is Corporate Vice President for Telecom Finland Corporation Formerly, she was with the Neste Group, where she served as part of the Group Marketing Company and Special Products and Gas Division Ms Laento is President of the Finnish Basketball Federation and is a member of the Board of the Olympic Committee Willy Manfroy is Director, Corporate Development, at Eastman Chemical Company in Kingsport, Tennessee Previously, he was Manager in the Mergers, Acquisitions, and Licensing Department of The Dow Chemical Company Mr Manfroy is the current President of the Licensing Executives' Society USNCanada, an international professional organization devoted to technology transfer and licensing Lorraine S Morrison, MA, has worked at Avery Dennison for the past 11 years and is currently Manager, Intellectual Property for the Corporate Research Center In addition to her role in valuing the intangible assets of Avery Dennison, she works to integrate the knowledge learned with strategic planning James P O'Shaughnessy, JD, is Vice President and Chief Intellectual Property Counsel, Rockwell International Corporation Before assuming that position, Mr O'Shaughnessy was a Senior Partner at Foley & Lardner, where he was a leader in the growth of the firm's intellectual property practice He is founder of Innovatech Co., a company devoted to the development of innovation strategies Mr O'Shaughnessy is a frequent lecturer and an author on a wide range of intellectual property topics Gordon P Petrash is the Global Director of Intellectual Asset and Capital Management for The Dow Chemical Company, one of the world's largest chemical companies Mr Petrash has been a speaker at numerous conferences on the subject of Intellectual Asset viii ABOUTTHECONTmBUTORS Management and its implementation He has authored and contributed to a number of articles related to the work his company has done in this area Eugenie Prime, MA, MS, has been Manager of Corporate Libraries at Hewlett-Packard Company since 1987 Before that, she headed a large hospital library while simultaneously serving as President of ClNAHL Corporation, publishers and database producers of the Nursing and Allied Health Index Kevin G Rivette, JD, is cofounder and President of SmartPatents, Inc., where he is responsible for the strategic vision and direction of the company He has served with several high-tech and investment-related companies As a patent attorney, Mr Rivette has represented several high-tech clients, including Apple Computers and Seeq Technology TrenttE Walker, Ph.D., is a Professor at the University of California at Berkeley He has writte for various journals in the areas of mathematics and engineering, and specializes in operator algebras and H control Paul B Westberg, MBA, is Senior Financial Analyst at Genentech, Inc He has pioneered several financial and strategic planning initiatives involved with managing the uncertainties and value of innovations in the development pipeline He has conducted financial and economic valuations of knowledge companies as well as of developing technologies He has also advised companies on the application of ICM frameworks and techniques for the resolution of client problems Contents I Foreword Preface xii xiv Acknowledgments xvii • Part I Definitions, Concepts, and Context Introduction to Intellectual Capital Management Patrick H Sullivan ICM Group, LLC Basic Definitions and Concepts Patrick H Sullivan 19 ICM Group, LLC Advanced Definitions and Concepts Patrick H Sullivan 35 ICM Group, LLC Culture and Values Management: Context for the Development and Measurement of Intellectual Capital Brian P Hall 43 Values Technology In Search of a Paradigm Paul B Westberg 59 Genentech, Inc Patrick H Sullivan ICM Group, LLC The Confusion of the Capitals: Surveying the Cluttered Landscape of Intellectual "Capitals" and Terminology Martin L W Hall, Ph.D 76 Values Technology Irreconcilable Differences? Managing the Knowledge Creation Interfaces Peter C Grindley Law & Economics Group, Inc Patrick H Sullivan ICM Group, LLC ix 84 x CONTENTS Part II Intellectual Property Management Extracting Value from Intellectual Property Patrick H Sullivan ICM Group, LLC The IP Portfolio as a Competitive Tool Suzanne Harrison ICM Group, LLC 103 119 Kevin Rivette SmartPatents, Inc 10 ~reating the Portfolio Database Kelly Hale Rockwell International 11 Intellectual Property Management: From Theory to Practice Stephen P Fox Hewlett-Packard Company 12 Intellectual Capital Development at a Spin-Off Company Willy Manfroy Fairfield Resources International, Inc 129 142 157 Harry Gwinnell Eastman Chemical Company Part III Intellectual Asset Management 13 Extracting Value from Intellectual Assets Patrick H Sullivan ICM Group, LLC 14 The Intellectual Asset Manager Joseph J Daniele Xerox Corporation 15 Intellectual Asset Management at Dow Chemical Gordon Petrash Dow Chemical Company 16 Intellectual Asset Management at Avery Dennison Lori Morrison and Paul Germeraad Avery Dennison 17 Intellectual Asset Management at Neste Kari Laento Neste 173 186 205 221 242 xi CONTENTS 18 Making It Happen Patrick H Sullivan 253 ICM Group, LLC Part IV Intellectual Capital Management 19 Measuring and Monitoring Intellectual Capital Suzanne Harrison 267 ICM Group, LLC Trent Walker University of California at Berkeley • 20 Managing Intellectual Capital at Skandia Leif Edvinsson 279 Skandia 21 The Role of Intellectual Capital in Valuing Knowledge Companies James P O'Shaughnessy 284 Rockwell International Corporation Patrick H Sullivan ICM Group, LLC 22 Reporting on Intellectual Capital Patrick H Sullivan 298 ICM Group, LLC 23 Understanding and Managing Knowledge Assets for Competitive Advantage in Innovation and Product Development Joseph J Daniele 305 Xerox Corporation 24 Maintaining the Stock of Intellectual Capital Pamela Jajko 319 Roche Bioscience Eugenie Prime Hewlett-Packard Company 25 The Future of Intellectual Capital Patrick H Sullivan 328 ICM Group, LLC Appendix Valuing Intellectual Properties Sam Khoury, Ph.D The Dow Chemical Company 335 Foreword The ~orldwide emerging focus on intellectual capital is part of a search for more intelligent approaches to managing the corporate enterprise The attention being given to intellectual capital has grown from