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Chapter 9 Supporting Knowledge Work
Brief Contents
  • Introduction to Knowledge Management
  • Part I - Supporting knowledge work
  • Human, Structural, and Customer Capital
  • The Cultural Side of KM
  • Value, Usage, Sharing, Social & Ecological Issues of Intellectual Capital
  • Part II - Computer Ethics
  • Information Privacy
  • Intellectual Property Rights
  • Legal jurisdiction
  • Online contracting

Introduction to Knowledge Management

The idea of a KM is to enable employees to have ready access to the organization's documented base of facts, sources of information, and solutions. For example a typical claim justifying the creation of a KM might run something like this: an engineer could know the metallurgical composition of an alloy that reduces sound in gear systems. Sharing this information organization wide can lead to more effective engine design and it could also lead to ideas for new or improved equipment.

What is Knowledge?
Before we getting to know what is "Knowledge Management", it is better to know what is "Knowledge" first. In normal conversation we use knowledge to mean: Knowing that (facts and information) , Knowing how (the ability to do something)

Knowledge is also defined as (i) expertise, and skills acquired by a person through experience or education; the theoretical or practical understanding of a subject, (ii) what is known in a particular field or in total; facts and information or (iii) awareness or familiarity gained by experience of a fact or situation. Philosophical debates in general start with Plato's formulation of knowledge as "justified true belief". There is however no single agreed definition of knowledge presently, nor any prospect of one, and there remain numerous competing theories.
Sometimes, we use the word knowledge to mean that we have some information. In philosophy, knowing that something is the case implies that what is known is true.

'Knowledge: the sum of what is known' - Oxford English Dictionary

What is Knowledge Management (KM)?
Knowledge Management (KM) is a streamlined approach at improving intellectual capital (i.e. data, information and knowledge) collecting, maintaining, sharing and disseminating across the entire organization. KM focus on busienss objectives of organization, such as continuous improvement of performance, sharing of lessons learned, innovation, as so an organization can generate a competitive advantage in the market.
Reference: http://en.wikipedia.org/wiki/Knowledge_management

Knowledge Management is the set of processes that seeks to change the organization's present pattern of knowledge processing to enhance both it and itsoutcomes. A discrete Knowledge Management activity is one that has the same goal as above or that is meant to contribute to that set of processes. Thediscipline of Knowledge Management is the study of such processes and their impact on knowledge and operational processing and outcomes. The foregoing implies that KM doesn't directly manage, create or integrate most knowledge outcomes in organizations, but only impacts knowledge processes (performed by operational process agents), which, in turn, impact knowledge outcomes.

Why we need Knowledge Management (KM)?
It can be divided into external business factors and internal organizational factors:
External business factors:
(1) Marketplaces are increasingly competitive and the rate of innovation is rising.
(2) Competitive pressure reduce the size of the work force that holds valuable business knowledge.
Internal organizational factors:
(1) Organizations compete on the basis of knowledge.
(2) Products and services are increasingly complex, giving them with a significant information component.
(3) Early retirements and increasing mobility of the work force lead to loss of knowledge.

Key benefits of Knowledge Management (KM)
Knowledge Management (KM) goal for organizations must lead to leveraging the organizational knowledge for benefits in business, the key KM benefits are including:
(1) Leverage "lessons learned" to lower expenses.
(2) Share information to create new ideas and increase revenue or decrease expenses.
(3) Improve the corporation's ability to adapt to change and opportunities in the market.
(4) Foster innovation through the sharing of past solutions and collective ideas.
Reference: Knowledge management - Wikipedia http://en.wikipedia.org/wiki/Knowledge_management

Advantages of KM:
1. Sharing of valuable organizational information throughout organisational hierarchy.
2. Can avoid re-inventing the wheel, reducing redundant work.
3. May reduce training time for new employees.
4. Retention of Intellectual Property after the employee leaves if such knowledge can be codified.
  • Changes in strategic direction may result in the loss of knowledge in a specific area.
  • There is a need to manage increasing complexity as small operating companies are trans-national sourcing operations
  • The amount of time available to experience and acquire knowledge has diminished.
Ref: http://www.media-access.com/whatis.html

Knowledge management (KM) is a range of practices used in an organisation to identify, create, represent, distribute the thought and experiences of staff. The gathering of insights and experiences become knowledge, and these processes or practice known as knowledge managment.

Motivation of using KM
  • Preserve and making the availablity of knowledge content in the process of business development
  • Shorten new product development cycles
  • Provide better facilitatie for managing innovation and organizational learning
  • Specialization across the organization
  • better knowledge share between internal and external individuals
  • Encourage employees to express their opinion and their ideas towards to their work
  • Built-up an intellectual capital and intellectual assets in the workforce

Ref: http://en.wikipedia.org/wiki/Knowledge_management

What is Knowledge Management?
Knowledge management is an audit of "intellectual assets" that highlights unique sources, critical functions and potential bottlenecks which hinder knowledge flows to the point of use. It protects intellectual assets from decay, seeks opportunities to enhance decisions, services and products through adding intelligence, increasing value and providing flexibility.
Knowledge management complements and enhances other organizational initiatives such as total quality management (TQM), business process re-engineering (BPR) and organizational learning, providing a new and urgent focus to sustain competitive position.

Why should you apply Knowledge Management?
To serve customers well and remain in business companies must: reduce their cycle times, operate with minimum fixed assets and overhead (people, inventory and facilities), shorten product development time, improve customer service, empower employees, innovate and deliver high quality products, enhance flexibility and adaption, capture information, create knowledge, share and learn.
None of this is possible without a continual focus on the creation, updating, availability, quality and use of knowledge by all employees and teams, at work and in the marketplace.

What is Knowledge Management?

Knowledge Management is the process through which organizations generate value from their intellectual and knowledge-based assets. Most often, generating value from such assets involves sharing them among employees, departments and even with other companies in an effort to devise best practices. It's important to note that the definition says nothing about technology; while KM is often facilitated by IT, technology by itself is not KM.

What is Information?
Information is a non-random structure within a system, indicating future interactive potentialities, either originating along with it, or acquired or developed by it in the course of its interacting with and responding to its environment. This definition does not require correspondence between information and the environment. Nor does it assert that information is encoded in some simple cause-and-effect fashion, but leaves room for emergent information in the context of interaction with the environment.
What is Knowledge?
Knowledge is a tested, evaluated and surviving structure of information (e.g. DNA instructions, synaptic structures, beliefs, or claims) that may help the living system that developed it to adapt. This is our general viewpoint. It is consistent with our definition of information.

Part I – Supporting Knowledge Work

SECI Model

Source: Nonaka and Takeuchi, 1995

SECI stands for a four-phase knowledge development cycle. It represents the spiral of explicit knowledge from tacit knowledge in the workplace:

S: Socialization (tacit-to-tacit)
Much knowledge lies in people's brains. The aim for the knowledge worker is to find ways to collect this tacit knowledge. Socialization consists of sharing knowledge through social interactions.
People hold indeed know-hows, secrets, personal skills that will never be shared if none work on it. It is very important to try to gather this knowledge by socializing, that is, using face-to-face communication or better, share experience directly at work through 2 roles: the tutor and the apprentice.
Socialization is a very effective means of knowledge creation, maybe one of the easiest but nethertheless the more limited. It is also very difficult and time-consuming to disseminate all knowledge using this mode only.

