Technology and Innovation, Vol. 19, pp. 481-492, 2017 ISSN 1949-8241 • E-ISSN 1949-825X Printed in the USA. All rights reserved. http://dx.doi.org/10.21300/19.2.2017.481 Copyright © 2017 National Academy of Inventors. www.technologyandinnovation.org

INTELLECTUAL PROPERTY AS A MANAGEMENT DISCIPLINE

Holger Ernst

WHU - Otto Beisheim School of Management, Vallendar, Germany

This paper illustrates the development of intellectual property (IP) as a management discipline over time. It starts by providing a brief historical overview of the role of IP in research and managerial practice. Changes that have caused the emergence of IP as a new discipline in management research and education are outlined subsequently. After that, the paper intro- duces a new framework to strategically manage IP within the broader context of technology management. The framework highlights the new and upcoming strategic roles and tasks of the “IP function” within firms. The paper concludes with a discussion of implications for the proficient management of IP in firms today and in the future, which stands in sharp contrast with how IP was valued and handled in many firms in the past.

Key words: Intellectual property; Patents; Management; Strategy; IP department

INTRODUCTION investments into research and development (R&D). Technology-based innovation has been a major Historically, the debate on the role of patents has driver of competitive advantage across multiple been dominated by scholars in the fields of law and industries (1-3). Due to its high strategic relevance, economics. The debate has been mainly focused on the effectiveness and usefulness of patents to spur the effective and efficient management of technolo- innovation and growth. Only very recently, with some gy-based innovation has become of vital importance notable exceptions (10-13), has the management of to many organizations (4,5). Klaus Brockhoff, in his patents and other forms of intellectual property (IP) contribution to this special issue, has outlined the received more attention in management research and emergence of technology and innovation manage- education (14-16). ment as a managerial discipline. As of today, the The objective of this paper is to illustrate the management of technology and innovation has development of IP as a management discipline. I become a core element in the field of management will start with a brief historical overview of the role education and has established itself as an important of IP in research and managerial practice. I would and fast-growing research discipline (6-9). like to point out at this stage that, within the scope Patents are by their nature very closely related to and limits of this paper, I cannot possibly do justice technology-based innovation. They are supposed to to all work published in this area. I will, therefore, legally protect the inventor from imitation. Hence, present only a limited view. I will then explain the patents are viewed as an important incentive for changes that have led to the emergence of IP as a new inventors and entrepreneurs to take risks and to make discipline in management research and education.

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Accepted: July 3, 2017. Address correspondence to Holger Ernst, Chaired Professor of Technology and Innovation Management, WHU – Otto Beisheim, School of Management, Burgplatz 2, 56179 Vallendar, Germany. Tel: +49 (261) 6509-241; Fax: +49 (261) 6509-249. E-Mail: [email protected]