a ripple to a groundswell as ever new insights demonstrate that intellectual capital is one of the major forces driving corporate performance and earnings Not only current performance, but of even greater strategic importance, we now know that it is the firm's intellectual capital that defines its future In its broader context, intellectual capital is comprised of human capital and structural capital Its subelements include organizational capital, customer capital, supplier capital, and more These terms are not new What is new is the energy and commitment of organizations trying out the concepts surrounding intellectual capital to leverage ideas into value Terms like intellectual asset management, intellectual property management, and knowledge management are frequently being interchanged as firms describe their new management focus The crosscompany confusion created by this emerging taxonomy does not prevent the advancement of the discussion of intellectual capital management or any of the other focused discussions regarding these terms Though each of these terms is unique, they all concern the intangibles of an organization and how to better leverage and manage them for value Intellectual capital is about the creation of value out of human talent, transforming it through the resources provided by the firm's structure, and multiplying it on a global scale by the value extraction recipes contained in this book In many corporations, there are a lot of hidden values, imbedded in both the human and structural capital of the firm Corporations recognizing the importance of this hidden value have been working to understand how to release its potential through systematized value extraction processes Dow, Skandia, and the member companies of the ICM Gathering have been exploring and experimenting with systematized value extraction and the creation of new ways of profiting from this elusive "hidden value." A number of books on the topic have been written and more are on their way The books written to date focus almost exclusively on knowledge management or how to create new knowledge or new value This book, different from its predecessors, focuses on how to profit from the firm's knowledge The value extraction perspective discussed in detail in these pages is being shared by Gathering companies in other ways as well For example, companies interested in emulating successful xii 352 APPENDIX This Exhibit is intended to provide general guidelines Individuals involved in valuing technology should always be cognizant of existing exceptions and adjust accordingly The objective of the valuation should be made very clear and remain fixed throughout the valuation process Changing the objectives midstream will result in wrong assumptions A business can, however, elect to value two or three different objectives separately and use the information to choose the option that maximizes the economic profit It is recommended that the team of experts use the Technology Factor methodology as the initial method to calculate the contribution of the technology Exhibit A.14 outlines the different types of intellectual properties, their stages of development, and methods for valuation The shaded areas represent the best methodologies to determine the value of an intellectual property It is the responsibility of the facilitator to determine if a special case exists and adjust the valuation accordingly It is recommended that the team of experts use the Technology Factor methodology as the initial method to calculate the contribution of the technology SUMMARY AND CONCLUSIONS Summary It should be clear to the reader that valuation is not an exact science Valuation of intellectual properties requires an understanding of the general concepts involved in the development of the detailed methods described in this document Exhibit A.IS Asset Examples Tangible Assets Intangible • Working capital • Buildings • Land • Office equipment • Production machinery • Vehicles • Copyrights • Patents, proprietary know-how, and technology • Service marks • Trademarks • Computer software Assets Complementary Assets Intangible • Assembled workforce • Backlog (a source of future from sales that have already been closed, but not yet fulfilled) • Captive parts annuity (represents the continued purchase of replacement parts for capital equipment already sold to customers) • Culture and management practices • Customer lists • Distribution networks • Experience, insight, and understanding • Favorable contracts (i.e., distribution agreements, raw materials supplies) • Regulatory approvals 354 ExhibitA.16 APPENDIX Comprehensive List of Utility and Competitive Attributes Attribute Effect on Value Creation Usefulness to Dow Does the technology fit with current or future business strategy? Does the technology fit with vertical integration of the business? Is the intellectual property useful to other companies? How many competitors use the technology? Are the competitors willing to pay to get the patents or spend money to invent around it? It depends on the objective of valuation and type of business Rule of thumb for Dow: If the figure is approx $100 MM, then it might possibly destroy value because $$ could be used in other higher return projects with less risk Rule of thumb for others: Determine the size of the company and their ability to spend more for commercialization It depends on the technology Generally, it takes approx years to develop new technology or reinvent around existing intellectual property If it takes >2 years, the risk factor increases for implementing the technology It depends on the industry in which the intellectual property resides Will the technology have a useful life long enough to recover all the costs and the required return on capital? Will the competition reduce price, add service, or fight for market positioning? Will competitors oppose and prove patent invalid? Depends on the objective of the valuation (i.e., license, IV, or integration with Dow's business) and the resources available for the business Currently, resources are scarce and major engineering support to license a technology might be viewed as destroying value Are the intellectual properties totally free for the business to leverage its value? Is