He says that removing intellectual property rights would collapse the movie, music, software, publishing, pharmaceutical, biotech, and aerospace industries, to name just a few. He also contends that the patent system—much maligned for granting frivolous patents to technologies like Amazon.com's 1-Click—will continue to spur innovation, as it has for hundreds of years.

And thanks to globalism and the World Trade Organization (WTO), intellectual property should see greater protection from the international community. The foreshadowing of that future became evident in 1993 when the United States Trademark Association voted to change its name to the International Trademark Association.

Nations with a long history of disrespect for intellectual property rights, like India and China, are finally starting to recognize the benefits of complying with WTO intellectual property regulations as they look to protect homegrown innovations on the world market.

Among patent attorneys, you used to hear the following advice: "File early, file often." Not so much anymore. "That generates a lot of bad patents," Rivette says, "and a lot of money spent for nothing on patent attorneys. What is it that you've innovated that your competitors have to replicate to be competitive with you? Patent that. Don't patent everything under the sun."

How then to play the game? Rivette suggests, "A new mantra is going to spring up: Innovate, protect, and leverage." Intellectual property asset management systems (IPAMS) represent an emerging tool to do just that. A recent Gartner report concluded that IPAMS are becoming a key weapon in the fight for competitive advantage—especially as a way to "manage innovation." IPAMS can help companies pinpoint new sources of revenue, make sure they're keeping up with technology, and help them uncover new markets for existing intellectual property.

For Rivette, whose company offers an intellectual property management solution called Aureka Innovation Asset Management, interest in IPAMS is growing for two primary reasons. First, patent proliferation has made it difficult for potential innovators to avoid trespassing on someone else's intellectual property. Second, rights holders are getting more litigious.

Click to EnlargeGartner's Debra Logan cites similar concerns, adding, "While there are many very, very bad Internet business models, patent searching, publishing, and even filing on the Internet is a very, very good idea, and clever businesses can make money from supplying the apps on top."

Woody Ritchey, president and CEO of Delphion, a provider of intellectual asset management software and services that was spun out of IBM in 2000, is betting on it. Not only are companies and their competitors filing more patents than ever, he says, but they're also recognizing the untapped value in ideas. "Companies put so much effort into research and development," he says, "and they just have not realized all the return on their investment. Most companies probably use only about 10 percent of their patents in their products."

In fact, IBM stands as one of the best arguments for effective intellectual property management. From it, in 2000 IBM realized $1.7 billion in revenue, four times more than it did six years earlier. Its profit margin: better than 90 percent. According to Gartner, companies with substantial assets that pursue an intellectual property management strategy stand to increase related revenue by 50 percent.

Of course, all the software in the world won't help you if you're on the wrong side of the law. For businesses planning a patent strategy, there may be some good news. The Festo decision, handed down in November 2000 by the U.S. Court of Appeals for the Federal Circuit after 10 years in litigation (Law and Order, April 2001), is about to make its final stop at the Supreme Court. Mark Pickering, a partner at Pillsbury Winthrop, suggests that the controversial decision (if upheld) will further clarify the boundaries patents draw. The result: fewer lawsuits and more settlements, he says. Fewer patents too, perhaps.