In today’s knowledge-driven economy, the ability to understand and manage intellectual property (IP) is no longer a niche skill – it is a strategic imperative. Businesses increasingly rely on intangible assets to differentiate themselves, drive innovation, and create value. Yet, despite their fundamental importance, IP concepts often remain abstract and misunderstood, especially by those outside legal or licensing circles.
This gap in understanding can lead to missed opportunities, undervalued assets, and loss of competitive advantage. To bridge the gap, we must rethink how we communicate IP – not just in terms of legal frameworks, but in ways that resonate with how businesses operate and make decisions.
The Traditional Lens: IP as Physical Property
Historically, intellectual property has often been explained through analogies to physical property. This approach helped demystify licensing by drawing parallels to familiar concepts:
- Lease clauses became licence terms
- Sale translated to assignment
- Rent mirrored royalties
These crude comparisons offered a structured way to think about ownership, control, and value exchange.
However, with intangible assets increasingly dominating the value of businesses, and a greater degree of sophistication in how IP is handled by some, a more nuanced approach is required to convey the many ways that IP can be handled within a business.
Sophistication in IP
IP sophistication is described in the Value Hierarchy framework outlined by authors Julie Davis and Suzanne Harrison in their book, “Edison in the Boardroom”. The framework is conceptualised in the form of a pyramid, that outlines five levels of sophistication in how companies manage their intellectual property (IP) assets.
The five levels in order from the base level to the apex are Defensive, Cost Centre, Profit Centre, Integrated and Visionary.
IP value is dramatically increased at the level of “Integrated” when IP strategy and business strategy are integrated so that understanding how to work intellectual property is what identifies opportunities and drives strategic decisions. The Visionary apex level has IP forming a central role in business, shaping markets and creating opportunities.
While it is rare for businesses to operate at the top levels of the pyramid, a better understanding of the relevance of IP to their businesses can help that journey.
The author’s book “The Hidden Mechanics of IP” provides an analogy that makes the many ways by which intellectual property can be treated more relatable by comparing them to familiar manufacturing considerations.
A Refined Analogy: The Fragile Vase
To reframe how we think about IP, consider this: imagine your organisation makes rare and delicate vases. These vases are not just decorative – they are central to your business’s value proposition. Their uniqueness, craftsmanship, and brand association make them irreplaceable.
Protecting these vases would involve:
- Educating staff on their value and proper handling
- Restricting access to the most valuable pieces
- Ensuring no one gives the vases away
- Standardising production to avoid breakages
- Retaining the designers who create them
- Building a premium brand around them
- Combating counterfeit versions
- Safeguarding the secret techniques used to make them
Now, swap out “vases” for “intangible assets” – patents, trade secrets, designs, data, know-how. You can see how the analogy holds.
A significant shift in perspective is gained by considering standard business operating procedures first and then applying the same principles to handling intellectual property. Teams can now visualise the vulnerability and value of IP. It encourages proactive care, strategic thinking, and cultural alignment around protection.
This analogy also highlights why fostering an IP-conscious culture is one of the most powerful protection mechanisms. Legal tools alone are not enough. Staff must understand, follow, and enforce internal practices that preserve and enhance IP value – especially for assets that cannot be formally registered or are difficult to legally enforce (referenced as I-Stuff in “Edison in the Boardroom”).
Final Thoughts
Reframing IP through the lens of manufacturing operations in relation to fragile and valuable products and not just legal structure can transform how businesses engage with their intangible assets. It moves the conversation from compliance to strategy, from abstraction to action.
By making IP relatable and tangible, we empower teams to treat it with the care it deserves. And in doing so, we unlock its full potential—not just as a legal construct, but as a driver of innovation, reputation, and long-term success.
It is all in the way you frame it.
About the author:
Kate, a former founding partner of James & Wells, is a registered patent attorney (in New Zealand and Australia), has degrees in physics and chemistry, and is internationally recognised as a leading IP strategist with particular experience in patent matters. She is also an educator in all matters IP and intangible asset related, author of The Hidden Mechanics of IP: Demystifying Intellectual Property and has extensive expertise in establishing and managing IP portfolios.