the technology tied to an exclusive agreement? Will the customer pay a higher price for the product? Will the technology increase market share? Do the same or similar products exist with different processes? Is there a different product and different process that could compete in the same market? How difficult is it to engineer around the intellectual asset? What is the blocking power of the patent? The broader the claim and the more novel an innovation is, the higher the probability to extract value Can infringement be detected by analysis of the product? Is the technology unique enough that the only process that could be used is covered by the patent? There is a tie between useful life of technology and useful life of the patent Usually, if a patent has >2 years before expiration, the business is negatively impacted Does the technology give leadership position for the company? Will the company's competitive position deteriorate if the technology is not protected? Does the intellectual property represent a pioneering/new chemistry? Is it an incremental improvement? How strong is the defensive position of the intellectual property? How high is the barrier to entry due to the complexity of the technology? Are there any product liability risks involved? Steady stream, cyclical, or seasonal? How much revenue is due to the technology? Products offered? Services rendered? Usefulness to others Capital required for implementation Time required for implementation of technology Useful life of the technology Anticipated competitive response Teaching value of patent Right to use the technology Differentiation Alternative technology Legal strength defensibility scope of the claims detection of infringement useful life of the patent Strategic positioning Pioneering/new chemistry Insurance value Complexity of technology Expected revenue Breakdown of revenue VALUING INTELLECTUAL Exhibit A.16 PROPERTIES 355 (Continued) Attribute Effect on Value Creation Customer willingness to pay for intellectual property Geographic area Impact of intellectual property on other products within the company or with customers Ongoing technology Is the customer willing and able to pay? Other costs of maintaining and supporting the intellectual property Company expectations Other derivative or tag-along sales Customer impact Competitor impact Stage of the technology Credential technology Royalty rates Is the interest in leveraging the technology regional or global? Will the technology render other intellectual properties and products obsolete? Is the research continuing, and are future developments expected? Is the research terminated and no additional support expected? Policing strategy, competitive monitoring, warrantees, tax maintenance of patent, security measures to protect trade secrets High, medium, or low Significant, acceptable, negligible Which customers are impacted by the technology? What market share they represent? Which competitors are impacted by the technology? What market share they represent? Growth/mature/decline Will the technology mark you as the leader in the industry? What are the traditional market royalty rates for similar technology in the industry? Is it high, medium, or low? The technology factor method is another tool that combines the market and discount cash flow concepts The final value represents the fair market value of the intellectual property The other methods of valuation are used in determining the different types of value, in addition to the fair market value The references provided at the bottom of Exhibits A.12 through A.14 should help the reader in developing the needed expertise Conclusion In conclusion, the Technology Factor offers The Dow Chemical Company the flexibility of using one tool to value intellectual properties in all areas of Chemicals and Plastics The "team of experts approach" expedites the valuation process by having all functions (e.g., business, marketing, R&D, manufacturing, legal counsel, economic evaluator) involved in the valuation It offers the benefits of: • Consensus • Objective evaluation • A system of checks and balances Exhibit A.l6 represents a comprehensive list of attributes that the appraisal team needs to check and build for the list of attributes required for the Utility and Competitive tables This table should help steer the team in the proper assignment of the Technology Factor 356 APPENDIX These attributes will not be classified under separate categories of "utility" and "competitive" headings In some cases, one issue could be placed under "utility attributes." In other cases, the same issue could be placed under "competitive attributes." The process should be flexible enough to allow the individuals most familiar with the technology to determine the appropriate placement of the relevant issues Author Index Ackoff, R L., 84 Andrews, K R., 84 Ansoff, Igor, Implanting Strategic Management, 329 Ansoff, Ho I 84 Aoki, Masahiko, 308, 317-318 Armstrong, Charles, 72 Arrow, K J., 309 Badaracco, Jo L 316 Barker, Joel, 206 Boston Consulting Group, 84 Burns, To, 88, 97 Carroll, Lewis, 30 Carter, Tom, 50 Champy, Jo, 85 Chandler, A Do 84, 96 Christensen, Clayton M., 154, 156 Clarke, Kim, 313 Collins, James, Built to Last, 44-45 Crespi,9 Cronin, Mary Jo, 327 Cyert, R., 88 Daniele, Joseph Jo: lAM for competitive advantage, 305-317 on the intellectual assets manager, 186-204 Dosi, Giovanni, 309-311 on technology process irreversibility, 313 Drucker, Po,85 Edvinsson, Leif, 5, 58, 64-65, 69-70,207,272, 279-283,317 Intellectual Capital-Finding the Hidden Roots of the Organization, 280 on IC reporting, 30 I on IC visualization, 218 Farb, Peter, 145, 156 Ferguson, c., 96 Florida, R., 96 Fox, Stephen P., 131, 155, 156 on IPM, 142-156 Galbraith, John Kenneth, 279 Germeraad, Paul, on ICM, 221-241 Gilder, Go, 96 Grindley, Peter Co, 97 on knowledge creation interfaces, 84-99 Gwinnel, Harry, on spin-off company ICM, 157-169 Hale, Kelly, on portfolio databases, 129-141 Halevi, So, 96 Hall, Brian Po,32, 62-63 on cultures and values management, 43-58 Hall, Martin L w., 57 on IC types, 43, 76-83 Hall, Ro, 310, 311 on know-how generation, 312 Hamel, Go, 85, 88, 96, 98 on specific knowledge, 307 Hammer, Mo, 85 Harrison, Suzanne: on IC measurement and monitoring, 