It can sometimes be hard for the average Florida resident to understand why intellectual property assets are important to business owners. After all, these are abstract things -- ideas and formulas and methods -- rather than physical resources or money. Just how valuable can they be?

To answer that question, let's take a look at what is about to happen at Eli Lilly Co. The pharmaceutical giant is poised to see its 2012 financial numbers fall in a dizzying downwards spiral because patents on some of its chief money-makers have either run out or are set to expire very soon.

Patents give companies protection from their competitors by forbidding knockoffs and copycat products, but only for a limited amount of time. Eli Lilly lost patent protection on one of its biggest sellers, the schizophrenia treatment Zyprexa, in late 2011 and will lose patent protection on another blockbuster, the depression medication Cymbalta, in early 2013. That means competitors can make their own generic versions of these medications, so Eli Lilly will likely lose market share and will have to lower its prices to stay competitive.

(Eli Lilly still has patent protection on Cialis, the insulin product Humulin and osteoporosis drug Forteo, so all is not lost.)

The loss of patent protection and, hence, the exclusive right to make certain top-selling medications is enough of a change that Eli Lilly has discussed it publicly with investors and has had to outline what it will do to absorb the changes.

Now, imagine if Eli Lilly never had that patent protection in the first place. How would it make money off its inventions? Furthermore, consider the social consequences; if it could not make money, what incentive would it have to develop new drugs and advance our war on disease? This is why many businesses jealously guard their intellectual property assets.

Source: Fox Business, "Eli Lilly Predicts Sharp Drop in Profit in 2012 as Patents Expire," Jennifer Booton, Jan. 5, 2012