Over many years, matter by matter, drafted contract by drafted contract, I have developed a dictionary of concepts, processes and systems relevant to the intellectual property and commercialisation law work I do. I use it when drafting contracts. In law, as in many other disciplines, without clear definitions, discussions and documents become less useful.

Lightbulb is a blog on commercialisation. So to move the blog's dialogue forward, this post seeks to define commercialisation and the related concepts of entrepreneurship and innovation. 

The idea of maintaining a dictionary first occurred to me when I received a fax of about four pages in the early 1990s from Jim Belshaw, a colleague in the Ndarala Group. Reading through his list of definitions in his fax I immediately recognised its value and great utility. Jim's academic background is in economics and he has considerable management know-how about technology commercialisation. 

Included in Jim's list were terms such as intellectual property, intellectual capital and knowledge.  At the time I had been a lawyer for about 10 years and had learnt to take great care in drafting "definitions" clauses in contracts. Those clauses usually appear at the beginning or near the end of written contracts. Their function is to list terms (ie words and phrases) and specify their agreed meaning between the parties.

They also freeze understandings between the contracting parties thus limiting the possibility of future disputes between them over the meaning of the defined words. They help the parties pull together rather than apart.

Preparing definitions is very hard work. It involves putting a great weight on one's shoulders, which reminds me of Atlas in the accompanying photo I took in New York's Rockefeller Center in the early 1980s.

For reasons worthy of detailed discussion at another time, lawyers tend to avoid putting into definitions clauses those words which fall into or come from disciplines outside of law. They don't for example make attempts in contracts to define the concepts of entrepreneurship and innovation. In the estimated 5,000 contracts I've reviewed over 20 years, I've seen commercialisation defined by other lawyers in a mere handful.

Yet clarity as to what parties mean by the term commercialisation and related terms unquestionably helps parties understand each other's circumstances and future.

I believe the silence of lawyers to make an attempt to define commercialisation, entrepreneurship and innovation is not helpful. They are concepts or processes relevant to assets of all types. Yet whether it is intellectual property (an asset type defined by lawyers), intellectual capital (a term defined by people in management), a technology (fields of which are defined by scientists and engineers) or intangible assets (an asset type defined by accountants), each asset type affects and is affected by entrepreneurship, commercialisation and innovation. 

Fortunately there is an increasing literature seeking to define entrepreneurship and it does a credible job. There has been 200 years of use of the term, well recorded histories of entrepreneurs, and many magazines with the word in the masthead or tag line. In contrast, there are very few definitions of a more recent term, commercialisation. As for innovation, the meaning attributed to it is too often so loose that it covers a myriad of concepts, processes, systems and assets. When this is the case discussions turn to mud.

It is in this context that the following definitions of entrepreneurship, commercialisation and innovation are posed for discussion in lightbulb.

• Entrepreneurship is a process which treats the factors of production (ie land, labour, capital and knowledge) to produce new businesses, products and services and take them through their entire cycle or part of it. It certainly involves the processes of innovation and sometimes commercialisation. Entrepreneurs recognise opportunities and capitalise on them. According to the Oxford dictionary the word "entrepreneur" originates from the Old French word entreprendre or  ‘undertake'. Entrepreneurship involves taking risk for reward. In a corporation entrepreneurship is balanced between the shareholders (who carry the risk), the directors (who set the policy direction of the corporation) and the executives (who manage and implement the corporation's strategies).
• Commercialisation is a process of development which converts or adds market value to intellectual assets (including intellectual property, intangible assets and intellectual capital) to derive benefits from a tradable product, service, technology, system, franchise or other asset. Commercialisation is the realisation of an opportunity. Conversion is central to the concept of commercialisation. It takes a product, service, technology or innovation through for example in-house production or a trade sale, licensing, joint venture or other type of collaboration, merger, business sale, or initial public offering. Commercialisation is often seen in terms of what it can do for a product or a technology but it can be applied equally effectively to intellectual, artistic or entertainment assets.
• Innovation is creative activity resulting in new creations and new ways of doing things. Change is central to the concept of innovation. The spectrum of activity covered by innovation is very broad and includes creativity, discovery or invention and at the other end merchandising, repackaging, relaunching, improvements, and line extension.

Criticisms of these definitions will be gratefully accepted. Further discussion will help clarify the direction of dialogue in lightbulb. The comments on these definitions by Philip Dutchak are acknowledged with thanks.