Today’s innovation and brand-driven companies are well aware of the importance of intellectual assets (“IAs”). Few CEOs would deny the fact that a significant portion of their company’s value is derived from intellectual property, especially patents. However, IAs represent a challenge for many corporate managers seeking to realize value in a world historically tied to “hard asset” financial measures. Not only do most operating managers lack experience in systematic management of intellectual assets, but also they lack the necessary tools — such as agreed-upon accounting methods and standardized financial reporting for such assets. Not to mention the fact that most companies also lack even the most basic information systems needed to manage how intellectual assets are created, managed, and exploited.

The challenge is made more daunting by the lack of objectivity in identifying, defining, and measuring R&D-generated, patent-related intellectual assets. Management struggles to find actionable directives that will drive bottom line value. With no clear benefit in the form of increased earnings or a higher market valuation in sight, the cost of assigning valuable (and expensive) managers to the task of “managing knowledge” becomes a dubious and unlikely priority. Not surprisingly, most businesses continue to operate within the status quo.

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