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The Intellectual Property (Asset) Management Stage

Patents and trade secrets constitute Dow's primary form of IP. When it first started with the IAM initiative, Dow owned a patent portfolio of 29,000 patents. The genius of Dow's management of its primary form of IP lies in assigning responsibility for sustaining and leveraging different groups of patents to the business that can and does benefit from them most. In turn, this enabled every business to focus on its core technological competencies and develop new related ones to strengthen its competitive advantage and augment its patent portfolio. At the same time, over 100 IAM teams scattered across Dow function to leverage the patented and other technology both inside and outside Dow.

Structure - IAM Teams and the Tech Center. During 1992, the Inventions Management Group worked with the business-aligned Patent Task Force to assign primary ownership of each property in the IP portfolio to one of the businesses. Each business unit was required to formulate its patent strategy as part of its business strategy and devise investment plans using the valuation and auditing tools. Consequently, each business unit was required to absorb its respective patents' costs. In 1993, the IAM teams replaced the Patent Task Force. IAM teams are cross-functional teams formed to manage a part of the portfolio according to the investment plan, with over 500 personnel. The teams are comprised of frontline functional managers and key scientists from within the businesses, who meet two to three times a year to review the portfolio and devise strategies for its management.

To support the network of intellectual asset managers, the Global Intellectual Asset Tech Cen­ter was formed in 1995. The Center, managed by Sharon O'riel, oversees matters that include maintaining a Web site and communication network, collecting and disseminating best practices, maintaining the patent disclosure and agreements databases, and providing support to both knowledge and intellectual asset managers.

Culture - Patent Talk Equals Patent Friendly. The IP audit and the identification of the key patents for every business immensely affected the IPM culture at Dow. The exercise of identifying such key patents and determining their value to business promoted debate among R&D, manufac­turing, business development, and IA managers, wherein solid understanding and appreciation of the value of patents to business evolved.

Leveraging IP Internally and Externally - A Patent Investment Plan. The investment plan addresses the business goals of competitive positioning and commercialization. Under the first use, the business unit addresses how the patent(s) can be used for competitive positioning and enhancing its core competitive advantage with the end goal of strengthening its technological capability. In this light, joint ventures and outsourcing agreements are considered.

The second use relates to commercializing the patent through licensing or technology transfer transactions offered to outside parties in cases in which that is not competitively harmful. IAM teams are involved at early stages in negotiations of joint ventures and R&D collaborations. IAM teams initiate negotiations in cases in which they decide that Dow needs to acquire a certain tech­nology or patent to augment its knowledge in a strategic area of business. The IAM teams are also on the lookout for opportunities to license out any of Dow's patents. It is reported that Dow's licensing efforts have resulted in generating an additional $61 million annually.

CONCLUSIONS ON DOW

Dow's interest in patent and technology licensing goes beyond its own boundaries, assisting in creating a secondary market for patents and other forms of IP. Dow was one of the very early par­ticipants in online Internet technology exchanges via significant activity with companies like and PLX systems. Near commented that the success in creating a considerable sec­ondary market for IP may open the door for trading in IC - maybe human capital. Near's work to find ways to measure the contribution of human capital to value creation and future performance may be a crucial step in getting closer to this futuristic vision: a vision that is typical of Dow, where shaping the future is part of what Dow does.

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