E: Externalization (tacit-to-explicit)
The process of externalization (tacit-to-explicit) gives a visible form to tacit knowledge and converts it to explicit knowledge. In this mode, individuals are able to articulate the knowledge and know-how and, in some cases, the know-why and the care-why.

C: Combination (explicit-to-explicit)
Combination is the process of recombining discrete pieces of explicit knowledge into a new form.
No new knowledge is created at this step. It is rather to improve what we have gathered so far, to make synthesis or a review report, a brief analysis or a new database. The content has been basically organized logically to get more sense, consolidated.

I: Internalization (explicit-to-tacit)
The last conversion process, internalization, occurs through diffusing and embedding newly acquired and consolidated knowledge.
Internalization converts or integrates shared and/or individual experiences and knowledge into individual mental models. Once internalized, new knowledge is then used by employees who broaden it, extend it, and reframe it within their own existing tacit knowledge.

1. Socialization: tacit-to-tacit knowledge transfer from expert to learner
2. Externalization: conversion to explicit group knowledge
3. Combination: combining new explicit knowledge with other existing explict knowledge
4. Internalization: conversion back to individual tacit knowledge

Figure: SECI model, the process of creating new knowledge through interaction and conversion between tacit and explicit knowledge.
Source: Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge Creating Company, New York, Oxford University Press, 1995.

The digram above represents the two kinds of knowledge (tactic and explict knowledge) and various approaches of transition between them. The knowledge-creating process takes the form of spiral, not a circle. In the "knowledge sprial", the interaction between tactit and explicit knowledge is amplified throguh the four modes of knowledge conversion. The spiral becomes larger in scale as it enriches knowledge contents and moves up the ontological levels from individual to group to organizational, and then back into the individual level. It is a dynamic, never-ending process, starting at the individual level and expanding as it moves through communities of interaction that transcend individual, sectional departmental, divisional, and organizational boundaries.

Two kinds of knowledge
Tactic knowledge:
refers to a knowledge which is only known by an individual and is private and unique to each person. Since tactic knowledge is based on habits of culture of individual, so It is difficult to capture and codify as opposed to explicit, but, its benefits are far greater.
Explicit knowledge: is a knowledge that can be captured and codified in media, and easy to share with each other.

Four modes of knowledge conversion
Socialization: individuals obtain skills and create tactic knowledge by sharing direct experiences with others in the same time and space.
Externalization: separate tacit knowledge such as individual's mental models get integrated into a group's mental model, which is then articulated into explicit concepts through dialogue and reflection.
Combination: new explicit concepts created by the group are combined with exiting explicit knowledge to form a systemic knowledge at the organization level.
Internalization: individuals collect tacit knowledge of know-how by using the product and service.

Take actions from S (Socialization) --> E (Externalization) --> C (Combination) to I (Internalization)

In socialization,
Step 1: perceiving the reality as it is;
Step 2: sensing and empathizing with others and the environment;
Step 3: transfering tactit knowledge;
In externalization,
Step 4: articulating tacit knowledge using symbolic language;
Step 5: translating tacit knowledge into a concept or prototype;
In combination,
Step 6: gathering and integrating explicit knowledge;
Step 7: breaking down the concept and finding relationship among concepts;
Step 8: editing and systemizing explicit knowledge;
In internalization,
Step 9: embodying explicit knowledge through action and relfection;
Step10: using simulation and experiments

Understanding how to leverage each stage within project environment will ensure that there is maximum knowledge reuse and therefore less waste and recreation.

Managing Knowlege
Each company has their own style to manage of knowledge. It was because each company has different culture and organizational processes. These facts will affect the knowledge.
We can separate the knowledge into two types, Tacit and Explicit
Tacit Knowledge
The knowledge will hold by some colleagues, and cannot transfer to others. This may caused by some factors, like people, environment, time and etc.

Explicit Knowledge
The knowledge will share to public, everyone can get the knowledge. It was because the people will well prepare a document and the knowledge are easy to make a document.

Document of Tacit Knowledge vs. Explicit Knowledge http://www.knowledgeboard.com/download/3512/Tacit-vs-Explicit.pdf

Knowledge Lifecycle
First stage is Human to create or capture knowledge
Second stage is Company to classify different kind of knowledge
Third stage is Company to transfer the knowledge to different kind of colleagues and allow them to access.
Fourth stage is Human to absorption and use. They will base on the existing knowledge to create a new knowledge. This will back to first stage.

Below is another presentation of knowledge lifecycle


Figure: Seven stages of implementation of knowledge management, form a cycle of continuous improvement
Some small-medium enterprises are also follow the seven stages to implement KM.
Stage 1: Defining targets for knowledge management
- organization needs to analyse its business transactions and define its goals. In this stage, knowledge coordinators need to think about how to handle knowledge? Why an organization needs KM? What will an organization get the KM benefits?
Stage2: Staff project "knowledge management" - the major purpose of KM is to support the employees to enhance their knowledge in organization by interactions with others (e.g. experts and professionals). So, the knowledge coordinators need to introduce "employee-based knowledge management".
Stage 3: Knowledge map of the organization - define knowledge and source which are existing in an organization. Produce a knowledge map and let staff know where the knowledge is.
Stage 4: Customers-suppliers-knowledge - organizations must work for customers, work with suppliers, their roles in marketplace are according to the law and the norms of society. Organizations need to get an sufficient knowledge from the business environment.
Stage 5: Knowledge network and ICT - ensures stability of information and communication technology (ICT); enables a situable ICT is applied in an organization.
Stage 6: Knowledge management in practice - update the knowledge in systems.
Stage 7: Continuing improvement - make a sustaining improvement and further improvement in an organization; evaluate the KM systems regularity.
Reference: http://knowman.ifw.uni-bremen.de/

Types of Knowledge
The two types of knowledge are:
  1. Tacit
  2. Explicit

Explicit knowledge
Can be articulated into formal language, including grammatical statements (words and numbers), mathematical expressions, specifications, manuals, etc. Explicit knowledge can be readily transmitted others. Also, it can easily be processed by a computer, transmitted electronically, or stored in databases.

Tacit knowledge is implicit and is not necessarily or easily articulated in formal documents. The owner of this knowledge is aware that they have it and it is gained over a period of time from experiences and includes insights, emotions and the concept of 'how things are done around here'. People build up tacit knowledge during time spent in a role or within an organisation. New employees begin to build up tacit knowledge when the join a new organisation. It is often hard to share with others.


Tacit knowledge
Personal knowledge embedded in individual experience and involves intangible factors, such as personal beliefs, perspective, and the value system. Tacit knowledge is hard to articulate with formal language (hard, but not impossible). It contains subjective insights, intuitions, and hunches. Before tacit knowledge can be communicated, it must be converted into words, models, or numbers that can be understand. In addition, there are two dimensions to tacit knowledge:
o Technical Dimension (procedural): This encompasses the kind of informal and skills often captured in the term know-how. For example, a craftsperson develops a wealth of expertise after years of experience. But a craftsperson often has difficulty articulating the technical or scientific principles of his or her craft. Highly subjective and personal insights, intuitions, hunches and inspirations derived from bodily experience fall into this dimension.
o Cognitive Dimension: This consists of beliefs, perceptions, ideals, values, emotions and mental models so ingrained in us that we take them for granted. Though they cannot be articulated very easily, this dimension of tacit knowledge shapes the way we perceive the world around us.
Nonaka & Takeuchi further discuss the four modes of knowledge creation or conversion that are derived from the two kinds of knowledge:

Explicit knowledge is the things that an individual knows and can easily write down. This type of knowledge often comes through learning by observation, reading or group discussion. Often this type of knowledge can be made into print or electronic guides or stored on an intranet or database. For example the exact sequence of steps that needs to be taken to check the receipt of journals within your information service.