267-278 on the IP portfolio, 119-128 Hayek, F A., 308, 318 Henderson, Bruce, 310 Kay, J., 84 Kenney, M., 96 Khoury, Sam, on IP valuation, 335-355 Kuhn, Thomas, 59, 61-62 The Structure of Scientific Revolutions, 60 Laento, Kari, on lAM, 242-252 Lawrence, A., 139 Lev, Baruch, 65, 74, 280 and the Center for Research in Measurement of Intangible Assets, 37 on knowledge measures in financial reports, 87 Little, Arthur Do, 339 Malone, Michael, 65, 272, 317 Intellectual Capital-Finding the Hidden Roots of the Organization, 280 Manfroy, Willy, on spin-off company ICM, 157-169 March, J., 88 Marglin, Stephan, 308 Maslow, Abraham, 236 Mintzberg, Ho, 85, 88, 310 Morrison, Lori, on lAM, 221-241 Jajko, Pamela, 319-327 James, Ro Mo, 85 Jensen, Mo c., 308-309 Nardi, Bonnie, 326 Nelson, Richard R., 88, 310, 315 Nichols, Margaret To, 324 Nonaka, Ikujiro, 88, 94, 98, 307 on knowledge generation, 312 Norton, David, 273 Kaplan, Robert, 273 Karrass, Chester L., 236 O'Day, Vicki, 326 O'Reilly, c., 85 Imai, K., 88, 94, 98 Itami, Hiroyuki, 310 357 AUTHOR INDEX 358 O'Shaughnessy, James P., 140-141, 155, 156 on knowledge company valuation, 284-297 Parr, Russell L., 155, 156, 351 Perez, C., 313 Peters, T J., 85, 96 Petrash, Gordon, 64 on lAM, 205-220 Pettigrew, A M., 85 Polyani, M., 308 Por, George, 22-23 Poras, Jerry, Built to Last, 44-45 Porter, Michael E., 84, 96, 289,290 Competitive Advantage, 41 Prahalad, C K., 85, 88, 96, 98 on specific knowledge, 307 Prime, Eugenie, 319-327 Quinn, Jo B., 85, 88, 96 Rappaport, A., 96 Reich, R., 88, 97 Rennie, John, 327 Riggs, Ho, 88, 98 Risling, Anders, 20 Rivette, Kevin, on the IP portfolio, 119-128 Rosenberg, N., 310-311 Roussel, Philip, Third Generation R&D: Managing the Link to Corporate Strategy, 228 Saint-Onge, Hubert, 63-64, 70-72,207 knowledge capital definition, 4-5 three capitals, measurement of,50 three capitals paradigm, 44-45 Saxenian, A., 96 Schafer, Susanne, 319-320 Senge, P., 85, 88 Simon, H., 85 Smith, Gordon V., 351 Soete, L., 313 Stalker, Go Mo, 88, 97 Stewart, Thomas A., 4, 5, 64, 76, 134 Intellectual Capital, the New Wealth of Organizations, "Your Company's Most Valuable Asset: Intellectual Capital," 225 Sullivan, Patrick H., 64, 68-69,73, 131, 155, 156, 204 definitions and concepts of ICM,19-42 on the future ofIC, 328-334 on intellectual assets value extraction, 173-185 on ICM, 3-18 ICM Extraction Model of, 77 on IC reporting, 298-304 on IP extraction, 103-118 on knowledge company valuation, 284-297 on knowledge creation interfaces, 84-99 on paradigms for ICM, 59-75 and patent mapping, 161 on value extraction, 253-264 Sveiby, Karl Eric, 20, 63, 69-70,273,307 Takeuchi, H., 88, 94, 98, 307 Teece, David J., 20, 62, 68-69, 85,88,96-98,323 on learning domain, 311 on process knowledge, 311-312 on tacit knowledge costs, 309 Tirole, J., 96 Tobin, John, 206 Tonna, Benjamin, 62, 71, 72 Treacy, 289 Utterbach, James Mo, 154, 156 Valauskas, Ed, 326 Walker, Trent, on IC measuring and monitoring, 267-278 Warshofsky, Fred, 119 Waterman, R H., 85 Westberg, Paul Bo, on paradigms for ICM, 59-75 Wiersema, 289 Winter, Sidney G., 88, 310, 315 Woodward, J., 88 Subject Index Accounting methods, and IC quantification, 142, 143 Acquisitions, 169 and IA valuation, 284-297 and specific knowledge value for, 316 targets of, identifying, 125-126 Administrative process, as intellectual assets, 179 Advertising, 145 Aerospace and defense contractors, intellectual assets use, 130-131 Alliances, 110 See also Strategic alliances American Society of Appraisers, 336 Aptitudes, 314 Aristotle, on values, 45 Assets, 353 See also lntellectual assets AT&T, 117 Avery Dennison, 73, 221-241 Awards, for inventors, 147 Balanced Scorecard, 272-273, 275 Base technologies, 233, 247 Benchmarking lAM process, 218,225 Black/Douglas era, 105 Black-Sholes formula for security options valuation, 296 Blocking, patents for, 181,210 Book value, 280 Brainpower (Stewart), 4, 64 Brand equity, 68 Brand-name identity, 222 Brand names, goodwill value of,287-288 Built to Last (Collins and Poras),44-45 Business a\1iances, 27 See also Strategic a\1iances Business assets, see Complementary business assets Business Decision System (SmartPatent), 121 Business description, 255-256 Business environment, See also Context Business purpose, of patents, 136-137 Business strategy, 127,254 See also Strategic planning competitive tradition, 84 for lAM, 198-199,210, 216-217 andIC~,289-290,301 IC role in, 108, 262 and out-licensing patents, 155 patent portfolio databases in development of, 139 patent process, links to, 134, 136,148-149 R&D integration with, 145 scenario planning for, 228-230 and specific knowledge, 316 Canon, 117 Capital: cost of, 301 types of, 4-5, 77-80 Capitalization, 282-283 Capital markets, IC reporting for, 298, 303-304 Cash flow, 275-278, 338-339, 341-343 Center for Research in ~easurement of Intangible Assets, 37, 300 Central coordination, 322-327 Chaos management, 96 Chaos theory, 329-330 Cluster and bracket analysis, 123-124 Coca-Cola: legal protection of formula, 26 market value of, 280 Codified knowledge, 20 See also Intellectual capital (IC) Collective intelligence, 22-23 Commercialization: complementary business assets for, 24-25 decision to pursue, 25-28, 115 direct, 110-111 of innovation, 87 and knowledge creation, 86 qualitative value measures of, 180-181 and specific complementary assets, 27 of technology, 62 value extraction analysis for, 260 Commercial transactions, 288 Communication, see also IC reporting for functional integration, 97 and innovation, 96 across management interfaces, 94, 95 organizational barriers to, 80 Community visibility, 68 Companies, types of, II See also Knowledge companies Compaq Computer, 116 Competence strategy, 96 Competition: analysis of, 195-198, 202 and patents, 110, 145 Competitive Advantage (Porter), 41 Competitive advantage, 27, 41-42,86 assessment of, lIS 360 Competitive advantage (Continued): and complementary business assets, 116-117 core competencies and, 88 and information sharing, 325 IP and, 105-106 knowledge gaps and, 312-313 matrix map for, 228 and organizational characteristics, 93 and organizational learning, 97 specific knowledge and, 306,307,315-316 sustainable, 289-290 and technology, 87, 248 for technology valuation, 338-339 Competitive