January, 2009: Intellectual property management is the most dynamic concept of the modern era of science, technology and knowledge based business organization. Although there are different connotations of IP management such as intellectual capital management, human capital management and intangible asset management but broadly it's meaning converges towards IP commercialisation, IP valuation and IP audit. IP commercialisation has several aspects including IP leveraging and IP financing. The traditional mode of IP financing was limited to licensing of patent or copyright and thereby earning royalty or direct sale by way of assignment. The modern approach includes IP auctioning through online established auctioneers and through IP exchanges with the help of technology market and technology trading exchange. IP securitisation is gradually gaining recognition in the banking field and also by the private investment funds. IP is used as collateral by pledging patents, trademark or copyrights similar to tangible assets such as real estate, equipments and inventory.

Altitude Capital Partners is a US$250 million private investment fund which invests in IP asset and IP focused companies. The credit lending institutions classify the IP assets into two categories: 1) Cash flow assets and 2) Assets with implicit value which is generally based on customers' list and database. The cash flow assets are generally identified in film and music industry and its span is expanding in biotechnology and software industries. The legal framework for IP securitisation varies from country to country but United Nations Commission on International Trade Laws (UNCITRAL) and International Chamber Of Commerce are working out a common legal framework for such securitisation. Generally a legal mortgage is created whereby the lender becomes the IP owner or sometimes an assignment of license is executed in favour of the lender which is licensed back to the debtor. There have been successful instances of such licensing of copyrights of songs and music whereby the artists and the credit institutions have helped each other in IP leveraging through IP securitisation.

IP valuation is one of the most important aspects of IP financing. The IP valuation is generally done for the purposes of taxation, securitisation, sale, licensing and for determination of the price of shares in case of initial public offerings. German Institute of Standardisation has laid down the principles of proper patent valuation in its document PAS 1070 (SAB). International Chamber of Commerce has also suggested for a Patent Valuation Committee for developing an International Standard for IP valuation as per ISO standard. IP taxation is also a critical area in case of transfer of technology to determine transfer pricing in case of licensing and assignment involving arm's length transactions.

IP due diligence and IP audit are the tools which help transfer of technology by way of licensing or assignment or in case of mergers and acquisitions. The process of IP due diligence is highly technical and is carried out by experts who have the knowledge of different IP laws and who are well versed with the intricacies of the technologies involved in the transfer. Adequate compliance of IP audit and due diligence avoid future litigations and establishes the genuinity of the transaction by holding legal title of the transferor. IP audit is important not only in case of transfer of technology but also for proper IP portfolio management.

IP asset management thus comprises several important aspects from identification of IP, its protection, commercialization, leveraging, valuation, and audit to IP analysis with the help of competitive intelligence for the survival and growth of business entities in the present era of knowledge and globalised world.

ITAG has chosen IP asset management as its niche area and the present effort to organize the international conference on IPR at the beginning of the year 2009 in the country its maiden attempt to disseminate knowledge in this field for the emerging Indian economy. We wish that we shall be able to empower business entities through their intellectual property rights.

--Dr. D. R. Agarwal