To tacit knowledge

To explicit knowledge

From tacit knowledge



From explicit knowledge



o Socialization: from tacit to tacit -- Sharing experiences to create tacit knowledge, such as shared mental models and technical skills. This also includes observation, imitation, and practice. However, "experience" is the key, which his why the mere "transfer of information" often makes little sense to the receiver.
o Internalization: from explicit to tacit -- Embodying explicit knowledge into tacit knowledge. Closely related to "learning by doing." Normally, knowledge is verbalized or diagrammed into documents or oral stories.
o Externalization: from tacit to explicit -- The quintessential process of articulating tacit knowledge into explicit concepts through metaphors, analogies, concepts, hypothesis, or models. Note that when we conceptualize an image, we express its essence mostly in language.
Combination,: from explicit to explicit -- A process of systemizing concepts into a knowledge system. Individuals exchange and combine knowledge through media, such as documents, meetings, and conversations. Information is reconfigured by such means as sorting, combining, and categorizing. Formal education and many training programs work this way.

Reference Link: http://www.sos.net/~donclark/knowledge/knowledge.html

Explicit Knowledge

Explicit knowledge, is knowledge that has been articulated and, more often than not, captured in the form of text, tables, diagrams, product specifications and so on. In a well-known and frequently cited 1991 Harvard Business Review article titled "The Knowledge Creating Company," Ikujiro Nonaka refers to explicit knowledge as "formal and systematic" and offers product specifications, scientific formulas and computer programs as examples.For example, explicit knowledge with which we are all familiar is the formula for finding the area of a rectangle (i.e., length times width). And, explicit knowledge include documented best practices, the formalized standards by which an insurance claim is adjudicated and the official expectations for performance set forth in written work objectives.

Tacit Knowledge

Tacit knowledge is knowledge that cannot be articulated. As Michael Polanyi (1997), the chemist-turned-philosopher who coined the term put it, "We know more than we can tell." Polanyi used the example of being able to recognize a person's face but being only vaguely able to describe how that is done. This is an instance of pattern recognition. What we recognize is the whole or the gestalt and decomposing it into its constituent elements so as to be able to articulate them fails to capture its essence. Reading the reaction on a customer's face or entering text at a high rate of speed using a word processor offer other instances of situations in which we are able to perform well but unable to articulate exactly what we know or how we put it into practice.

Implicit Knowledge

Knowledge that can be articulated but hasn't is implicit knowledge. Its existence is implied by or inferred from observable behavior or performance. This is the kind of knowledge that can often be teased out of a competent performer by a task analyst, knowledge engineer or other person skilled in identifying the kind of knowledge that can be articulated but hasn’t. In analyzing the task in which underwriters at an insurance company processed applications, for instance, it quickly became clear that the range of outcomes for the underwriters' work took three basic forms:
(1) they could approve the policy application
(2) they could deny it or
(3) they could counter offer. Yet, not one of the underwriters articulated these as boundaries on their work at the outset of the analysis. Once these outcomes were identified, it was a comparatively simple matter to identify the criteria used to determine the response to a given application. In so doing, implicit knowledge became explicit knowledgele.


Examples of transforming tacit knowledge to explicit knowledge:
  • A new librarian makes notes about creating a current awareness bulletin that is being verbally explained to them.
  • An individual new to journal article writing may write a second article about the process of beginning a first publication project to help other individuals in similar situations in the future.

Human, Structural, and Customer Capital

Definition of human capital

Health, knowledge, motivation, and skills, the attainment of which is regarded as an end in itself (irrespective of their income potential) because they yield fulfillment and satisfaction to the possessor. In an organizational context, human capital refers to the collective value of the organization's intellectual capital (competencies, knowledge, and skills). This capital is the organization's constantly renewable source of creativity and innovativeness (and imparts it the ability to change) but is not reflected in its financial statements. Unlike structural capital, human capital is always owned by the individuals who have it, and can 'walk out the door' unless it is recorded in a tangible form, or is incorporated in the organization's procedures and structure.

A measure of the economic value of an employee's skill set. This measure builds on the basic production input of labor measure where all labor is thought to be equal. The concept of human capital recognizes that not all labor is equal and that the quality of employees can be improved by investing in them. The education, experience and abilities of an employee have an economic value for employers and for the economy as a whole.

Definition of structural capital

Competitive intelligence, formulas, information systems, patents, policies, processes, etc., that result from the products or systems the firm has created over time. One of the three types of intellectual capital (the other two are 'customer capital' and 'human capital'), it does not reside in the heads of the employees and remains with the organization even when they leave.

Definition of customer capital

Value of relationships that a firm builds with its customers, and which is reflected in their loyalty to the firm and/or its products. It is one of the three kinds of intellectual capital of a firm (the other two are human capital and structural capital) that are not reflected in a balance sheet.

ref link: http://www.businessdictionary.com/


Customer capital is the value of an organization's relationships with the people with whom it does business, or the value of the companies franchise, its ongoing relationships with the people or organizations to which it sells.

Human Capital

The sum of a company's employees including their skills, competencies, talents, creativity and know-how. Within each employee is the knowledge the company seeks to utilize.

Structural Capital

The sum of a company's tangible assets including financial assets, buildings, machinery and equipment, manufacturing facilities, distribution channels and sales outlets.

Customer Capital

The sum of a company's customers including their names, contracts, contact databases, loyalty, satisfaction, references, testimonials and future revenues.


Figure. The relationship of Human Capital, Structural Capital and Customer Capital


What is customer capital?
Customer capital is the value of an organization's relationships with the people with whom it does business, or the value of the companies' franchise, its ongoing relationships with the people or organizations to which it sells.

Value of relationships that a firm builds with its customers, and which is reflected in their loyalty to the firm and/or its products. It is one of the three kinds of intellectual capital of a firm (the other two are human capital and structural capital) that are not reflected in a balance sheet.


What is structural capital?
Structral capital refers to the legal rights to ownership: technologies, inventions, data, publications, and processes that can be patented, copyrighted, or shielded by trade to secret laws. Moreover, Strategy and culture, structures and systems, organizational routines and procedures -- assets that are often far more extensive and valuable than the codified ones.

What is human capital?
Human capital is the collection of capabilities of the individuals required to provide solutions to customers.

The set of skills which an employee acquires on the job, through training and experience, and which increase that employee's value in the marketplace.

