1. PURPOSE: The purpose of the Taskforce Capabilities Program is to define the internal and external influences affecting the management of IP in the competitive enterprise so that the “Captains of Industry” may take actions to make their organizations more economically viable in the global economy, build shareholder value and usher in a new era of prosperity that recognizes and accommodates intellectual asset value and affect.

2. FOCUS: The initial focus is on defining the role of Intellectual Property in the enterprise and its effects on total corporate value in capital markets and global competition.

3. PROCESS: The Capabilities Definition & Delivery Process (Figure 1) is 4-step continuing cycle of research to define contemporary business practices, improve those practices, design innovative strategies to reshape the economic infrastructure and provide leadership and support for implementation.

FIGURE 1; Capabilities Definition & Delivery Cycle

	3.2) Collaboratively Create Better Practices Ø Enterprise Ø Department

3.1) Research to Define Business Practices & Needs Ø Intellectual Property Ø Intellectual Capital

3.3) Infrastructure Innovation Ø Economic Policy Ø Capital Markets Ø Law

	3.4) Implementation Ø Information Ø Education Ø Training/Coaching Ø Systems/Tools

3.1 Research: Research generates practice & need definitions opportunities and obstacles.

3.2 Collaborative Creation: Practices & needs spark creativity & innovation of new or improved practices.

3.3 Infrastructure Innovation: New practices focus on infrastructure changes to support economic activity, growth and national policy.

3.4 Implementation: Implementation is the “knowledge - skill pay off” in new capabilities for the individual, corporation, investor and nation.

4. MAPPING: The Taskforce utilizes a comprehensive process to “map” the capabilities of the enterprise. Drawing from its teams of Corporate Subject Matter Experts (SMEs) the Taskforce analyzes the critical functional capabilities needed for the organization to be competitive. Figure 2, Capabilities Mapping, illustrates the process as a drill down analyses of the traditional functions and their relationships to task specific levels of proficiency.

Given the “Map” of proficiency levels the Executive Team has a blue print it can use to benchmark, strategize and design their organizations for better and more competitive operations.

FIGURE 2; Capabilities Mapping

(“What affect does IP have on the systemic functions in the enterprise?)

Focus of Summit as SBC KV & Taskforce Work

May 17-18, 2005

1 - Corporate Function; i.e.

Operations

Legal

Finance

Focus of the Prototype

Map Presented

Dec 8, 2004 (Appendix E)

Marketing

Technology

Tax

Investor Relations

2 – Functional Capabilities; specifically.

Intellectual Property

3 – Value Extraction Mechanisms Capabilities Statements (See table)

Proficiency level 1

Proficiency level 2 Proficiency level 3

4 – Intellectual Capital

Proficiency breakdowns

into team & Individual

knowledge/skill sets

5.- Education & Training

Delivery

Universities

Corporate In House

Open Seminars

On Line

IP VALUE EXTRACTION MECHANISMS & CAPABILITIES LEVELS

(A Prototypical Map)

IP Value Extraction Mechanisms (NOT presented in any order of potential Impact)	Organizational Capability Statements Generally speaking, the scaling is structured as 1 is not competitive; 2 is competitive & 3 is advanced competitiveness	Value Scale (1-3)
1. Donation The act of obtaining tax credit for giving IP to an educational institution	1) Portfolio is not organized. (Donations should not be considered as a value extraction mechanism if the portfolio is not organized) 2) Portfolio is organized, periodically reviewed and can support competitiveness & tax based decisions 3) Portfolio is organized and regularly assessed regarding strategy, value, tax, market share and earnings impact.
2. Licensing In The act of obtaining IP rights to improve technology, processes or market share	1) Company has no IP or technology strategy. 2) Company has integrated IP & technology strategy; identifies patent(s) blocking access to a potentially valuable market and seeks to license to facilitate access to the market; further has relationships with universities, customers and suppliers in core technologies. 3) Company actively monitors and searches for technologies to create market opportunities
3. Licensing Out The act of making one’s IP available to others to create revenues	1) Company has no dedicated licensing activity. 2) Company engages in licensing activity that extends beyond obvious application and into other industries 3) Company uses an active licensing function aligned with strategy according to by technology and operates to protect IP and expand market share and earnings; preferably through a profit center structure.
4. Cross Licensing The act of providing IP rights to improve revenues, market share or access critical technology in exchange for making one’s own IP available to another party	1) Company has no cross licensing activity, except in a reactionary or expedient mode to reach a settlement or capture an opportunity. (Company is active in reaching out to maintain its technological base through employee education and publications, events, etc.) 2) Company develops and maintains alternative and supporting IP to make cross licensing opportunities available in critical technologies; cross-licenses to enhance brand identity in traditional markets 3) Company employs a formal communication and incentive system to support strategy and technology for invention, innovation and identification of potential infringement.
5. Sale –Accelerated License Back : The act of selling a selected portion of one’s IP portfolio for cash, licensing it back from the buyer and jointly participating in a more aggressive “out licensing” activity	1) Company’s licensing activity resides as a function of IP management 2) Company’s IP value extraction strategy and operations include tax, revenue and earnings considerations 3) Company’s IP value extraction strategy and operations are integrated among finance, IP, marketing, tax and investor relations with full confidence in Sarbanes – Oxley compliance.
6. Abandonment The act of stopping payment of maintenance fees for IP that is considered not economical to the company’s business purposes	1) Company’s portfolio is not organized and requires basic review to distinguish among IP value classifications; is a major project to impute value of portfolio. 2) Company’s portfolio is organized into classifications of value with some notion of value to business. 3) Company’s portfolio is dynamic and the process provides on-going accountability and review of IP classification and value extraction or cost containment decisions.
7. Spin –Out The act of creating a new venture based on IP and its perceived value in the market place	1) Company can identify critical and potentially marketable technology, but is dependent on other party to develop the business model. 2) Company can identify critical technology and develop business scheme to exploit it with other parties 3) Company systematically reviews its technology, innovative business practices and has relationships to develop and roll out a ‘new Co” or other venture structure (Company can set up its own business with an integrated financial, technology; strategy, IP and R&D capability.. serving as its own incubator.
8. IP for Equity The act of placing one’s IP rights into a new or existing venture for a share of ownership in the enterprise.	1) The company places its IP into the hands of another entity for a portion of ownership. 2) The company integrates its IP in a full business context with other organizations. 3) The company systematically reviews IP for its value in many varied structures to realize optimum value with other known entities.
9. Litigation The notification of infringement, threatening or filing suit for the purpose of extracting money or protecting technology or market share	1) Company is disrupted and has to find external infrastructure to assess validity of claims against it. (Company does not systematically review its technology for infringement liabilities or competitive advantage.) 2) Company knows industry, competition and nuisance players and can employ cross licensing or co-existence agreements while assessing potential impact of litigation on operations and market position; (Company may rely on litigation as one means to maintain or enhance value) 3) Company tracks new technologies and trends and is able to anticipate actions of others as they might affect operations and IPR.

Taskforce Proposed Value Rating Scale: Capabilities Statements (1-3) are used to rate (scale) the company’s capability. Generally speaking, the capabilities statements above:

(1) Statements that signify early stages of capability development

(2) Statements that signify where most competitive companies function

(3) Statements that signify advanced competitive capability