Australian Companies Hindered By IP Ignorance

A new survey conducted by Freehills and the Centre for Corporate Change (CCC) at the Australian Graduate School of Management has found that Australian firms risk being left behind unless they are able to successfully manage their intellectual property assests.

The survey of nearly 100 major Australian organisations found that although Australian companies have improved their aggregate IP performance, they are not excelling in this area by world standards. This is particularly true for mid-sized firms, with the best results coming from smaller organisations, those involved in product and service development, and those with a multinational link – either local multinationals or the subsidiary of an overseas multinational.

According to survey project leaders Professor Timothy Devinney of the CCC and Freehills partner Adam Liberman, more and more organisational value resides within intellectual property, yet the survey shows that IP is, on average, the least important activity in the value chain.

‘International stock exchange assessments of the value of assets of listed companies invariably conclude that more than 60 per cent of a company’s assets are intellectual property related,’ said Professor Devinney.

‘Yet most Australian organisations rarely conduct intellectual property audits, and few, if any, conduct IP valuations. It’s also rare for firms to have senior management and board members involved in IP management.

‘The results of the survey imply that managerial attitudes to IP management, and having the necessary skills to engage in the managerial activity, are what puts Australian multinationals and local multinational subsidiaries ahead of local companies. This needs to be addressed by local Australian firms if they are to compete internationally.’

Three case studies are examined in depth in the report: ANSTO, BHP Steel and Foster’s.

‘These three successful local firms utilise solid models for the discovery, management, exploitation and protection of IP,’ said Mr Liberman. ‘These cases, and the survey results, provide important lessons on proper IP management for other Australian firms.

‘There has to be a holistic approach encompassing the corporate and legal context – IP management requires dedicated management and legal staff, with concerted attention at the very top of the organisation.

‘Organisations also need to monitor and understand the world’s best practice in this area. Seeing the results that come from proper IP management overseas should lead to a culture of IP awareness pervading the organisation.

‘It’s not just the creation of knowledge that matters anymore. It must be captured and converted into marketable intellectual property that can be legally protected, and a proper system of management enforced.

‘Unless this happens, much of the effort at the front end will have been wasted. Hopefully this report and the case studies will encourage Australian firms to think more effectively about their most valuable asset – the intellectual capability of their organisation.’