Three areas of intellectual capital -- Human capital, Structural capital and customer capital
Human capital
can be said to include knowledge, skills and experience of employee which obtained through job and experience, etc. In a broader context, human capital could also include ethics, personality and behavioural traits. Whilst we are invariably born with these attributes, we are also required to develop them, thus increasing human capital. By definiton, human resources are finite, while capital can be infinite, as it can be used to produce more and more capital.
Structural capital is the embodiment, empowerment and supportive infrastructure of human capital. It provides the environment that encourages individuals to invest their human capital to create and leverage its knowledge. It encompasses the organizational capacity, including the physical systems used to transmit and store intellectual material. It is all of an organization's organizational capital, innovation capital and process capital.
Customer capital is the value employees create for their company and their ideas by getting real customers to buy the company's products or services. Company can get a good reputation from its loyal and valued customers, so as it can build up a good image and enhance its competitive advantages in the marketplace.
Reference: http://www.businessdictionary.com/definition/customer-capital.html

How to increase customer capital?
Company can try to create a partnership with its customers, where they feel they have valid input and that their participation in all interactions are appreciated. Once the company gets to this level, the loyalty to the company from that customer will grow. Have regular review meetings, where representatives from company and the customer's company are included. The more relationships created, department to departement, company to company that exist, again, the greater loyalty. Moreover, customers will remain loyal to the company as long as it is honest with them. Some companies look for customer capital consulting firm to help them to increase customer capital by implementing customer relationship management (CRM).

How to develop human capital?
Here are a few questions to help organization identify its strengths and weaknesses and to develop a human capital management system:

How do you source candidates?
How do you screen them?
Are you clear about the criteria for success for the positions you are seeking to fill?
Do you have an interview template so you can compare interviews with different candidates?
Do you have thoughtful interview questions prepared so you can probe for the right information?
Are members of your search committee clear about all of the above?
Do you have a good and consistent reference checking process?

You have gone through the nerve wracking process and have made the hire. Now what do you do?
Do you dump a pile of documents on the new person’s desk and tell them to get on with it?
Do you have a welcoming process for the first day/week/month?
Do you have an assimilation process so new hires can get up to speed quickly and efficiently?
Do you offer on-boarding coaching to senior recruits to ensure alignment between leadership teams and the board?

Do you offer any training to enhance job skills or workplace effectiveness?
What kind of training do you offer?
Is it effective? What evidence do you have of its effectiveness?
Is there training you have not yet considered but would be worthwhile to offer?
Are you sure you have people in the right roles? Could you cross-train them to take on additional roles that would play to their strengths? Could you move anyone to a better suited role rather than spend money on unnecessary training?

Executive Development
What support is there to ensure executives and leaders are doing the best possible job?
How do you ensure effective communication between different constituencies – executive leadership, the board, divisional leaders, staff, volunteers, etc?
How do you deal with conflict?
How do you create and execute organizational strategy?
How well do you create and execute organizational strategy?
To what extent do you hold individuals accountable for accomplishing the mission and delivering positive outcomes?

Performance Management
Do you have a performance management system that is perceived as open, transparent and fair?
Do managers know how to deliver constructive feedback to staff?
Do managers know how to receive feedback from staff?
Do you have a culture that encourages people to take responsibility and learn from mistakes, or are they intimidated by fear of failure?

Strategic Career Management
To what extent do you encourage discussion about career paths and career progression?
Do you have a mentoring system in place?
Are people able to speak about their career aspirations in an open manner?

Intellectual capital consists of three major areas - human capital, structural capital and customer capital. But, how to managing intellectual capital? Don't worry, because there are several principles for managing intellectual capital:
(1) To create usable human capital, company needs to foster teamwork, communities of practice and other soical forms of learning.
(2) Companies don't own human and customer capital. Only by recognising the shared nature of these assets can a company manage and profit from them.
(3) Organizational wealth is created around skills and talents that are proprietary and scarce. Companies must recognise that people with these talents are assets to invest in.
(4) Structural assets are the easiest to manage but those that customers care least about.
(5) Move from amassing knowledge 'just in case' to having information that customers need ready to hand.
(6) Information and knowledge can substittue for expensive physical and financial assets.
(7) Knowledge work is customer work.
(8) Every company should re-analyse its own industry to see what information is most crucial.
(9) Human, structural and customer capital work together. It is not enough to invest in people, systems and customers separately.
Reference: http://en.wikipedia.org/wiki/Intellectual_capital

The Cultural Side of KM
Knowledge Management Culture

A common element in many KM research frameworks and models is organizational culture. For the most part, it is assumed that technology plays a key role in the processes involved in KM. A broader view looks at KM requirements from three perspectives: a) Information-based; b) technology-based; and c) culture-based. The last of these perspectives highlights the importance of organizational culture in the KM process. Not all KM processes require high investment in technology. More importantly, successful use of the technology is often dependent on the incorporation of KM behavior into the organizational culture.


Culture, which is mainly shaped by people, is a basic building block to knowledge management and is a powerful force. It must be considered when introducing a knowledge management programme because it affects how the enterprise accepts and fosters that programme. The ultimate success of knowledge management depends on a supportive culture. If knowledge management is to be an integrated aspect of how work gets done in an enterprise, it must become an integrated aspect of the culture.

Usually new programmes are overlaid onto the culture, that is, typically introduced and added onto the existing culture, instead of being integrated into it. In other words, the culture is neither examined nor altered as to its 'fit'. The beliefs, values, systems, policies and management styles in place within the culture will work against the knowledge management overlay.

Organizational Culture on Knowledge Management

Source: http://www.ehealthstrategies.com/files/KM_culture.pdf D Leidner

Cultural barriesrs in knowledge mangagement (KM)
In general, culture is often seen as the major inhibitor of effective knowledge management. Common cultural barriers exist in knowledge management due to diversity of human reactions. Cultural barriers can split into two areas - individual and soical barriers.
As the main individual barriers we can identify:
(1) loss of power - by providing knowledge (about customers, competitors, suppliers, procedures, methods, processes, etc.) to the employee the exclusivity of influence is reduced, which can ensure some certainty of work or respect. "Knowledge is the power";
(2) fear from revelation - by providing knowledge we show that this knowledge has a value. If this assessment is not shared by other repository users, embarrassment may happen;
(3) uncertainty - especially younger and less experienced employees can feel uncertainty, because they cannot judge if their working results represent valuable knowledge for others. It may be difficult for junior staff to estimate the worth of their knowledge for other members of staff or the company as a whole;
(4) illusion of reward deprivation - some employees see in knowledge sharing the way how they can lose their work rewards, because they give their knowledge sharing is understood as additional work. Therefore some employees expect "something more";
(5) single culture elements - employees are not able to concretely name basic corporate values, needs and goals although they know a lot about the company;
(6) difference between awareness and knowledge - some employees have mostly only awareness of the problem, but they do not know anything more. It affects that they do not want to "hear again things they already know";
(7) conflict of motives - separate part of the articlae is dedicated to this barrier.