assessment, 210, 258-259,261 Competitive attributes, for technology valuation, 343,345,354-355 Competitive strategy, 84 See also Business strategy Competitive technology, 137-138 Competitors, 125, 153-154 Complementary business assets, 24-25, 68, 143 and commercialization innovation,88 competitive advantage of, 116-117 generic, 24 and IA valuation, 292-293 specific, 24-25 Computer software: for information management, 321-325 for lAM, 199-200, 203 for patent portfolio analysis, 120-121 standard workstations for lAM, 214 Conference Board, 273 Context, business, 8, 28, 254-257 external dimensions of, 28-29,256 internal dimensions of, 28, 256-257 Copyrights, 5, 23, 176 See also Intellectual property (IP) management strategy for, 198-199 Core competencies, 158 building, 98 commercialization of, 96 SUBJECT INDEX and competitive advantage, 315-316 discontinuous innovations and, 154-155 and patents, 156 process knowledge of, 311-312 product links to, 136 and strategic movement, 159 and technology engine process, 162-163 Corporate culture, 8-9 alignment of, 44-45 changing, 208 cultural capital, 78 development stages of, 47-48 and innovation, 97 of interface groups, 89 knowledge creation and, 90-91 management of, 53-54 three capitals of, 44-45 values, human and economic,and,46 Corporate decision model, 231 Corporate hierarchy of needs, 236 Corporate librarian, 326-327 Corporate values, 53 See also Corporate culture Corporate virtues, 53 See also Corporate culture Cost(s), 180 of central coordination, 324 of knowledge generation, 313-314 Cost leadership, 289 Cost methods of valuation, 185 Creativity, 91, 96, 154-155 Cross-licensing, 189, 196 See also Licensing Cultural capital, 78 Current process, evaluation of, 208 Customer capital, 5, 44, 179, 207 definition of, 68, 78 measurement of, 50 Customer databases, 222, 282 Customer focus, 272 Customer intimacy, 289 Decision making, 33, 38 Defense contractors, intellectual assets use, 130-131 Design freedom, patent protection for, 110, Ill, 181, 189 Design intellectual assets, 176 Design learning, 306 See also Specific knowledge Dials, 275-276 Direction, of firm, 28 See also Business strategy; Strategic planning; Strategic vision Discontinuous change, 154-155 Disruptive technology, 154-155 patent valuation and, 295-296 Document analysis, 49, 54-55 Dolphin, 282 Donations of technology, 213-214 Dow Chemical Company, 205-206 lAM at, 205-220 IC measurement at, 270-271 IP valuation at, 335-355 patent expenses of, 107 patent tree of, 126 Tech Factor Method, 210 and value extraction, 73 Dynamic networking, 143 Eastman Chemical Company, 73, 157-169 Economic capital, 80 Economic enterprise, early, 60-61 Economic paradigm, 9-11 and social paradigm, relationship of, 61-{)2, 74 Economic value: and human values, 46 measuring, 180-185 Education activities, measurement of, 275 Emergence approach, 88 Emerging technologies 234, 247 Employees, see also Human capital and central coordination, 325-326 collective values of, 47-48 decision making of, 109 IC reporting of, 303 ke~292-293,296,297 knowledge of, 174 See also Intellectual assets (IA); Know-how and values deployment, 56 Enterprise hierarchy metrics, 236,239 SUBJECT INDEX Ethical integrity, values for, 52-53 Excess technology, 250 Fair market value of IP, 339 Financial capital, 43, 80, 230 Financial focus, 69, 272 Financial reports, see also IC reporting on intangible assets, 300 knowledge measures in, 87 Financial success, and lCM, 206,275-278 Flows, 181 Focus values, 47 Functional integration, 97 Funnel map, 230, 232-233 Future, of firms and ICM, 35 See also Business strategy; Strategic planning; Strategic vision Future earnings potential, and ICM,280 Futurization, 283 Going concern value, 286-287,290 Goodwill, 287-289, 290 Group audit analysis, 49-50, 55 Group values, focus stages of, 51-52 Hewlett-Packard, 65 IP protection processes at, 145 invention evaluation process at, 150-151 inventor incentive programs at, 147-148 outside counsel use, 152-153 patent coordination process of, 149-150 patent criteria, 148 patent portfolio management at, 153-154 Hubert Saint-Onge model, 66, 70-71 Human behavior: determinants of, 91 and organizational management, 84-85 and values, 46-47 Human capabilities, into structural capital, 282 Human capital, 5-6, 44, 143 See also Employees categorization of, 315 codifying knowledge of, for creating value, 22-23 361 definition of, 67, 78, 207 going-concern value of, 292-293 during Industrial Revolution, 60-61 versus intellectual assets, 21 and knowledge creation, management of, 261, 314-315 measurement of, 50, 262, 273 and profit generation, 65, 301 specific knowledge of, 314-315 on the star map, 230 valuation of, 305-306 and value creation, 20 Human development, values map and, 47-48 Human focus, 272 Human relationships, 44, 46 Human resources phase of lAM, 89-90 lA, see Intellectual assets (IA) lAM, see Intellectual asset management mM, 116 lC, see Intellectual capital (IC) IC-index, 281 ICM, see Intellectual capital management (ICM) ICM Extraction Model (Sullivan), 77 ICM Gathering, 5, 64, 73, 92, 225,279 growth of, 332 on IC reporting, 299 ICM Group LLC, 120, 122 ICM Model (Sullivan), 66, 68-{)9 Ideals, 45 Image, 68, 78, III Implanting Strategic Management (Ansoff), 329 Income method of valuation, 185,338 Income stream, on outlicensed patents, 294-295 Indexing of information, 323-324 Individual profile analysis, 49 Industrial activity, 144-145 Industrial knowledge, types of, 21 See also Know-how; Knowledge Industrial Revolution, 60-61 Industry consolidation, 285 Information management, 319-327 Innovation(s), 144 See also Value creation assessment of, 113-114, 164 as business strategy, 87 commercialization of, 26, 87,96 compensation for, 249 and complementary assets, 88 disclosure of, timely, 147, 151 discontinuous, 154-155 Eastman Chemical's process, 158 and intellectual assets, 23 management process for, 259-260 monitoring, 112 and organization, 96-97 as value source, 330, 331 and vision, 29 Innovation management, 7, 97-98 See also Intellectual asset management (lAM) Intangible assets, 117, 286-292 See also Intellectual capital (IC) reporting on, 300 Intellectual asset management (lAM), 10, 12, 173, 191-192,300 at Avery Dennison, 221-241 background of, 187-188 