481 482 ERNST

While doing so, I will place special emphasis on the Empirical research on the relationship between pat- roles and tasks of the “IP function” within firms, enting activity and performance at the firm level has which has changed substantially in recent years and shown, at best, a weak correlation between patenting will continue to change in the future. activity and subsequent performance, suggesting that the economic benefits of patenting are rather limited A BRIEF HISTORICAL OVERVIEW in most circumstances (23,24). Patents are a legal means to exclude third parties Second, considerable research has been devoted from using the claimed invention. Therefore, they to the role of patents in fostering economic growth are considered an important legal mechanism to and prosperity in industries or countries. Schmookler temporarily protect the innovator from fast and cheap (19), in his seminal work, established a strong cor- imitation. Many famous examples show that inven- relation between patenting and indicators of growth tors have successfully built their businesses based on and prosperity without, however, controlling for their patents (17). This reinforces the fundamental cause and effect in his analyses. Since then, we have idea and the intended positive outcome of the patent witnessed an ongoing debate on whether the patent system incentivizing and rewarding inventors who system fosters or prevents innovation activity and take risks and make investments in innovation (18). hence overall growth and economic development. In turn, it is assumed that this inventive activity cre- Research in this domain aims at making recommen- ates wealth and prosperity for the society (19). This is dations with regard to changing or even abandoning further enhanced by limiting the monopoly right of the patent system altogether. For example, the recent a patent to a certain time frame and the requirement emergence of so-called “patent trolls” or “patent to disclose the invention so that others can build on sharks” has fueled the discussion as to whether and improve the initial discovery. This spurs overall the existing patent system is beneficial or not (25). technological progress, competition, and economic Debates with regard to certain new and upcoming prosperity. inventions in the fields of software, biotechnology, Historically, there are two streams of literature business methods, internet of things, etc., have led to looking at fundamental propositions of the patent ongoing challenges for the patent systems. As a result, system: First, there has been an intensive debate the rules of the patent system have been changing among scholars, especially from the field of econom- to rebalance market powers arising from these new ics, on if and under what circumstances patents are developments. These changes in the patent system an effective instrument to secure the appropriability are not consistent across regions, which affects the of new technical knowledge (12,14,20). The degree possibility of obtaining and enforcing patent rights of appropriability depends on many factors, such globally. In sum, this stream of literature focuses on as the regulatory environment in a particular juris- the regulatory side of the patent system, examining dictional area, the speed of technological change, under which conditions the patent system either the complexity of a specific technology, product vs. enables or hinders innovation and growth. The process technology, industry characteristics (dis- outcome of this research affects the effectiveness of crete vs. complex), the level of competition, and the patents to appropriate the investments in innovation existence of other means of protection (12,18,21). as discussed above. A very often cited work by Levin et al. (22) found Historically, firms have always filed patents. Pat- that patents a) are an effective means of protection enting activity, e.g., in the U.S., was, on average, in specific, discrete industries such as pharmaceuti- stable for over more than 100 years (26). The main cals; b) are the preferred option to secure technical motive for filing patents was to protect the inven- knowledge compared to other means of legal protec- tion (12). Much of this activity was, to a large extent, tion for products rather than process; and c) are less inventor-driven, as inventors were motivated to see important to secure competitive advantage compared their inventions converted into patents. In Germany, to other managerial tactics, such as marketing and because of its inventor law from 1957, inventors are sales efforts, lead time, cost advantages, etc. (22). legally entitled to receive a financial reward if their INTELLECTUAL PROPERTY AS A MANAGEMENT DISCIPLINE 483 firms use the patented invention in products they sell of patents filed per year. The enforcement of patent on the market. This motivates inventors even more to rights through litigation occurred very rarely. Other push for patent applications (27). The focus of the pat- forms of IP such as trademarks did play as important ent department in this context was to administer all a role in many technology-based organizations. activities around the patent filings, the corresponding To sum up, the research focus has been historically documentation processes, and the reward system for on understanding if and under which circumstances inventors. The patent attorneys in the patent depart- patents constitute an effective mechanism to protect ment would focus on filing a legally strong patent or innovations from imitation and how the patent sys- serving as the liaisons with external patent attorneys tem should be ideally designed to foster innovation or agents in case the patent filing process had par- and growth in general. Historically, the patenting tially or fully been outsourced. Patent departments activity of firms has been stable and has focused on tended to react to the filings generated by inventors protecting inventions. The patenting activity used and were not systematically involved in the research to be more inventor- or number-driven without a and development work in earlier stages (27,28). Top strategic focus. The role of the patent department was management exposure was low because patents were rather reactive and more focused on administrating not considered to be an important element of a firm’s the patent filing process. Patents did not play a signif- strategy to achieve sustainable competitive advan- icant role in a firm’s strategy, and their contributions tage, and the contribution of patents to the firm’s as potential value drivers were neglected. Table 1 strategic and financial goals was mostly unclear or summarizes the historic approach towards patents in undefined. There was hardly any focus on linking pat- many organizations. Given that this approach towards enting behavior with the firm’s strategy or to focus on patents was exercised by many firms, it may not come patents that would generate more value for the firm. as a surprise that research has more or less failed to The focus was largely on patent numbers, and the establish a strong correlation between a firm’s pat- key metric used by top management was the number enting activity and value creation (29).

e : Historical Approach to IP in Organizations

Strategy No explicit patent strategy No link of patenting with corporate strategy Main motive: protection of inventions

Key performance Number of patents filed indicators

Accountability Weak

Top management None exposure

Governance Mostly part of legal

Focus Administration of patent filings, inventor remuneration, litigation (to some extent)

Orientation Reactive (mostly inventor-driven)

Organizational Low (low level of cross-functional involvement, strong internal department orientation) embeddedness

Skills Legal and technical

Methods/Tools Use of methods and tools to support the administration of the patent portfolio