To the main social barriers we can assign:
(1) language - in some organizations the language used in one department is unclear for others. So the main rules of one language should be respected. In frame of individuals there can be better understandable tacit knowledge, mental models, opinions, beliefs, etc.;
(2) conflict avoidance - sometimes, we can recognize effor to avoid changes and do not risk too much. That affect new knowledge and approaches containing new ideas or innovative points of view can be lost;
(3) bureaucracy and hierarchy - high level of bureaucracy and administrative institution type often use procedures and approaches worsening knowledge sharing;
(4) incoherent paradigms - the difference between personal intents and paradigms of company ( values, strategy, mission and vision, etc.) makes difficulty in expressing and justifying opinions, which do not fit with the riling paradigms of company;
(5) understimating of lower levels - in most cases top management pursue "traditional" knowledge management based on storing of information from past with the assumption, that the future information will need to be the same. This attitude takes knowledge workers as passive information receivers only. Management gathers the content of organizational memory as a final product in design time and than disseminate this content. This is a typical "top-down" approach. "Creative" approach to knowledge management, this approcach takes knowledge workers as experts solving new and weakly structured problems during daily work.
(6) bad appraisal of the co-worker knowledge base - communication plays an important role in knowledge sharing. If the sender is not able to estimate the state and size of receiver's knowledge base, knowledge sharing does not have to be fecund even when the commincation process happened;
(7) emotions - emotions affect upon the willingness of employees to share knowledge with anybody. It is not easy to compel two employees to share knowledge with unfriendly and spiteful relationship;
(8) pseudoinnovator - pseudoinnovators are people who play up their opinions as "necessary" improvements of others ideas, pieces of knowledge or proposals, to stress their importance and dispensability.

Value, Usage, Sharing, Social and Ecological Issues of Intellectual Capital

Intellectual capital refers to the intellectual assets from a strategic and global perspective. We argue that, from a strategic perspec-tive, intellectual capital is used to create and apply knowledge to enhance firm value. Value creation is at the heart of strategic management and the rationale of intellectual capital is its ability to cre-ate value. Thus, intellectual capital and strategy are intricately woven. In this sense, a perspective based on the intellectual capital provides a more holistic view of the firm and its value, driving and nurturing the strategy. Nevertheless, given the uniqueness of each firm’s configuration of knowl-edge characteristics and the idiosyncrasies of the firm’s history, it does suggest that there are a va-riety of routes to success.

What is the power of Intangibles Management?

Intangibles Management helps Obama. One of the stories behind the historic election of Barack Obama yesterday is his use of the internet to reach out to a broad group of campaign workers and donors. Here’s a post from Wired that explains how he did it. The significance of this new kind of grassroots politics, this new kind of relationship capital, carries lessons that are applicable beyond politics. While the final data is not yet available, Obama appears to have opened a new channel in politics that brings the process closer to the people. He was even with McCain on fundraising from traditional large contributors but the grassroots funding gave him an edge that he exploited aggressively.
The intellectual capital movement recognizes relationship capital as one of the three key building blocks of the knowledge advantage in organizations, together with human and structural capital. Beyond fundraising, Obama’s strong network also gave him access to deep human capital in both numbers and dedication. The campaign made it all work by creating repeatable models to organize community by community, a great example of the power of structural capital. Obama understands the power of intangibles management.


The diagram above shows the relationships between the tangible elements of intellectual property and the three forms of intellectual capital (the organizational intangible assets) - human, structural and customers capital.
Reference: http://www.ascilite.org.au/ajet/ajet19/williamson.html

Part II – Computer Ethics

What is Computer Ethics ?
Computer Ethics is a branch of practical philosophy which deals with how computing professionals should make decisions regarding professional and social conduct. Since the 1990s the field has started being integrated into professional development programs in academic settings. The conceptual foundations of computer ethics are investigated by information ethics, a branch of philosophical ethics established by Luciano Floridi. Computer ethics is a very important topic in computer applications.

reference - http://en.wikipedia.org/wiki/Computer_ethics


The common definitions is: “Computer Ethics is the analysis of the nature and social impact of information and communication technology, and the corresponding formulation and justification of policies for the ethical use of such technology”.

“computer ethics” has been used to refer to applications by professional philosophers of traditional Western theories like utilitarianism, Kantianism, or virtue ethics, to ethical cases that significantly involve computers and computer networks.
“Computer ethics” also has been used to refer to a kind of professional ethics in which computer professionals apply codes of ethics and standards of good practice within their profession. In addition, other more specific names, like “cyberethics” and
“Internet ethics”, have been used to refer to aspects of computer ethics associated with the Internet.

Computer Ethics is a standard of which computing professionals should deal with and making decisions regarding to professional and social conduct. It is generally about "right or wrong", "good or bad", "acceptable or unacceptable". Ethics is concerned with individual character, what it means to be a good person, and social rules, what governs and limits our conduct (right or wrong), which we call morality.

Source: http://en.wikipedia.org/wiki/Computer_ethics
Dr. Wanbil William LEE (Computer Professional of in Society)

Computer Ethics
Ethics is concerned value or goodness of the result. In computer ethics, we can separate into 5 parts, Privacy, Intellectual Property Rights, Liabilities, Free Speech and Professional Conduct and Accountability.

We may face some problem, when we necessary to balance the ethics. In Privacy, we need provide privacy on users’ data. But we need to break that in sometimes. When company necessary to get the information from some colleagues, but they don’t want to release the data.

Other article of Computer Ethics http://plato.stanford.edu/entries/ethics-computer/


Computer ethics has two parts:
(1) the analysis of the nature and social impact of computer technology;
(2) the corresponding formulation and justification of policies for the ethical use of such technology.

By individual, a user has a responsible to protect the information privacy. We SHOULD NOT
(1) use a computer to harm the public;
(2) use a computer to steal others' private information;
(3) use a computer to get other online resources under unauthorization;
(4) peep at privacy information of other people, business and etc.

Information Privacy

Information privacy is the relationship between collection and dissemination of data, technology, the public expectation of privacy, and the legal and political issues surrounding them.

Privacy concerns exist wherever personally identifiable information is collected and stored - in digital form or otherwise. Improper or non-existent disclosure control can be the root cause for privacy issues. Data privacy issues can arise in response to information from a wide range of sources.

For example, Healthcare records, Criminal justice investigations and proceedings, Financial transactions, Biological traits, Ethnicity, etc.

The challenge in data privacy is to share data while protecting personally identifiable information. The fields of data security and information security design and utilize software, hardware and human resources to address this issue.

Internet privacy consists of privacy over the media of the Internet, it can control who can access that information, control what information one reveals about oneself over the Internet.

There is some of the risks on the internet privacy may concerned:

Cookie: cookie consists of a piece of information stored on a user's computer, user always don't know where the cookie store, therefore sometimes use for user-tracking. Anti-spyware programs often report Web advertisers HTTP cookie, the small text files that track browsing activity, as spyware. While they are not always inherently malicious, many users object to third parties using space on their personal computers for their business purposes, and many anti-spyware programs offer to remove them.

Photographs or video on the Internet: most of the mobile phone support cameras to take photo or video and post it to the internet

Spyware: is a type of malware that is installed on computers and collects information about users without their knowledge. The presence of spyware is typically hidden from the user. Typically, spyware is secretly installed on the user's personal computer. Sometimes, however, spywares such as keyloggers are installed by the owner of a shared, corporate, or public computer on purpose in order to secretly monitor other users.

Phishing: masquerading as a trustworthy entity in an electronic communication to attempting to acquire sensitive information such as usernames, passwords and credit card details. The act of sending an e-mail to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft. The e-mail directs the user to visit a Web site where they are asked to update personal information, such as passwords and credit card, social security, and bank account numbers, that the legitimate organization already has. The Web site, however, is bogus and set up only to steal the user’s information.