benchmarking of, 218 context of, 188 current position assessment, 208,226,228 databases for, 199-200, 203 implementation steps for, 201-203 IPM and, 202 versus knowledge creation management, 84-98 at Neste Oy, 242-252 organizational structure for, 200-201 patent enforcement, 195-198 processes of, 89-90, 212-214,260-261 rational approach to, 87-88 scenario planning and, 228-230 should process development, 208 stock/flow distinctions of, 93 strategy for, 198-199, 202, 203 SUBJECT INDEX 362 Intellectual asset management model,209-214 Intellectual asset managers, 186-204,211,212, 332-333 databases, development and use of, 192-193, 199-200 role of, 191-192 Intellectual assets (IA), 5-6, 23,89-90,153,174-175, 188-189,207 auditing, 213, 244-245 centralized coordination of, 322 classification of, 213 commercializable, 175-176, 186 creating, 22-23 databases for, 193 definition of, 68, 222, 320 design, 176 evaI uation of, 159 future of, 331-333 versus human capital, 21 indexing, 323-324 IP as, 175-176 leveragability of, 39, 174-175 life cycle of, 190-191, 193-201 managing, 87 See also Intellectual asset management (lAM) measures for, 215-218 nonprotected, 260 offensive use of, 257 operations, 176 star maps and, 229 -230 strategic, 179 and structural capital, 176-179, 186 technical, 176 transfer of, 195 valuation of, 33, 87, 223, 260,290-292 Intellectual Asset Tech Center, 211-212 Intellectual capital (IC), 3, 4, 20-21,207 assessment of, 236-238 benchmark of, 36 and business strategy alignment, 301 communicating value of, 19, 262-263 See also IC reporting current versus future dimension, 103-104,281 defining roles of, 37-39, 43, 76,257-258 extraction of, 77 and financial capital, 43 future of, 328-334 for income generation, 301 measuring, 37-39, 43-45, 178-180,267-278 monitoring, 267-278 perspective and, 72-73 premium pricing of, 286-289 and profit generation, 65, 270,275-278 purchase price, relation to, 285 relationship among, 268 reporting on, 36-37,262, 298-304 See also IC reporting strategic positioning use of, 35-37,257 three generations of, 283 understanding, utilization assessment, 300 valuation of, 35, 224-225 visualization of, 218-219 Intellectual Capital, the New Wealth of Organization (Stewart), 4, 64 Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower (Edvinsson and Malone), 65, 74 Intellectual capital development, 280-283 model for, 80-81 Intellectual Capital-Finding the Hidden Roots of the Organization (Edvinsson and Malone), 280 Intellectual capital framework, 40 Intellectual capital management (ICM), 3, 10, 19-20,91-92 See also Intellectual asset management (lAM); Intellectual property management (IPM); Knowledge creation approaches to, 89-93 capability-building process, 263 context of, 7-8, 254-257 contributors to, 62-65 designing system for, 259-262 foundation for, 253-254 future of, 83, 331 interfaces of, 94, 95 measures for, 215-218 and profits, 65-66 and R&D management, 221-222 at spin-off companies, 157-169 two paradigms of, 8-11 Intellectual capital managers, 286-297,303 Intellectual capital measurement, 51-52 Intellectual capital reporting, 298-304 concerns of, 298-299 for external audiences, 36-37,303-304 future of, 333 government interest in, 299, 300 for internal audiences, 302-303 Intellectual capital value added,41 Intellectual property (IP), 5-6, 23,87-90,143 audit of, 144 and business strategy, 108 databases for, 192-193 future of, 331-332 investment decisions for, 231 obsolescence of, 136 valuation of, 115,335-355 Intellectual property law, 103 Intellectual property management (IPM), 10, 12, 103-118,173,191 business strategy links to, 134-136 elements of, 202-203 patent mapping, 161-162 patent portfolio management, 153-154 process of, 159-169 process teams for, 159-161 strategic decision making in, 108-111, 115-116 two views of, 104-105 Intellectual property management system, 111-116 Intellectual property protection, 144-148 Intellectual property rights, 332 Intellectual property strategy, 108-111 Intellectual property valuation, 337-338,348-352 Interface management, 89 Internetlintranets and information management, 321-322 Intraorganizational capabilities, 143 SUBJECT INDEX Invention(s): disclosure of, see Invention disclosures evaluation of, 150-151 foreign patents for, 152 simultaneous, 144-145 Invention disclosures, 139 funnel maps for, 232-233 review of, 148, 150 Inventors: employment analysis of, 124 incentives for, 146-148, 194 IP~, role in, 160 patent criteria for, 148 and strategic direction, 129-130 IP, see Intellectual property (IP) IP~, see Intellectual property management (IP~) 363 Joint ventures, 27, 108 capability development for, 260 development process, 166-169 partners, identifying, 125-126 types of, 168-169 Joint ventures and alliances (JVA) licensing, 159 Knowledge companies, 3, 4, 20 context of, 7-8, 93-94, 254-257 emergence of, 62 health of, 236, 238, 240, 241 interest in IC measures, 298 management models for, 61 models of, 66 67 paradigm shift caused by, 74 standard business model use, 40 stock price of, 178 See also ~arket value strategic intent of, 110 types of, 144 values of, 7-8 valuation of, 87, 284-297 Knowledge creation, 49 and commercialization, 86 and creativity, 91 emergence process of, 90 management of, 84-98 and organizational characteristics, 93 organizational learning and, 93 Knowledge creation interface, 92-93 Knowledge flows, 316 Knowledge gaps, 312-314 Knowledge management, 52-53,86-88 Knowledge tree, 210, 281 Key technologies, 233, 247 Know-how, 306, 310, 311 See also Intellectual capital (IC); Knowledge; Specific knowledge documentation of, 215 management of, 214 tacit, 286-287 visibility of, 214-215 Knowledge, 173-174 See also Intellectual capital (IC); Know-how and complementary business assets, 292, 293 cross-correlation of, 143 and culture, general, 308-310, 314 information management of, 323 and profitability, 275 renewing and managing, see Hubert Saint-Onge ~odel specific, 305-317 tacit, 286-287 types of, 308-310 valuation of, 87,93 Knowledge capital, 4-5, 44 Leadership, for IC~, 51, 281-282 Learning, and knowledge management, 88 Legal protection, 65, 176, 177 and commercialization, 26 expansion of in the future, 332 IP law, 103 patent portfolio database use of,133 strength of, 116-117 of technology, 