How Long Can Company’s Sustain Their Intangible Asset Advantage…?

Michael D.  Moberly   December 5, 2008

If we assume the authors of ‘The Economic Role of Intellectual Property’ (Noonan Haque, Greg Smith, Deloitte, London) are correct, which I essentially do, the key issues in a given industry today are, broadly speaking (a.) rapidity of R&D breakthroughs, (b.) rapid diffusion of knowledge, and (c.) abbreviated product lifecycles.

Strict reliance on patents (standing alone) however, as constituting a company’s primary means/strategy to achieve and sustain a competitive advantage in the global marketplace may, in reality, do quite the opposite, i.e., hand – shift the advantage to competitors because, among other things, lengthy patent processes can delay, even stymie, rollouts of new products in certain industry sectors.  I suspicion that a sizeable number of business decision makers presume (their) market – competitive advantages can be indeterminately protected today by conventional forms of intellectual property, i.e., patents especially.

I’m not suggesting the current patent process be overhauled necessarily or done away with as some advocate.  While I hold my own thoughts on this subject, I do recognize that matters related to intellectual property are global, complex, and multi-faceted, especially as innovativeness is no longer the exclusive province of a few, rather widely dispersed among an ever growing number of emerging economies that are increasingly intertwined with rapidly evolving economic powerhouses, i.e., China, India, Brazil, etc.

On the other hand, I am suggesting that other measures, perhaps secrecy for one, while recognizing it may present some new implementation, maintenance, and perception challenges for companies, can, quite possibly work well in some instances (in lieu, that is, of conventional IP) if properly coupled with (a.) effective stewardship, oversight, and management, (b.) realistic and monitorable policies, procedures, and practices, and (c.) product design excellence.

Admittedly, secrecy, in the eyes of some business decision makers, may appear a bit of a curious strategy in today’s ultra-connected global business environment where information, data, and knowledge routinely travel at warp speed.  The notion of sustaining a ‘business secret’ is perhaps, somewhat realistically, an increasingly challenging, if not unfeasible prospect for some decision makers, for all but a very minimum time frame.

While I am a consistent, albeit eyes wide open proponent of (trade) secrecy under certain circumstances, the constant ‘rotation’ (movement) of information, data, know how, and people in network – node fashion within business units and/or entire industries, has become so frequent and routine, that neither a company nor its decision makers should assume any ‘knowledge-based advantages’ that may have already accrued, can be sustained for any extended, but particularly, indeterminate period of time!

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