In order to understand the true importance of intellectual property you must look further than the subjects that form its parts.

Most people will know what a trade mark is and that you shouldn't give away a company secret.

But you can only understand the importance that intellectual property will assume in the next few years when you can appreciate how it interrelates with the mechanics of business today.

This wider perspective has been called `intellectual capital'.

Professor Stephen Barley, who teaches industrial engineering at Stanford University in California, calculated that 83% of the workforce in the United States in 1900 worked with `things' (labourers, craftspeople, hotel and restaurant workers etc.) but 59% of the workforce in 2000 work with information (managerial, administrative, professional, technical etc.).

This is merely the tip of the iceberg in indicating how business has changed and what the future holds.

We are now well on our way into the next `revolution' in working life. The industrial revolution drastically changed the world our ancestors lived in.

The information revolution, many argue, will have a similar impact.

American Airlines is only one of a number of businesses that have found their original `purpose' is becoming less attractive as a business model than a new, related information-based model.

The airline now makes more money from its Sabre reservation system than it does from its aircraft.

Other companies are retaining their core business but re-engineering the model so that their workers are more productive and consequently more valuable.

An example is the car manufacturer that employs fewer people to produce more cars and empowers workers to do their own troubleshooting and managerial work.

Other businesses are looking inwards to find assets that they can exploit more effectively.

Companies such as Dow Chemical Corp. and Rank Xerox actively exploit the patents that they have registered in areas unrelated to their core businesses.

Dow expects to increase its annual patent licensing from $25 million in 1994 to $125 million this year.

This significant income stream from licensing revenue generates more money for research and that in turn fuels the business model.

Companies now seek to make more use of their brands to increase revenue.

For example, many well-known brands now produce clothes -- an area completely unrelated to their original purpose.

The Virgin Group place their logo on products as diverse as wedding dresses to financial products to railway carriages.

They have leveraged the goodwill in their brand to attract new business and income.

In Bermuda, Gosling Brothers Limited has opened their Black Seal shop, selling everything from golf shirts to caps to jean jackets with the distinctive Black Seal logo.

These changes are not isolated. They are repeated across the business world as companies seek to make the most of their human resources.

Employees and the work that they do are changing. With the advent of voice recognition software who will guarantee that secretaries will still exist in ten years time? Or even in five years time? What does that mean to business and society? Intellectual capital in business includes the human resources of an organisation and the knowledge that they possess.

In order to make optimum use of the human resource a business needs a structure to share and apply this knowledge.

Once the structure is in place, it is the relationship with the customer that will determine how successful a business will be. This can be expressed by the goodwill in a trademark or the knowledge acquired of the marketplace.

How well a business can mobilise its intellectual capital will have a key effect on its future success, if only as a means of maintaining market share.

Consider, for example, how a business reacts when a client wants a piece of work done that is slightly out of the ordinary.

If the business has a good grasp of its knowledge base, and is thereby able to identify the relevant skills for the job, it should react immediately.

The job may be quickly turned around if the information that is required to complete the job is readily available.

The client will be impressed, and in these days of client mobility, that will stop him from taking his business elsewhere.

At the end of the job, the business should consider whether the skills required to complete it can be applied elsewhere.

If the structure is in place to effectively pass information onto others and quickly roll out a new service or product, then the business may be able to create a new revenue stream from one piece of work. If none of these are in place, conversely, the business may lose a client.

At all the points mentioned above the law of intellectual property can be used to provide protection for valuable assets.

Company confidential information may require protection; copyright material may have been copied by a competitor; a trademark may be exploited; or a business method may require patenting.

A well-run business will seek to identify its intellectual property assets, decide how best to protect them, and determine the most effective way they may be exploited.

*** Attorney Graham Wood is a member of the Information Technology and Intellectual Property team at Appleby Spurling & Kempe. Copies of Mr. Wood's columns can be obtained on the Appleby Spurling & Kempe web site at www.ask.bm.

*** This column should not be used as a substitute for professional legal advice.

Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.