Integration across Low (clear focus on patents) multiple IP regimes 484 ERNST

THE CHANGING IP LANDSCAPE been established that the value of patents is skewed. Patenting activity has significantly increased in Only a few patents are highly valuable, whereas the recent years. According to the World Intellectual vast majority of patents are either limited or of no Property Organization, approximately 2.7 million value at all (37,38). A growing stream of literature patent applications were filed globally in 2014. The has focused on identifying and validating indicators growth of patent applications has been, on average, that help to assess patent value (11,39-41). Firms have 6.5% per year over the last 10 years (30). This growth begun to switch their focus from quantity (number does not only come from well-established regions of patents filed) to quality (value of patents) in their such as the U.S., Europe, and Japan but increasingly strategies and investor communications (42-45). also from emerging economies such as China and Recent research has emphasized that the view on Korea. This development reflects the increased rel- patents as the only significant IP regime is too narrow. Instead, strategies that integrate multiple IP regimes evance and speed of technology-based competition are most effective in securing and defending compet- and the gaining importance of patents in this context. itive advantages over time (12,46). Conley, Bican, and The following main developments have caused a fun- Ernst (46) show, e.g., that a combination of patents damental shift with regard to the relevance of patents: and trademarks over time (value transference) can First, patent holders are increasingly enforcing their help to extend monopoly position beyond patent patent rights. This has increased awareness among top expiry, thus increasing appropriability and market management with regard to the relevance of patents to share across multiple industries. secure and to defend competitive advantage and the Another stream of research has suggested that severe consequences of neglecting patent issues (14). the vast amount of information that is contained in Second, multiple market transactions have occurred patent documents can be used by decision makers that explicitly show the strategic and financial value in multiple areas, especially competitor monitoring, of patents. For example, Google bought Motorola for trend analyses and forecasting, R&D strategy assess- $12.5 billion in 2011 to acquire its patent portfolio in ment, identification and assessment of mergers and order to defend its Android operating system in a very acquisitions (M&A) targets, portfolio optimization, competitive telecommunication space (31,32). These identifying licensing opportunities, etc. (10,11,39). prominent cases further increased top management A recent study shows that firms that systematically awareness of the strategic and financial relevance use and analyze information contained in patent of patents (14,33). Third, firms have become more documents for these purposes achieve higher overall aware that patents can be commercialized by means of firm performance (profitability) and extract higher licensing (13,34,35). The external commercialization strategic and financial value from their patent port- of patented technology has become an important folios (29). Given the vast amount of patent data element of outbound open innovation strategies, available globally, it has become important to use and the establishment of technology markets for professional analytics tools that allow companies to these transactions has further enabled new business effectively analyze patent data and to help decision models based on patents (36). In sum, these trends makers elicit relevant insights (40). have caused top management to pay more attention In light of these developments, scholars have to patent-related matters because the strategic and suggested that firms need to follow a different man- financial relevance has grown. This development agement approach towards patents and other forms of has fundamentally changed how firms manage their IP (12,33,46,47). Recent research, based on a sample patent portfolios today. of 158 technology-based firms from the U.S. and Research has shown that firms do not file patents Germany, reveals that it is not the size of a firm’s only to protect their innovations. Other motives, patent portfolio, but rather the proficiency of man- such as licensing, cross-licensing, freedom to operate, agement of this portfolio, that impacts the amount patent pooling, investor relations, etc., have become of value that can be created via patents (29). Firms increasingly relevant (13,33,34). In this context, it has with higher levels of patent management proficiency become relevant to assess the value of patents. It has exhibit higher levels of overall firm performance and INTELLECTUAL PROPERTY AS A MANAGEMENT DISCIPLINE 485 own a more valuable patent portfolio in terms of department to this technology-based innovation accessing important technologies (e.g., by means of process will be outlined. A distinction will be made cross-licensing), attracting strategic partners, attract- with regard to the strategic vs. operational-tactical ing investors, and effectively constraining competitors contribution of the IP department to the process of (29). The strategic management of IP has thus become new knowledge creation and use (4). a critical firm capability to achieve and sustain a competitive advantage (15,16,48). Internal Technology Acquisition A key strategic task of technology management THE IP MANAGEMENT FRAMEWORK is to decide which, and in what intensity, internal The IP department, with its functional expertise, R&D tasks should be pursued (50). These important has emerged as an important actor to build up new R&D investment and portfolio decisions affect both capabilities (15). Table 2 illustrates the roles and con- the strategy and ultimately the success of firms in tributions of the IP department. technology-intense industries. False decisions may Technology-based innovation requires the acqui- lead to crisis or missed growth opportunities (e.g., sition and implementation (use) of new technological 51). Thus, these decisions require careful analyses, knowledge (4). The acquisition, as well as the use, of which include a) the early detection of technological new technological knowledge can either be organized changes, b) the assessment and forecasting of their internally or externally (4). The external part of new effect on the competitive positions of firms, c) the knowledge acquisition is often referred to as inbound awareness of R&D strategies of current and future open innovation and the external use of new knowl- competitors, as well as d) an understanding of alter- edge is often referred to as outbound open innovation native technological solutions with their respective (49). In the following, the contributions of the IP advantages and disadvantages (4).

