I was introduced today to a new and intriguing blog titled Intellectual Profit, authored by Raymond Hegarty. A recent post titled “Ten Reasons for a Separate IP Commercialization Business Unit” caught my eye. Noting the recent encouragement from IP professionals for the CIPO position within the C-Suite of companies, Hegarty makes the argument for bypassing this extra seat in the board room, and leading the CIPO to his own and separate business unit, even in another jurisdiction. This is a move that, while appearing drastic, has created an incredible advantage and profit for a few businesses. This is, in effect, the ultimate step in turning a cost-center into a profit-center. While it could backfire and turn into a greater cost-center if the quality of the IP is not strong enough, high-quality IP and progressive-minded leaders of the separate business unit can effectively take advantage of benefits that otherwise would lie undiscovered.
The post goes on to identify multiple advantages of separating the IP commercialization process from the corporation’s operations. Examples include tax advantages, the ability to choose a friendlier jurisdiction for enforcement, the ability to avoid counterclaims in enforcing IP, greater transparency and easier compliance, ensuring confidentiality, the ability to avoid conflicts of interest, and more flexibility in allocating cost and profit.
While I believe that the determination between a CIPO position and a complately separate IP business unit is a fact-intensive one, calling for an assessment of resources and the quality of IP before making this move, the latter option that Hegarty highlights is undoubtedly a lucrative one for the right company with the right IP and leaders.
For a complete discussion of some of the advantages in a separate IP business unit for commercialization, see the POST at Intellectual Profit.