A few years ago, I complimented an IBM pal of mine for his company's treasure trove of patents. When I mentioned the importance of innovation, he interrupted me, saying, “It's just as much about risk management as it is about innovation.”
He went on to explain that many of the patents Big Blue earns (and the company produces quite a few: 5,896 U.S. patents in 2010, the 18th consecutive year IBM topped the list of the most “patently productive” companies) help defend lawsuits filed by competitors and also prevent competitors from entering certain businesses.
IBM is not alone in its use of patents to bolster its risk management (and, despite what my friend said, drive innovation). The Wall Street Journal reported that Google bought a high number of patents last month â€“ including many from IBM â€“ to “defend itself against lawsuits.”
What's more, says Aon's John Bronson, tech companies are not at all the only companies that should invest in better patent management as part of a more effective overall risk management capability. Bronson notes that “patent trolls” â€“ small concerns that snap up patents for the sole purpose of suing (and settling with) organizations that they claim violate these patents (that may relate to products or operations) â€“ target potential “infringers” in all industries.
Besides, you don't have to be a troll to sue patent infringers. As the need to uncover profit in all corners of the company rises, more companies are dusting off their patents to see if they can amass more revenue by enforcing this form of intellectual capital.