e : IP Department’s Contributions to Technology Management Technology Creation Technology Use Internal Strategic Contributions: Strategic Contributions: - Forecasting - Long-term safeguarding of competitive position via - Competitor analysis an integrated IP strategy over the product life cycle - Technology assessment (including freedom to operate) - Portfolio decisions - Creation of a strong brand position - Protection of technological position and securing freedom to operate

Operational-Tactical Contributions: Operational-Tactical Contributions: - Patent applications - Protection of the unique selling proposition (USP) - Inventor support - Infringement monitoring and litigation - Information provision - Innovation controlling and communication

External Strategic Contributions: Strategic Contributions: - Target identification - Identification of exploitation options - Target assessment (quality, strategic fit) - Assessment of exploitation options - Assessment of different sourcing options - Selection of exploitation options - Creation and expansion of absorptive capacity

Operational-Tactical Contributions: Operational-Tactical Contributions: - Contract management - Contract management - Identification and management of important persons - Identification of potential users with knowledge (key inventors) - Assessment of technology value for potential users - Price management - Process management - Marketing support

Source: Based on Ernst (2014) 486 ERNST

By means of systematic patent analyses, the IP External Technology Acquisition (Inbound Open department provides decision-relevant informa- Innovation) tion. Tools and methods specifically designed for Firms have various options to generate technology this purpose have been developed and are applied externally, e.g., by means of licensing, R&D contract- (11,39,40,50). Ideally speaking, the IP department ing, R&D co-operations, acquisitions, or corporate possesses the necessary content and methodological venturing. The motives for external technology gener- knowledge to conduct meaningful patent analyses of ation are access to superior technological know-how, the firm. The early integration of the IP department the realization of synergy effects, improved market in firms’ strategic planning processes is advantageous knowledge, the reduction of R&D times and cost, because it can highlight options to build a sustainable and risk minimization (4). For strategic technology technology and patent position, and it can identify management, a key task is the decision if and how white spaces that can be exploited. This informa- external technology should be generated (4). tion is important for formulating R&D strategies, The IP department provides a solid base to make as they allow for the effective protection of chosen these decisions (11,29,39). Based on their patent- technology strategies and prevent blocking by third ing activities, owners of interesting technologies are parties. The IP department becomes a core element identifiable. Additional options may be established, of strategic decision making, influencing the forma- e.g., by determining the target firms’ patent portfolio tion and execution of firms’ business strategies. The qualities. To determine the patent quality, various effective implementation of these activities requires methods have been developed (39,40). Additionally, the cross-functional integration of the patent and it is possible to determine synergies and overlaps R&D departments (47,52) and other functions as with the focal firms’ patent portfolios, thus aiding in needed. the assessment of strategic fit between acquirer and In addition to these strategic aspects, the IP target, the choice of technology generation form, and department contributes operationally and tactically target object selection (53). Overall, the IP depart- to the process of internal technological knowledge ment delivers decisive input to successfully generate generation. The IP department is an important point external knowledge. It is, therefore, an important of contact for inventors to develop highly valuable element of leveraging a firm’s absorptive capacity patents. Based on their knowledge of the corporate (54). strategy and the corporate patent situation in the In addition to these strategic aspects, the IP relevant areas, as well as what is required to gener- department contributes operational and tactical tasks ate valuable patent applications, the IP department to the process of external technological knowledge facilitates the alignment of inventive activity with generation. It is often involved in contract manage- strategic goals. As the IP department also possesses ment, deciding on the success of targeted technology an overview of all R&D projects within the firm, it and knowledge transfer. It ensures the inclusion of can establish connections and craft a concept out of all relevant intellectual property rights, including the individual ideas. Redundant work is prevented, the transfer of required tacit knowledge. As a pre- and R&D processes are facilitated. The IP depart- requisite, knowledgeable persons working in target ment is able to provide this information prior to firms, frequently termed key inventors, need to be the R&D project start. However, the information identified (55). Particularly, the success of technolo- remains relevant throughout the R&D projects, as gy-motivated acquisitions depends on key inventors it serves to develop solutions or points to potential staying in the acquired firms (56). The IP department challenges and problems of intended technical solu- is able to pinpoint key inventors and help retain their tions. Therefore, close integration of the patent and valuable knowledge (55). R&D departments is recommended (47,52). Another difficult task in technology transactions is pricing, particularly if technologies are not yet established in markets (57). With its qualitative and strategic assessment of the respective patent INTELLECTUAL PROPERTY AS A MANAGEMENT DISCIPLINE 487 portfolios, the IP department provides important particularly important when patents expire. The information about the value of patented technologies. brand takes over the protection of the reputational This helps to make better pricing decisions, especially aspects of the original innovation