24-25 Legal representative: IP~, role in, 160, 194 technology valuation, role in, 341 Licensing, 108, 165-166 See also Out-licensing capability development for, 260 cluster and bracket analysis for, 123 at Eastman Chemical Company, 158 joint ventures and alliances, 159 management of, 198 patent portfolio database use, 133 revenue from, 196 Litigation avoidance, 110, III, 181,261,301-302 in the future, 334 Lucas, Carl, 217 ~anagement, 10,51 of corporate culture, 53-54 lAM, support of, 202 as learning and knowledge creation, 87 methods and analyses, 179 new policies of, 74 object of, 85 paradigms for, 60 61 patent portfolio database use, 133 ~&A (mergers and acquisitions), 284, 285, 316 See also Acquisitions ~anufacturing: capability of, 145 management of, 88 and patents, 110 ~arket access, 27 and patents, 110 ~arketing, 88 niche, 289 patent licenses for, 146 ~arket intelligence, 137-138 ~arket method of valuation, 185,338 ~arket needs, patents for, 153-154 ~arket performance, and knowledge management, 88 ~arket position, and technology engine process, 164 ~arket presence, and IC framework, 40 ~arket value, 285 versus book value, 280 of knowledge companies, 38-39 ~atrix map, 228, 235-236 ~easurement, 49-50, 270-274 with Skandia Navigator, 281 ~easures: if IC, 43-45, 267-278 for IC~, 215-218 for IC reporting, 299 for IC valuation, 226 of processes, 216, 217 qualitative versus quantitative, 269-270 ~ergers, 284, 285,316 SUBJECT INDEX 364 Microsoft, market value of, 3, 280 Missionary phase, of IC development, 281 Mission statements, 31 Monopolies, and patents, 105 National Cooperative Research Act (1984), 106 Negotiation, portfolio use in, III Neste Oy: lAM at, 242-252 patent stock measurements at, 271 patent value model, 233-235 Net present value (NPV), 9, 28 and IA valuation, 210, 290-291 and the Technology Factor method, 338-340, 343 Netscape,4 New Economics, 3, 330-331 Next-generation products, 223 Niche marketing, 289 OECD Report, 273-274 Operational excellence, 289 Operational methods and procedures, 179 Operations intellectual assets, 176 Options valuation, 291 Organizational approach, 88 Organizational capital, 79, 207 Organizational learning, 97, 98 Organizational management, 84-85 and market strategy, 89 process approach to, 90-91 and strategic management alignment, 85-86 Out-licensing, 124, 158, 198, 213 See also Licensing income stream of, 294-295 and IP valuation, 336 Pacing technologies, 234, 247 Paradigms, 60 and change, 61-62 Patents, 5, 23,104-105,176 aging of, 124 analysis of, for new business areas, 125 applications for, 147 assessment of, 139, 193-195,213,249 business strategy links, 148-149 and business units, alignment of, 209 classification of, 114, 122, 134,209,213 competition, preemption of, 151, 181,222,290 complementary protection of, 1I0, Ill, 123, 181 cost of, 106-107, 114, 139, 206 court for, 186 criteria for, 148 for current markets, 109 decision to pursue, 112-114, 166 defense and government agency use of, 130-131 economic value of, 293 enforcement of, 195-198 in foreign countries, 152, 160 for future use, 109, 145, 151,153,155,295 generation of, 193-195 history of, 105-106 importance, ranking of, 124-125, 180-181 infringement on, 1I5, 131, 155, 181, 196-197,261 innovation management process, 259-260 invention disclosure reviews for, 148 versus legal protection, 26 licensing of, 155, 108 See also Licensing; Outlicensing for litigation avoidance, 181 maintenance fees, 124, 127, 213,250 management strategy for, 198-199 market strategic, 291, 294 offensive use of, 155, 222 outside counsel for, 152-153 policies for, 259 process of, 224-225 and product data integration, 122-123 and product differentiation, 289 qualitative value measures of,180-181 quantitative value measures of,181-185 revenues from, 120 right-to-use searches, 146, 189 strategic uses of, II 0-1I1 survey form for, 151-152 vanity, 213 Patent coordination process, 149-153 offensive use of patents, 155,222 Patent gaps, 126, 127 Patent infringement, 1I5, 131, 155,181,196-197 management of, 261 Patent map, 161-162,232 Patent portfolios: analysis of, 120-127 as business assets, 104-105 in business negotiations, 107-108 and business strategy, 109-1I1 as competitive tools, 1I9-128 expenses of, 106-107 income from, 107 management of, 114-115, 119-120,153-154,202, 223-224,258-260 as protection, 104-105 quality of, 107 status indicators of, 217-218 strategic use of, 110-111 valuation of, 294-296 Patent portfolio databases, 129-140,258 applications-based development, 132-133 asset to business strategy links, 134, 136, 139 business purpose identification, 136-137 consultants for development of, 134 flowchart of IPM process, 134 for invention disclosure, 139 linkages of, 260 market intelligence in, 137-138 for patent reviews, 139 U.S Patent and Trademark Office classifications use, 134 users of, 133 Patent portfolio management (PPM), 1I4-1I5, 1I9120,153-154,202,223- 224,258-26O.Seea~o Patent portfolio databases Patent trees, 126-127, 161-162 for competitive assessment, 210 Patent value model, 233-235 performance, and knowledge management, 87 SUBJECT INDEX Predictive statements, in IC reporting, 302 Premium pricing, 286-289 Price Waterhouse, 65 Process capital, 68, 80 Process companies, II Process focus, 272 Process knowledge, 311-312 Product(s): assessment for patentability, 223 differentiation of, 289 of disruptive technologies, 155 distribution of, 145 knowledge-embedded, 65 life cycles of, 145-146 patent protection mapping of, 122-123 Product companies, II Product development, 154, 223,312-313 Product leadership, 289 See also Competitive advantage Product versus service orientation,65 Profits: and commercialization, 27 and IC framework, 40 and knowledge, 275 Qualitative measures of value, 180-181 Quantitative measures of value, 181-182 Recognition, for inventions, 147 Relationship capital, 78 Renewal & development, 69, 272,281 Reputation, 78 See also Customer capital and knowledge company value, 288-289 Research and development (R&D): and complementary business assets, 145 corporate strategy links to, 223 direction of, 127 economic model, role in, 145-146 emerging technology, focus on, 155 foreign, 152 funnel map tracking of, 230, 232-233 and IA valuation, 296 365 and IPM, 160,221-222 managing, 