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James O’Shaughnessy, chief IP counsel of Milwaukee’s Rockwell Automation Inc., understands that there is both a hard and soft side to managing intellectual property. The hard side — filing patent applications and suits — can often be the easy part. The soft side of IP is making sure that an entire organization is looking for ways to exploit IP. Rockwell is a $4 billion, 23,000-employee mix of high technology and heavy industry that has spent the last several years spinning off businesses and recreating itself. To keep IP from getting lost in the corporate whirlwind, O’Shaughnessy brings IP lawyers and business executives together to form committees and teams. He also likes to champion the work of engineers, especially those he calls “agile thinkers,” the slightly offbeat employees who often have the best ideas. In a recent piece in The Wall Street Journal, he says his role is partly a “mentor of mavericks.” O’Shaughnessy was a partner at Milwaukee’s Foley & Lardner for 10 years and was outside counsel to Rockwell before joining the company in 1996. He went in-house because he felt he would have a greater role. “You need to be inside to continue making the corrections that are necessary to have a robust strategy,” he says. How does this touchy-feely stuff translate to hard numbers? The company does not break out its licensing revenue, and O’Shaughnessy is reluctant to talk in great detail about individual deals. One of O’Shaughnessy’s first tasks at the company was to set up Rockwell Automation Technologies as a separate unit designed to maximize IP. In 1999 Rockwell spun off a unit that makes semiconductor devices of optical networks into a separate company on the theory that it could capitalize on that market more effectively outside of Rockwell. The company contributed patents to the spin-off, Broadband Transport Technologies, and took an equity stake. In another instance, a startup wanted to license a piece of Rockwell technology, but O’Shaughnessy did not want to enter into a traditional licensing deal. Instead, Rockwell took equity in the company in exchange for the technology. “We are constantly looking for creative ways to convert [the] latent value [of IP],” he says. When Rockwell is named as a defendant in patent litigation, O’Shaughnessy doesn’t just follow the court action. He starts scouring Rockwell’s IP portfolio to see whether there might be bits and pieces he could offer as the basis of a cross-licensing settlement. One of the keys to success, O’Shaughnessy says, is recognizing that the value of IP is subjective. A piece of technology that may not fit Rockwell’s strategy might be of great value to another company. Likewise, Rockwell could not license a core piece of technology to a direct competitor but would be more willing to turn it over to a company that isn’t a competitor. O’Shaughnessy says that “a patent in a core technology has value outside the core market.” Easier said than done. O’Shaughnessy has five in-house lawyers who work on these scenarios. He also relies on outside consultants to help him understand how other companies might use Rockwell’s jewels.

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