independent of the since patents can be a reliable and objective proxy existence of patents. These elements of IP strategy metric for valuation. have to be used in combination over the product life cycle. At first, the functional protection of an Internal Technology Use innovation by patents is important so that the firm The classic internal use of technologies is the is exclusively able to create a brand via its branding development and launch of technology-based prod- efforts. Through a strategy that integrates patents and ucts, processes, and services (4). The core operational brands, firms become able to prolong their strategic task of the IP department is the protection of these competitive advantages beyond the expiration of innovations by means of intellectual property rights. patents. The implementation and success of such inte- Innovations perform well on the market if they offer grated intellectual property strategies, termed value clear benefits for the customer, a so-called value, transference, has been illustrated by case studies in or unique selling proposition (USP). It is, there- various industries, including pharmaceuticals, elec- fore, critically important that this value aspect of tronics, fast-moving consumer goods, and chemistry an innovation is protected by IP (46). Thus, the IP (46). In formulating these integrated IP strategies department should work closely not only with R&D in collaboration with other functional areas, the IP but also with the marketing department to better department enhances the benefits from using tech- understand and to effectively protect an innovation’s nological knowledge along the entire product life value proposition. The resulting patents create a sus- cycle. tainable competitive advantage that allows firms to achieve revenue growth and charge higher prices, External Technology Use (Outbound Open making these patents, in turn, strategically and finan- Innovation) cially important. In addition to internal technology use, there is The IP department has to further ensure the increasing external technology use, including licens- maintenance of these patents, including enforcement ing, technology sales, and spin-offs (57). Knowledge against third parties when necessary. Furthermore, markets have emerged, and best practice examples patent-based performance indicators can be used for lead firms to aim at commercializing and using inter- innovation performance assessment and controlling nally-generated knowledge externally also (34,36,41). purposes, as successful innovations usually possess Strategically, the IP department supports identifying, higher-valued patents compared to competitors (11). assessing, and choosing opportunities for external Innovation leaders should therefore have high-value technology use (29). Successful technology marketing patent portfolios, which can be identified via bench- requires knowledge about entire patent portfolios marking patent portfolios against the relevant peer since single patents are more challenging to be sold group (40). Objective patent indicators can further (41). Thus, each IP department needs to know its own be employed for investor relations purposes in order patent portfolio, including its gaps, to strategically to signal innovation leadership to important stake- purchase and out-license patents, thereby creating a holders (40). comprehensive portfolio that can best be marketed. The key importance of the USP highlights another In addition, knowledge of the competitive advan- important property right: the trademark. The USP of tages generated by potential buyers’ application of new products often plays a major role in establishing the patented technologies is required (57). The IP a new and strong brand (46). Through an integrated department can identify potential users and assess communications strategy, the patent-protected func- the value technologies may have for them via stra- tional aspect of a product can be transferred via tegic patent analyses. For example, strategic value trademarks into a strong brand that identifies the may be generated from closing a strategic gap in source of the initial innovation. This effect becomes the portfolio. Understanding the strategic relevance 488 ERNST of patent portfolios has implications for pricing the MANAGERIAL IMPLICATIONS respective patents (41). In addition, contracts have In order to make the contributions effective, to be prepared that include licensing agreements research has begun to address the managerial require- and, similar to external technology generation, ments of the IP department in light of these new other aspects of the transfer of tacit knowledge and market realities. Scholars have started to address the role of key inventors (55). Prior research on the the interactions between the IP department and external use of technological know-how shows that other functional areas in the organization, especially successful technology marketing is influenced by R&D (47,52,58). This research shows that the level of various aspects, including a firm’s corporate culture, cross-functional collaboration between the IP depart- strategy, organization, processes, teamwork quality, ment and R&D is critical for success. The role of and incentive systems (57). Usually, these tasks are the IP department and its alignment with R&D is beyond the scope of the IP department. Thus, the IP particularly important for performance in the case of department either needs to collaborate with other very innovative products or solutions (52). The inte- organizational functions for the purpose of external gration is achieved by top management engagement, knowledge use or may even strive to develop the the explicit integration of IP-related aspects into the necessary additional competencies and capabilities new product development process and milestones, to become the key driver in these important external and an IP-centric culture in the firm (28). Interactions technology commercialization processes. That would of the IP department with other corporate functions, require the existence of more business-related and such as marketing, design, branding, and advertising, entrepreneurial skills in the IP department. become very important for designing and imple- menting integrated IP strategies over the life cycle of a product (46).

