Role of Intellectual Property in Knowledge Economy Date:   Monday , January 02, 2017 It is often said that \"Knowledge is Power...\" \"...But not unless one can enforce it\". added an IP Attorney. Global economy is pivoting today on a knowledge-centred mechanism. There is a vast change in how the four factors of production for any business are perceived today. The timeworn concepts of Land, Labour, Capital and Entrepreneurship are undergoing a paradigm shift wherein a new element is introduced as \'Capital\' and that is the Intangible Assets. These assets maybe as the most advanced technology, or the most cost-efficient method of production, or the most unique products, or the goodwill, or in form of royalties. It is evident that apart from harnessing and promoting innovation, Intellectual Property Rights (IPR) is about monetization and enforcement. Additionally, IPR provide a legal basis to any business house enjoy monopoly and hence have a sustainable competitive advantage. Further, in any transaction, value of IP continues to play an ever increasing role, given the rights attached therewith. Intellectual Property can be a very powerful strategic weapon in a takeover or a buyout environment. It is well documented when Volkswagen bid for Rolls Royce in 1998, it was probably under an impression that the deal included a perpetual license to use the \'Rolls Royce\' and \'Bentley\' trademarks. However, as it turned out, owing to a \'trademark ownership\' clause \'Rolls Royce\' trademark persisted to be an asset of Rolls Royce group and was not deemed licensed under the said deal. The irony is that not long after, BMW which was a competitive bidder of Volkswagen, acquired the \'Rolls Royce\' trademark to start a joint venture of BMW and Rolls Royce. It is essential for corporate houses and specifically, counsels, attorneys and financial advisers to understand the transfer of IPR as an integral part of a larger transaction. It is here that apart from due diligence which is conducted at the time of any merger or acquisition or any major financial deal, a specific IP due diligence ought to be conducted. Also, IP due diligence ought not be limited to scenarios of asset transfer alone, and should be extended to deals revolving around share transfer. It is pertinent that any transaction that might involve transfer of IP, not only the asset value but also encumbered liability (if any) needs to be assessed. An essential aspect to be kept in mind while conducting IP due diligence is that focus should be given on warranties to substantiate \'right to use and delegate the right to use\' than warranty as to the \'ownership\'; former generally proves to yield better financial returns. Additionally, IP is anticipated to be a dominant force in commercial transactions, both in volume and value. IP lends a powerful leverage in negotiating any acquisition to the small target company with a promising IP portfolio. The strategic acquisition of Motorola Mobility by Google is one such example. Motorola Mobility had a vast patent portfolio and comparatively very less distribution or manufacturing activities. Its strategy was to aggressively monetize on its IP assets by offering the same to new entrants in the IT hardware sector that offered high revenue. On the other hand, Google felt the need to further strengthen its patent portfolio in the field of communication. This situation helped Motorola Mobility to use its patent portfolio as leverage and Google on the other hand received the requisite patent portfolio it required to achieve desired commercial objectives. Subsequently, Google transferred a chunk of Motorola Mobility\'s patent portfolio to Lenovo. Some analysts believe that Google was apprehensive about the competition it might face from its own licensees that used non-Google Operating Systems; whereas, Lenovo which once had a strong presence in the market for its personal computers wished to enter the mobile manufacturing. Additionally, it is believed by industry experts that to make its presence felt in the US market, it was beneficial for Lenovo to employ Motorola\'s patents. It is evident how IP was a driving force and at the heart of all these major transactions. Startups and new age companies are not only realising the value of innovation but are also harnessing the same. FreeCharge, a digital payment firm owned by Snapdeal, has applied for a patent on their \'On the Go Pin\' system, an alternative to the widely used OTP (One Time Password) mechanism for online transactions. \'On the Go Pin\' system claims to not only satisfies the two-way authentication criterion as laid down by Reserve Bank of India (RBI) but also facilitates offline transactions, thereby making transactions faster. This technology and other similar solutions may go a long way in how online transactions are conducted today and one can only imagine the expanse of market it may capture. Given the strategic role played by IP assets in developing a competitive edge via innovation, revenue generation, any commercial transaction or as a tool to avoid potential litigation, it is essential that any organisation\'s Research & Development team, be well aware of such IP protections, and the organization be proactive in acquiring and enforcing its Intellectual Property Rights.