Data logging: Many programs and operating systems are set up to perform data logging of usage. This may include recording times when the computer is in use, or which web sites are visited. If a third party has sufficient access to the computer, legitimately or not, the user's privacy may be compromised. This could be avoided by disabling logging, or by clearing logs regularly.
ISPs: Consumers obtain Internet access through an Internet Service Provider (ISP). All Internet data to and from the consumer must pass through the consumer's ISP. Given this, any ISP has the capability to observe everything about the consumer's (unencrypted) Internet.


1. Privacy is the “zone of inaccessibility” which defines the extent to which you can control who has access. This means that you have privacy in this zone, and entering this zone without your permission violates your privacy.

2. Privacy is the “right to be left alone” which means privacy can be “being let alone” or “being free from intrusion”, or “physically being let alone”, or “being free from intrusion into your physical proximity”.

Information privacy refers to privacy which is considered to be “control over the flow of one’s personal information, including the transfer and exchange of that information”. This being the case because privacy is viewed as our ability to restrict access to and control the flow of our personal information which is collected and stored. It is then possible for us to determine “who should have access to our personal information” and “the extent we can control the ways in which information about us can be collected, stored, and utilized”.

Source: Professor WW Lee


Things can be done to increase information privacy protection

By Computer professionals
Install anti-virus, firewall in personal computer.
E-mail encryption for protect email information.
Do install unknown software to prevent spyware and virus.
Avoid share cookies to internet.

By technology
When system information may transfer through the internet, encrypt information pervent.
Encrypt company critical information in database.
Perform access rights to access system for everyone.
Focus user chanage password in the system regularly.
Physically prohibit user enter server room.

In institutions
Not allow unapproval staff to send email to internet.
Not allow staff copy company information to flash memory and take outside company.

By Individuals
Do not disclose personal information to other.
Change account password regularly.
Do not enter personal password or access criticacl information in the public computer.
Like cafe, library.
Don't open unknown email to prevent spyware
Don't download unknown software.
[g3- 2566]

By individual, the user can take personal actions to enhance the information privacy online, such as:
(1) Learn how to tell if a website is secure - When you provide your credit card account number to shopping site, you want to be sure that the transmission is secure. You can look for the unbroken padlock at the bottom right of the screen. You can right-click on the padlock to make sure the security certificate is up-to-date. If it is not, you should not order from the website.
(2) Learn how to secure your personal computer - install firewalls, anti-virus programs and anti-spyware prgrams to protect your personal computer.
(3) Start reading privacy policies - get in the habit of reading a website's privacy policy. The policy should alert you to how your information is shared and sold. Furthermore, the policy outlines what rights you have.
(4) Enchance your alert for protect your own information - get in the hablit of log-out an email account, bank account and etc. after checking your personal information. Remember to set the permissons for your msn messenger, blog, facebook and etc. to prevent other people to get your personal information under unauthorization. Moreover, do not open and browse any unknown webpages, it is very dangerous, because these webpages might contain virus.

Where are the business ethicists when you need them?

The transition is from the industrial age to the information age. The ethical issues in business of the industrial age are those with which we are familiar. The development of the information age came about without conscious direction. As technology developed, the transition came along as a handmaiden. One consequence is that businesses and society as a whole are following the technological imperative - what can be developed is developed and implemented. Because the transition to the information age is currently taking place, many of the ethical issues have not clearly jelled. The task of the business ethicist in this instance is to at least keep up with the technological and social developments and identify problems and potential problems before they cause great harm, and before they become embedded ways of doing business that are difficult to change.

Business ethicists and society in general could wait for ethical problems and injustices of the information age to arise, and do analysis after the fact. Far preferable, however, is to anticipate injustice, prevent it from appearing, and form structures that are ethically justifiable, rather than having to undo and attempt to reform structures that are unfair, socially disruptive, and harmful to some of the parties. We of course cannot anticipate all the ethical issues that will arise. Experience and the empirical approach are also necessary. But we can anticipate more than we might expect, and I suggest that now is the time to start this analysis as we enter the information age. We do not need a new ethics framework, but we have to apply and possibly revise our ethical concepts and norms to fit the new environment. We need an imaginative analysis of the potential harms to people - be they in the realm of privacy, property, the new surveillance sweatshops, or other areas.

From Business Ethics and the Information Age , Dr. Richard De George

One of the earliest computer ethics topics to arouse public interest was privacy. For example, in the mid-1960s the American government already had created large databases of information about private citizens (census data, tax records, military service records, welfare records, and so on). In the US Congress, bills were introduced to assign a personal identification number to every citizen and then gather all the government's data about each citizen under the corresponding ID number. A public outcry about “big-brother government” caused Congress to scrap this plan and led the US President to appoint committees to recommend privacy legislation. In the early 1970s, major computer privacy laws were passed in the USA. Ever since then, computer-threatened privacy has remained as a topic of public concern. The ease and efficiency with which computers and computer networks can be used to gather, store, search, compare, retrieve and share personal information make computer technology especially threatening to anyone who wishes to keep various kinds of “sensitive” information (e.g., medical records) out of the public domain or out of the hands of those who are perceived as potential threats. During the past decade, commercialization and rapid growth of the internet; the rise of the world-wide-web; increasing “user-friendliness” and processing power of computers; and decreasing costs of computer technology have led to new privacy issues, such as data-mining, data matching, recording of “click trails” on the web, and so on [see Tavani, 1999].
The variety of privacy-related issues generated by computer technology has led philosophers and other thinkers to re-examine the concept of privacy itself. Since the mid-1960s, for example, a number of scholars have elaborated a theory of privacy defined as “control over personal information” (see, for example, [Westin, 1967], [Miller, 1971], [Fried, 1984] and [Elgesem, 1996]). On the other hand, philosophers Moor and Tavani have argued that control of personal information is insufficient to establish or protect privacy, and “the concept of privacy itself is best defined in terms of restricted access, not control” [Tavani and Moor, 2001] (see also [Moor, 1997]). In addition, Nissenbaum has argued that there is even a sense of privacy in public spaces, or circumstances “other than the intimate.” An adequate definition of privacy, therefore, must take account of “privacy in public” [Nissenbaum, 1998]. As computer technology rapidly advances — creating ever new possibilities for compiling, storing, accessing and analyzing information — philosophical debates about the meaning of “privacy” will likely continue (see also [Introna, 1997]).
Questions of anonymity on the internet are sometimes discussed in the same context with questions of privacy and the internet, because anonymity can provide many of the same benefits as privacy. For example, if someone is using the internet to obtain medical or psychological counseling, or to discuss sensitive topics (for example, AIDS, abortion, gay rights, venereal disease, political dissent), anonymity can afford protection similar to that of privacy. Similarly, both anonymity and privacy on the internet can be helpful in preserving human values such as security, mental health, self-fulfillment and peace of mind. Unfortunately, privacy and anonymity also can be exploited to facilitate unwanted and undesirable computer-aided activities in cyberspace, such as money laundering, drug trading, terrorism, or preying upon the vulnerable (see [Marx, 2001] and [Nissenbaum, 1999]).