88 technology engine process use, 164 star maps and, 229-230 valuation of, 87 Revenue generation, tools for, 119-128 Reverse engineering, 313-314 Ride, Sally, 328 Right-to-use searches, 146, 189 Risk: evaluation of, 164 and joint ventures, 169 reduction of and intellectual reporting, 30 I Rockwell International, intellectual assets use, 130-131 Rockwell Semiconductor Systems, patent use of, 131-132 Romer, Paul, 330-331 Royalties, 107, 196, 198,301 Saint-Dnge Model, 66, 70-71 Securities and Exchange Commission (SEC): and intellectual assets, 3-4 and IC measurement, 36-37, 74 interest in IC reporting, 299, 300 Semiconductor masks, 23, 176 Senior executives, IC reporting for, 263, 302-303 Service companies, II ICM of, 39 value extraction of, 42 Services, 65, 206 Shareholders, 120-121,304 SIC codes, 122, 125-126 Skandia: IC, visualization of, 218-219 ICM at, 279-283 IC reporting at, 36, 301 IC measures of, 271 Skandia Navigator (Edvinsson),66,69-70, 272, 281 Skandia Value Scheme, 280 SmartPatent, 120, 121 Social paradigm, 8-9 and economic paradigm, relationship of, 61-62, 74 Spare technologies, 233-234, 247 Specific complementary assets, and commercialization, 27 Specific knowledge, 305-317 Spin-off businesses, 249-250 Spiritual capital, 78 Sponsorship of assets, 234-235 Stakeholder(s): capital, 28 See also Customer capital IC reporting for, 304 Standard business model, and knowledge companies, 40 Star map, 229-230 Stock(s), 181 measurements of, 271 price of, and IC reporting, 301 Strategic alliance, 27, 108, 283 capability development for, 260 development process, 166-169 licensing for, 159 Strategic business planners, use of patent portfolio databases, 133 Strategic management, and organizational management, 85-86, 89 Strategic patenting, 149 Strategic planning, 30-31, 89, 98, 230 See also Business strategy for growth, 285 and IA value extraction, 226-230 and IC reporting, 301 and patent valuation, 129-130 Strategic vision, 29-32, 40, 253-254 development of, example, 56 and lAM, 158-159 and IP strategy, 108-111 and joint ventures and alliances, 168-169 and value and values relationship, 29 Structural capital, 5, 6, 23-24, 44 complementary business assets, 24-25 definition of, 68, 79-80 human capabilities as, 282 intellectual assets as, 176-179 measurement of, 50 Structure of Scientific Revolutions The (Kuhn), 60 Systems thinking, 82-83 366 Tacit knowledge, 20 Tactical blocking, 110-111 Teams, for lAM, 46, 210-211 Tech Factor Method, 210 Technical intellectual assets, 176 Technology, 246 assessment for patentability, 223 attributes of, 339 auditing, 243, 247-251 classification of, 246-247 commercial exploitation of, 247 competitive, 137-138,248 development, evolutionary approach, 88 disruptive, 154-155,295 donations of, 213-214 emerging, 155 for information management, 321-322 interrelationships of, 163-164 key, 233 ownership status of, 244, 247 protecting, 24-25 See also Patents redeployment of, 120 as structural capital, 282 trends in, 153-154 valuation of, 252, 337, 342 vale chain categorizations of, 163 Technology assets, 251 Technology companies, see also Knowledge companies ICM at, 39 intangible assets of, 117 IPM at, 103 value extraction at, 42 Technology engine process, 162-165 Technology Factor (TF) Method, 336-348 Technology gaps, 153-154, 197 Technology transfer, 195 model for, 249-250 and patents, 110 Technology trees, 161-162 Third Generation R&D: Managing the Link to Corporate Strategy (Roussel), 228 SUBJECT INDEX 3M,4 Trademarks, 5, 23, 176 goodwill value of, 287-288 management strategy for, 198-199 Trade names, goodwill value of, 287-288 Trade secrets, 5, 23, 150, 176, 194 and IC reporting, 302 U.S Court of Appeals for the Federal District, 186 U.S Department of Justice (001), 105 U.S government interest in IC reporting, 299, 300 U.S Patent Class codes, 122, 125-126 U.S Patent and Trademark Office (PTO) classifications, 134 University of Santa Clara, human behavior studies at, 47 Utility attributes, for technology valuation, 9, 343-344,354-355 Valuation process, 210, 223 mantras for, 29 team for Technology Factor Method, 340-342 Value, 9-11, 28, 32-33 communicating to firm, 262-263 See also IC reporting conversions of, 25 current, 103-104 drivers of, 41 future of, 103-104,295 going concern, 286-287, 290 goodwill, 287-290 hidden, 284-285 and human capital, 22-23 measures of, 179-185,216, 217 money terms for, 183-185 reputational, 288-289 sources of, 25 of specific complementary business assets, 24 types of, 42 and values and vision relationship, 29 Value chain, 41, 90, 163, 189-190 Value creation, 9-10, 20, 72, 89 See also Skandia Navigator (Edvinsson) model of, 207 Value extraction, 3, 9-13, 20, 42,64,77 current versus future dimension of, 103-104 from IC, 35 from IP versus intellectual assets, 173 midterm, 107-108 as a perspective, 72-73 and portfolios, 104-105 process of, 89, 173-185 roles of, 268 short-term, 106-107 strategic planning links to, 12-13, 226-230 tactical, 12 Values, 7-8, 29, 32, 45-46 alignment of, 57 capital, influences on, 82 corporate, 53 and cultural alignment, 45 deployment of, 52-57 development of, 51 and ethical integrity, 52-53 financial measurement of, 45 focus, 47, 51 gaps in stages of, 51-52 and human behavior, 46-47 human or personal, 45-46 identification of, 54-57 and leadership style, 51 measurement of, 43-44, 49 52 and systems thinking, 82-83 and value and vision relationship, 29 vision, 47 Values Map (Hall-Tonna), 47-48,66,71 Values string, 45 Values tracks, 53 Vision, see Strategic vision Wallman, Steven, 299, 300 Walpole, Robert, 319 Worldview, and values focus, 51 Xerox: lAM at, 201 IA transfer at, 195 specific knowledge concept, 307 value extraction at, 73 .. .Profiting from Intellectual Capital Extracting Value from Innovation Patrick H Sullivan Joseph J Daniele, Ph.D., is Corporate Manager of Intellectual Properties and... Part III Intellectual Asset Management 13 Extracting Value from Intellectual Assets Patrick H Sullivan ICM Group, LLC 14 The Intellectual Asset Manager Joseph J Daniele Xerox Corporation 15 Intellectual. .. Part III Intellectual Assets Management Chapter 13 Extracting Value from Intellectual Assets Patrick Sullivan discusses intellectual assets in detail; describes the relationship between intellectual