Strategic Approaches to Quantifying Intellectual Assets
Several articles in the February 1999 KMWorld investigate the problems associated with putting a value on a corporation’s intellectual assests. The rubric of intellectual assests is wide and varied. For example, despite extensive production and delivery infrastructures, Coca-Cola’s most vital asset is its intellectual asset—the recipe; WebTV’s was the hundreds of patents it had obtained for Internet delivery over the television.
Beyond human capital (employees’ skills and ideas) and structural capital (employees’ products such as systems and databases), patents are, perhaps, the most valuable intellectual asset a company has. Patents can be seen as intellectual capital because “they represent an innovation with legal value that can be quantified by being traded, bought, or swapped.” Several analytic tools have been created to aid corporations in assessing the value of inteleectual assets. Document management products have been key in the capture, quantification, and increase of intellectual assets. The authors elaborate that the company that manages this knowledge effectively will gain marketshare at the expense of thos that cannot.
With knowledge management posited as the path to intellectual property portfolios, the authors present three challenges to be met while transforming information to knowledge:
- Understand your knowledge assets.
- Protect and leverage your assests.
- Adapt to knowledge manangement.
Finally, the authors suggest a method for converting intellectual property into an asset. By selling intellectual property to a holding company which will license the property back to the inventor, a value and price are established which, in turn, enhance the company’s asset portfolio.