A colleague was talking recently with executives of a company based in India, and they told him something startling. They said that when their scientists made a breakthrough, they would scribble notes describing those ideas, and mail them to their lawyer based in the U.S., who would then, presumably, apply for American patents on the company's behalf. But they couldn't immediately recall how many or which ideas had been forwarded, or had actually earned patent protection.

Soon thereafter, a colleague was talking with a global company with a reputation for producing products of high quality. Over the years, they had pioneered innovative processes for developing, engineering and assembling their products, but until recently, had not aggressively sought patent protection for many of those ideas. They were just now making a concerted effort to do so.

In both of my conversations, the lesson was clear: businesses are, or should be, waking up to the idea that their intellectual property may be the most valuable, but under-appreciated, asset they own. In fact, U.S. firms leave $1 trillion on the table every year by under-using their intellectual property, according to the Harvard Business Review.

The management of intellectual property has gone from a necessary evil and an expense, to a competitive advantage and profit center. Businesses now have to not only create and track R&D and patents, but also increase, improve, license, share, sell and protect intellectual property. Not surprisingly, the shift of intellectual property from the back to front office was one of IDC's top 10 trends for 2006.

As with companies that work with experts from outside their company to manage their information technology operations, we now see companies partnering with experts to manage intellectual property. These experts not only provide software tools to simplify and automate the mechanics for accomplishing this, but also help companies think more strategically about the processes that make intellectual property more of an asset, and less of a burden.

The need for such management is more pronounced in industries such as financial services, which traditionally had not sought to patent as many ideas as companies in the technology or pharmaceutical fields. These days, firms with financial products and services are increasingly linking their offerings with unique technology that help them conduct research, crunch numbers, or present information.

Correspondingly, the number of financial services patents filed for, and earned, has risen steeply. A decade ago, there were just under 1,000 patent filings for the sector, while in 2006, that number had billowed to 6,226. Last year, there were five times as many financial patents that earned approval than in 1997, which saw only 200 or so granted. The importance of patents for other industries that deal with intangibles are surely also rising.

Legal matters figure prominently when it comes to intellectual property, given how valuable and litigious it tends to be. (Hopefully, recent patent reform bills in front of Congress will make it less prone to abuses.) In fact, intellectual property in the U.S. is worth as much as $5.5 trillion, more than the gross domestic product of any other country, say economists Kevin Hassett and Robert Shapiro.

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