The video above shows that how the computer hackers to obtain passwords and sensitive information. This video brings us an important alert - we need to do something to protect our information privacy. Otherwise, we will be harmed by computer hackers.
Reference: http://www.youtube.com/watch?v=gX2Pf5F03hY&feature=PlayList&p=293BD515D1B1EF34&playnext=1&playnext_from=PL&index=1

Intellectual Property rights

Intellectual Property (IP) refers to any information or knowledge that has commercial value , which can be incorporated in tangible objects at the same time in an unlimited number of copies at different locations anywhere in the world. The property is not in those copies but in the information or knowledge reflected in them. Intellectual property rights are also characterized by certain limitations, such as limited duration in the case of copyright and patents.
Intellectual Property Rights allow the creator or owner to benefit from his or her own work or investment. Generally it have laws to protect intellectual property. First, to give statutory expression to the moral and economic rights of creators in their creations and to the rights of the public in accessing those creations. The second is to promote creativity and encourage fair trade, which would contribute to economic and social development. The following list of subject matter are protected by intellectual property rights:
  • literary, artistic and scientific works
  • performances of performing artists, phonograms, and broadcasts
  • inventions in all fields of human endeavor
  • scientific discoveries
  • industrial designs
  • trademarks, service marks, and commercial names and designations
  • protection against unfair competition
  • all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields

Four traditional types of legal intellectual property protection

Copyright is a form of intellectual property that gives the author of an original work exclusive right for a certain time period in relation to that work. Copyright protect the expression of an idea, not the idea itself.
Five principals of copyright:
  1. Reproduce the copyrighted work
  2. Distribute copies of the work to the public
  3. Display copies of the work in public
  4. Perform the work in public
  5. Produce new works derived from the copyrighted work

Patents exist for encourage invent and create of new technologies. Patent holder can prevent others from making, using or selling the invention for the life time of the patent. Protect inventor rights of manufacture and sale of the technologies. To satisfy the requirements of patent, the technology and inventive creation must meet the following criteria:
  1. It must be capable of industrial application
  2. It must be new and never been made public
  3. It must involve an inventive step

A trademark is a word, sign, symbol, design or indicator used by an individual, business organization or other legal entity to identify or distinguish that the products or services to consumers in the marketplace.
A trademark is designated by the following symbols:
TM - Unregistered trademark mark used to promote or brand goods
SM - Unregistered service mark used to promote or brand services
® - Registered trademark

Trade secret
A trade secret is a confidential piece of Intellectual Property that provides company with a competitive advantage. Trade secret is widely recognized by governments around the world.
A trade secret is information that:
  1. Not generally known to the public
  2. Confers some sort of economic benefit on its holder
  3. Subject of reasonable efforts to maintain its secret

Copyright is a legal term describing the economic rights given to creators of literary and artistic works, including the right to reproduce the work, to make copies and to perform or display the work publicly. Copyrights offer essentially the only protection for music, films, novels, poems, architecture and other works of cultural value. Computer programs and sound recordings are also protected. Copyriht protects arrangements of facts, but it does not extend to intangible areas, cover newly collected facts, new ideas and processes, as such.
Reference: http://en.wikipedia.org/wiki/Copyright

Patent is a contract between society and individual inventor. Under the terms of this social contract, the inventors is given the exclusive right to prevent others from making, using and selling a patented invention for a fixed period of time (in most countries, for up to 20 years). But, it is not easy to obtain a patent, due to the products or technologies should be examined by experts. This process often takes time and expensive.
Reference: http://en.wikipedia.org/wiki/Patent

Trade secrets are any information that may be used in the operation of a business and that is sufficiently valuable to afford an actual or potential economic advantage is considered a trade secret. Different from patents, trade secrets are protected for a theoretically unlimited period of time and without any procedural formalities. However, it has a risk of escape and protection is not free.
Reference: http://en.wikipedia.org/wiki/Trade_secret

Trademarks are commercial source indicators, distinctive signs that identify certain products or services produced or provided by a specific person or company. Throughout most of the world, trademarks must be registered to be enforceable and registrations must be renewed. Yet, while copyrights and patents eventually expire, names of companies that treat customers well become invreasingly valuable over time. If trademark rights were to expire, consumers would be collectively harmed as much as owners.
Reference: http://en.wikipedia.org/wiki/Trademark

Reference: http://www.jiscdigitalmedia.ac.uk/images/ipr.gif

Intellectual property is important to our daily lives, it is the name commonly given to a group of separate intangible property rights. These include trademarks, patents, copyright, designs rights, performers rights and database rights, etc.

One of the more controversial areas of computer ethics concerns the intellectual property rights connected with software ownership. Some people, like Richard Stallman who started the Free Software Foundation, believe that software ownership should not be allowed at all. He claims tat all information should be free, and all programs should be available for copying studying and modifying by anyone who wishes to do so. Others argue that software companies or programmers would not invest weeks and months of work and significant funds in the development of software if they could not get the investment back in the form of license fees or sales. Today’s software industry is a multibillion dollar part of the economy; and software companies claim to lose billions of dollars per year through illegal copying (“software piracy”). Many people think that software should be ownable, but “casual copying” of personally owned programs for one’s friends should also be permitted. The software industry claims that millions of dollars in sales are lost because of such copying. Ownership is a complex matter, since there are several different aspects of software that can be owned and three different types of ownership: copyright, trade secrets, and patents. One can own the following aspects of a program:

1. The “source code” which is written by the programmer in a high-level computer language like Java or C++
2. The “object code”, which is a machine-language translation of the source code.
3. The “algorithm”, which is the sequence of machine commands that the source code and object code represent
4. The “look and feel” of a program, which is the way the program appears on the screen and interfaces with users

Intellectual Property Rights (IPRs) are legal rights that protect creations and/or inventions resulting from intellectual activity in the industrial, scientific, literary or artistic fields. The most common IPRs include patents, copyrights, marks and trade secrets.

How to buy someone’s trademark?

Rights to a trademark can be sold just like other forms of property. When the rights to a trademark are sold, this is known as an assignment of the trademark - the person who is selling the trademark is known as the “assignor” and the purchaser is known as the “assignee.” To purchase someone else’s trademark, you should obviously contact the owner. If the mark you want to purchase is registered with a state agency or with the Patent and Trademark Office, you can search the relevant registration records to find the trademark’s owner. Once you have contacted the trademark’s owner, you should negotiate the assignment price.

However, this negotiation must include more than just an assignment of the trademark – the assignor must also assign the trademark’s underlying goodwill. For other forms of intellectual property, such as patents, the assignment of rights is a very straightforward sale. However, for the assignment of trademark rights to be valid and enforceable, the assignor must not just assign the trademark itself - he must also transfer the goodwill (the value and name recognition) associated with that mark. Most courts have interpreted this as requiring that the assignor also sell its related underlying assets, to ensure that the standards of quality remain the same (for example, a valid assignment might include the assignor selling the equipment it uses for making the related goods that are sold with the trademark, or the details of how to make those goods). What should specifically be included in a trademark assignment to meet this requirement will vary on a case-by-case basis. Where a trademark is sold/assigned without the underlying goodwill, this is known as an “in gross assignment,” and it is not considered valid. In fact, the trademark will be deemed abandoned and neither you nor the assignor will have any rights in the mark.

Finally, if the assigned trademark is registered with the Patent and Trademark Office, you should also record the eventual assignment with the Patent and Trademark Office so that the registration records are properly updated.