e : Modern Approach to IP Management in Organizations

Strategy Explicit patent strategy Link to IP strategy with corporate strategy Motive: Maximizing strategic and financial value to the firms

Key performance Patent quality (value) indicators

Accountability Strong

Top management High exposure

Governance Independent IP entities with P/L responsibility, reporting to CEO or CTO, establishment of CIPO (Chief IP Officer) positions

Focus Strategic management of multiple IP assets, the focus is on value creation along multiple dimensions

Orientation Proactive, strategic

Organizational High (high level of cross-functional involvement, strong external orientation) embeddedness

Skills Legal and technical, in addition: strategic, financial, new business development, marketing/ branding, venture capital, risk assessment

Methods/Tools Use of methods and tools to support strategic IP management, including IP analytics

Integration across High (integration of multiple IP regimes) multiple IP regimes INTELLECTUAL PROPERTY AS A MANAGEMENT DISCIPLINE 489

Table 3 summarizes the modern approach to IP SUMMARY AND OUTLOOK management in contrast to the past (see Table 1). Overall, it has been shown that the roles and Firms have started to integrate their IP and business responsibilities of the “IP function” have dramati- strategies (59-60). The motives for filing patents have cally changed over time and are expected to continue expanded beyond protection and include licensing, to change in the future. IP is increasingly consid- cross-licensing, alliances and acquisitions, new busi- ered an important enabler for securing sustainable ness creation, freedom to operate, investor relations, competitive advantage. Top management has under- etc. The ultimate aim is to increase the strategic and stood that the right management of IP is the key to financial returns from investments into innovation maximizing the strategic and financial returns from and IP. Hence, the key performance indicator is investments in new technologies and innovations. not the number of patents filed but the quality and Top management focus on IP-related matters will, impact of patents with regard to generating these therefore, continue to increase. In order to leverage returns. Given the higher strategic priority given to IP as much as possible for the organization, the IP IP, top management exposure of the IP department is department will need to change from administrating much higher (61). This also involves a higher level of patents to a modern IP department that proactively accountability, in which investments can only be jus- and strategically manages a firm’s IP portfolio to tified in case of adequate returns. This has led in some maximize returns and impact. The key metric for organizations to the establishment of independent IP organizations with profit and loss responsibil- the IP department will shift from the number of pat- ity. The modern IP department is proactive and is ents filed to the generation of a high-quality patent actively engaged along the entire innovation process, portfolio that can be exploited in multiple ways as or life cycle, of the product. It focuses on multiple outlined above. This development will imply that the IP regimes and manages these properties in order to importance, visibility, impact, and accountability of maximize the value contribution of these intangible IP departments will significantly rise in their organi- assets to the firm’s goals (59,60). It has to interact and zations. That may even lead to the establishment of communicate with multiple functions, such as R&D, Chief Intellectual Property Officer (CIPO) positions. new business development, innovation, marketing, The role of the IP department will therefore transition design, strategy, finance, etc. It is, therefore, mov- from being, historically, a mainly legally and techni- ing away from a functional and internal orientation cally oriented corporate function to a more strategic towards being embedded with many functions and and management-oriented corporate function (46). processes inside and outside the organization (46). It This requires employees in IP departments to have uses a variety of tools and methods, especially those additional skills and qualifications. Some leading based on smart analytics solutions, which provide universities have, therefore, integrated classes on the valuable information to decision makers, e.g., on strategic management of IP management into their strategy, trends, or M&A opportunities (61,62). The curriculum. Overall, I anticipate an even broader dif- IP department, therefore, becomes a strategic con- fusion of IP management in research and practice as sultant to many parts of the organization, where it an important and independent discipline with strong needs to speak the language of the business and senior ties to technology and innovation management (63). executive decision makers (61). As the IP depart- ment transitions towards this level of IP management sophistication, it will have to acquire a set of new skills beyond the legal and technical domains (46). 490 ERNST

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