Intellectual property and intellectual capital

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This article focuses on the relationship between intellectual property
and intellectual capital. The broader concept of 'intellectual capital'
is a useful framework within which to analyse the relative merits
and drawbacks of reliance on proprietary rights over knowledge. Strategic
analysis of the costs, risks and benefits of various forms of proprietary
protection is vital in the context of rapid innovation in a 'knowledge
economy'. Maximising the value of the intellectual capital of the firm will
require: a considered assessment of the strengths and weaknesses of each
IP regime; combining reliance on the rules of intellectual property law with
other strategies; and re-evaluating the utility, function and expectations of
intellectual property protection in general. This article presents some
tentative conclusions concerning strategies to protect the intellectual
capital of the innovative firm. Its main themes are: (i) That intellectual
property will not be effective in protecting many aspects of intellectual
capital; (ii) That combining reliance on the rules of IP law with other
strategies will maximise the firm's control over intellectual capital; (iii)
That the real value of intellectual property rights may lie rather in their
transactional utility than in restricting competition-by-imitation; (iv) That
there may be advantages in investing in goodwill, rather than technological
innovation and ideas; and (v) That a firm should primarily focus its
intellectual capital strategies on maximising the value of the tacit
knowledge of its employees.
Original languageEnglish
Pages (from-to)10-26
Number of pages17
JournalIntellectual Property Forum
Issue number48
Publication statusPublished - 2002


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