Intellectual Property
In the most general sense, encompasses creations of the human intellect (hence the term itself) and their protection, usually by copyright. This brings us to the purpose of the WIPO (World Intellectual Property Organization). It is internationally responsible for both the protection of intellectual property (by means of cooperation among its member nations) and the legal and administrative aspects of it. To this end, it administers various treaties, all which attempt to better the protection of intellectual property.
In the most general sense, encompasses creations of the human intellect (hence the term itself) and their protection, usually by copyright. This brings us to the purpose of the WIPO (World Intellectual Property Organization). It is internationally responsible for both the protection of intellectual property (by means of cooperation among its member nations) and the legal and administrative aspects of it. To this end, it administers various treaties, all which attempt to better the protection of intellectual property.

Intellectual property (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.

Intellectual property is divided into two categories: Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.

Why is intellectual property protection important?
Protection of intellectual property rights protects creativity. The efforts of writers, artists, designers, software programmers, inventors and other talents need to be protected so as in order to create an environment where creativity can flourish and hard work can be rewarded. Moreover, almost all developed countries (such as USA, Japan and Holland, etc.) have enacted laws and legistration to protect their investors and assured them of a free and fair environment in which to do business. Why do these countries protect intellectual property? Because they knew that the intellectual property protection can promote the enonomy to grow, drove the technological innovation and attracts the investment, thus creates the opportunity of employment for their citizen.

Legal jurisdiction
Laws are written for particular jurisdictions with clear geographic boundaries, so how do those laws apply in cyberspace, which has no geographic boundaries?
Faced with the inability to control the flow of electrons across physical boundaries, some authorities strive to impose their boundaries on cyberspace
Legal and ‘commercial’

Internationally, the United Nations Commission on International Trade Law has developed a model law that supports the commercial use of international contracts in electronic commerce


Standards for Internet Jurisdiction

The Internet is an interstate and international medium. But does operating a Web Site mean that the operator is subject to personal jurisdiction in courts wherever the Site is accessible? The answer obviously is no. This outline describes the types of activity that likely will permit a court to exercise personal jurisdiction over an Internet actor, consistent with the due process clause of the United States Constitution.

The Evolving Test for Jurisdiction

Interactive Use v. Passive Use

Although no bright-line test exists, most courts have applied an "interactive-passive" distinction when determining personal jurisdiction over someone operating a Web Site. Generally, courts have conferred personal jurisdiction in cases where "interactive" uses of the Internet have taken place within the state. Interactive contact encompasses two-way online communication which fosters an ongoing business relationship, while "passive" contacts are those that simply make information available to interested viewers. A Web Site can be characterized as interactive if business transactions can be conducted over the Internet or if information can be exchanged with users for the purpose of soliciting business. In making an "interactive vs. passive" determination, the greater the commercial nature and level of interactivity associated with the Site, the more likely it is that the Web Site operator is "purposefully availing itself" of the forum state's jurisdiction.
Courts generally have declined to assert personal jurisdiction solely on the basis of Web Site advertising. However, courts have exercised jurisdiction over Web Site operation where additional and more active contacts with the forum took place, such as Internet sales to the forum residents, conducting business in the forum state through numerous contacts, or entering into specific dealings with forum residents.

From Christopher Wolf of Proskauer Rose LLP

Online contracting
Contract law looks for evidence that the parties have mutually assented to the terms of a particular set of obligations before it will impose those obligations on them
In e-business, evidence of acceptance of a contract can be a simple click on a button saying “I Accept” or “I Agree.”

A contract is a legally binding agreement between two or more people or organisations, online contract is a contract that allow customer accept the traditional contract online.

Online contracting includes the traditional elements drafting but with a new twist. It is more likely that the closing of an E-Commerce deal will not be the result of a handshake, but will be in the exchange of electronic keys that have been authenticated by an international authentication service.

If you allow customers to place orders online, you should ensure that the terms and conditions of the contract are set out on the website and can be downloaded.


What is online contracting?
Online commerce requires a new take on contracts. Online contracting includes the traditional elements drafting but with a new twist. It is more likely that the closing of an E-Commerce deal will not be the result of a handshake, but will be in the exchange of electronic keys that have been authenticated by an international authentication service. Cybernotaries will verify digital signatures, and impound accounts that reside outside of the jurisdiction of the parties may be employed to guarantee performance.

Formation of online contracts

If you allow customers to place orders online, you should ensure that the terms and conditions of the contract are set out on the website and can be downloaded. Even where the website is simply used as an advertising tool, it is still advisable to clearly set out your terms and conditions.

Contracts that are formed via the internet are legally binding and enforceable providing that the following conditions are satisfied:
  • offer - one party must contract with the other, eg offer to buy goods
  • acceptance - the other party must expressly accept the offer
  • intention to create legal relations - both parties to the contract must intend the contract to be legally binding
  • consideration - in England and Northern Ireland there should be some consideration being exchanged between the parties, eg money paid for goods

Generally an advertisement on a website will not constitute a formal offer to contract (although care should still be taken when designing an advertisement). A contract would be formed once a customer makes an offer by placing an order and the supplier accepts this offer.

The terms and conditions about when the contract is formed should be clear - for example when the supplier sends back a confirmation email. This will help to avoid situations where you are unable to meet the customer's expectations for any reason, if commercial circumstances change.

However, automatically generated confirmations of orders can potentially cause confusion about when the contract is formed. So you should ensure that you word them in such a way that they are not legally an acceptance of a customer's offer.

Online contracting includes the traditional elements drafting but with a new twist. It is more likely that the closing of an E-Commerce deal will not be the result of a handshake, but will be in the exchange of electronic keys that have been authenticated by an international authentication service. Cybernotaries will verify digital signatures, and impound accounts that reside outside of the jurisdiction of the parties may be employed to guarantee performance. Disclaimers, licenses and warranties take on a new color when conflicts arise between U.C.C. and UNCITRAL or other model commercial acts. The student in this course will cover the subject of contracts in the digital age. Authentication of parties, forum, statute of frauds, licensing, and consumer protection topics will be taught with emphasis on electronic commerce
Reference: http://www.llmprogram.org/onlinecontracting1.htm

Online contracting is the buyer and seller may not need to meet, but may enter their sale contract remotely in internet.

In general, online contracting has four types:
(1) the online ordering of software, books, parts and other products with shipment by common carrier;
(2) the online ordering of digitally formatted products, such as computer software and sound recordings followed by transmission of the products to the customer;
(3) the online ordering of, followed by access to, databases, encyclopedias and other similar services;
(4) any other agreements which are negotiated or confirmed online, including real estate purchases, development agreements and joint venture agreements.
In e-business, the relationship between buyers and sellers are made by online contracting, it is important to note that online contracts are aslo subject to the same laws as contract made off-line.
Reference: http://www.weblaw.co.uk/articles/how-to-contract-online/

Online contracting which are easily made, are usually valid on a smaller scale for a period of one to three months, while on a larger scale can last about five years. The emerge of the online contracting is related to the ever-evolving internet, general rules like length of validity have many exceptions. All cases are evaluated on their own merits, and those merits are defined by the facts presented in each instance. It is up to the owner of the site to do what it can to guarantee enforceability of its contracts.

Online contracting tool

Source: http://en.wikipedia.org/wiki/Contract