4th Patents as a Competitive Strategy CourseJune 06 & 07, 2011

Aligning IP with Corporate Strategy and Cultivating

Corporate Patent Practices by

Naim KhanIP Manager, Primal Fusion Inc.

Screening Corporate Objectives: Defining and Incorporating IP Objectives

Every Contemporary Business Strategy has IP in it. Here is the reason why.

• A business strategy is designed to avoid risks and reap rewards

• An IP strategy manages risks and rewards for a business• An IP strategy does not automatically mean filing of a

patent• You need freedom to operate to launch your products or

services or even just to adopt a name• You should not take a risk without having at least a basic

freedom to operate knowledge• Without IP protection a business will not be able to

maintain its competitive advantage

IP Strategy

• An IP strategy largely interacts with a corporate strategy with two essential interlinked components

• First component: Choice of how to practice Freedom to Operate

• Second component: Creation and Management of Ideas

Incorporating Freedom to Operate

• "Freedom to operate" is usually used to mean determining whether a particular action, such as testing or commercializing a product, can be done without infringing valid intellectual property rights of others

Incorporating Freedom to Operate

• What choices do you have?• Freedom to operate gives businesses the latitude to execute their

product or service strategy without the fear of competition• An open freedom to operate: Possible in mature technologies; High

legal and financial risk in new technologies and low profitability• An exclusive freedom to operate: File patent, acquire patent or

acquire an exclusive license; Low risk and potentially high reward• A shared freedom to operate: Acquire a non-exclusive license; Low

risk and medium to low reward

• Generate freedom to operate: License your patented technology; Low risk and high to low reward

The Most Important Resource of a Company

• Ideas• Ideas lead to inventions• Ideas are needed for competitive advantage• Ideas can always be generated• If you buy a company stock you are likely to buy it for the

innovation and technology the company owns• The ownership gives the company freedom to operate and

adds value to a company• Ideas no longer come only from the research an

development activity• Ideas can be related to any valued activity

• Critical aspects of in-house idea creation• Ideas come from everywhere• Incentives for idea generation• Monitor areas of idea generation• IP in contemporary technologies rely heavily

on connecting ideas as absolute originality is hard to come by

Creation of Ideas

• Critical aspects of in-house idea creation• Ideas come from everywhere• Ideas and therefore inventions come as a whole not in

pieces• Incentives for idea generation• Monitor areas of idea generation• IP in contemporary technologies relies heavily on

connecting ideas as absolute originality is hard to come by

Creation of Ideas

• Ideas come from everywhere• There should be company wide participation to come with an idea

be it R&D or any other department• Pump up your idea generation base with presentations or talks by

influential speakers• Demonstrate how idea generation is helping the company in its

profitability• Initially treat all ideas on equal footing• Expose your in-house audience to your general technology base • Out source innovation: the IP story is now world wide and it may be

likely that the your company may not keep pace with innovations in your technology space

Creation of Ideas

• Ideas and therefore inventions come as a whole not in pieces

• Contemporary technologies are connected at the very least as core technologies and associated technologies

• Idea in a core technology may likely be enabled by aspects of core technology

• Develop expertise that can at least sense this connection of technologies to concert an idea into an enabled invention

• Ideas and therefore subsequent inventions may likely spillover in associated technologies

• Do not discard non core inventions and develop a strategy to leverage this spillover

Creation of Ideas

• Incentives for idea generation • Treat first contact with an idea generation effort as a

triage• Never disappoint someone with an idea• Send back the idea for improvement by citing

enabling aspects and connections to other associated areas of application

• Allways give incentives to at least enabling ideas at some level

Creation of Ideas

• Monitor areas of idea generation• Monitor if enough ideas are not being generated in-

house for critical areas to have a competitive advantage

• Demonstrate in-house audience how to strategically think about idea generation for IP in the technology of interest (they are always willing to learn)

• At least have an IP training session for all technology managers and R&D staff about critical IP thinking and get feedback to incorporate in future sessions

Creation of Ideas

• IP in contemporary technologies relies heavily on connecting ideas as absolute originality is hard to come by

• Create your core technology map overlaid with at least two layers of associated technologies

• Examine the IP and product landscape• Examine the idea space you have generated and the idea

space you need• Train IP evaluators to see the interconnectedness of

technologies and same for patents in the landscape• These IP evaluators will in turn maximize your return in

converting ideas into possible patents

Management of Ideas

• Start an IP project for an idea• Recording and Documentation (Technical & Legal)• Evaluating novelty (Technical & Legal)• Evaluating completeness: Is the idea workable (Technical)• Evaluating value proposition: how the idea is connected to

your business and product strategy (Technical & Marketing and Sales)

• Validating novelty (Legal)

Management of Ideas

• Identify deliverable and alternate paths to deliverable (Technical & Legal)

• Evaluate competing technologies and competitors (Technical & Legal)

• Evaluate future modifications (Technical)• Evaluate markets: financial (Marketing and Sales)• Evaluate markets: geographical (Technical, Marketing and

Sales & Legal)

Management of Ideas

• Evaluate budget to file patent (Legal & Finance)• Determine availability of budget and track yearly budget

(Finance)• Determine your choice of freedom to operate (Executive)• You may still have to file for a patent (Legal)• If you patent, ensure that the invention is legally owned by

the company (Legal)

Outcome of Execution of IP Strategy

• Patenting activity is an outcome of a business process• Lowered cost across the board for IP activity• Justified IP spending• Informed understanding of your business, future vision and

competition• Acquire Not just Freedom to Operate but Freedom to Plan,

Execute and Reshape Vision• Intangible now feels tangible• YOUR IP IS ALIGNED TO YOUR BUSINESS GOALS

Feedback and Communication

• Management of ideas involves all departments: Legal, Technical, Marketing, Financial and Executive Management

• They are delivering their required input• Need to stress the importance of an IP project as a mission critical project• Assemble a team from all business units• Have all departments present their reports in team meetings• Present final report in a team meeting along with executive

management

Strategic Technology Map

• Life saver• Three components and many derivatives• Inventory of ideas• Global market survey• IP survey

Technology Map

• Inventory of ideas• Collect all ideas• Do not discard any idea initially• Connect ideas to existing products or services• Connect ideas to future• Invent upon ideas• See the complete picture

Strategic Technology Map

Technology Map

• Global Market Survey• Identify the ecosystem in which your company exists• Identify broad components of the ecosystem• Collect statistical and financial data to see what the market is

saying• See the underlying trends unfolding in the ecosystem• Collect information on all relevant M&A activity and with IP

details on patent evaluation, licensing and the synergy between merging companies

• Write down key questions to answer

Strategic Technology Map

Technology Map

• IP Survey• Identify competing companies• Identify their IP• Bridge their IP to their published strategy and products• Identify the risk from competition• Identify patent prior art• Identify non-patent literature• Identify key researchers and clusters• Identify relevant court decisions

Strategic Technology Map

Technology Map

• Connect all components of Technology Map• Observe the intersections• Document and Answer key questions• Present findings to upper management• Use Technology Map extensively in management of ideas

process• Update continuously• Guide Business Strategy and IP Strategy from your

observations• Shrink delay of time to market

Anticipate the Future

• IP strategy today is about carving your space in future• Do not miss the boat by not examining what is in front of you• Evaluate your ideas• Best way to see the future is to invent it