The purpose of a good intellectual property strategy is to obtain for the Corporation the sustainable advantaged business position. The key words in the sentence are sustainable over time and advantaged versus competition. In extreme cases the advantage becomes that of a monopoly. The traditional view of monopolies as “asset-based” are those with natural resources, markets, products, brands, and technologies as “Choke-Points”. An example was DeBeers which had a monopoly because it owned or controlled all the diamonds in the world. The Japan Tobacco Company was a monopoly because it owned access to all smokers in Japan. It was pointed out that monopolies may also be situational. If your monopoly is only a coffee shop or grocery store in an isolated community, you have a monopoly until someone else opens up a similar store across the street. Similarly, if you have only a product in particular category your monopoly existed only until the next successful entrant came along with something close. The key point is that the product or service doesn’t have to be intrinsically unique or different. It merely has to be the only one available to a set of buyers for a period of time. This becomes the first mover advantage that R&D strives for. It is a particular set of circumstances, the situation that arises from industry and competitive dynamics, which creates the temporary monopoly asset.
Patents can thus be thought of as monopolies as holding a market space for a useful period of time. Combining all intellectual property types into a strategic intellectual property plan is important because some assets like patents have only a limited lifetime whereas others, like trade secrets, can be held indefinitely.
Patents can also be thought of as financial instruments. This view was championed by the Patent & License Exchange, Inc. Normally, the word patent conjures up the legal definition being the right to exclude others from exploiting a technology. In the financial world however a patent creates the right to a cash flow from a technology that may or may not have value in the future. Patent Brokers take advantage of this aspect of patents. The other financial view of a patent is to consider it as a call option. A call option has the right to a cash flow from an asset that may or may not have value in the future. This is the value that Intellectual Property Landlords look for in patents.