New Zealand companies are lousy at intellectual property protection. We file fewer international patent applications than we did seven years ago (250 in 2013 versus 400 in 2007), and we employ fewer patent attorneys as a country than some overseas corporations do as individual companies.
Moreover, unlike countries like China or the UK, our Government gives almost no assistance to local businesses to fund their international IP ownership.
Worst of all, very few New Zealand companies actually have an IP strategy.
This matters. According to the Global Innovation Index, New Zealand is ranked 17th in the world for innovativeness, but 90th in terms of innovation efficiency. In other words, we have great ideas, but are desperately bad at turning them into profitable new businesses, taking them to the world market, and making some serious money.
The solution involves companies defending their IP – but it involves much more than that. It involves companies investing in IP advice (either in-house or external) and those IP specialists reporting directly to top level management. It involves companies seeing intellectual property as integral to the business – not an add-on – and IP teams working hand-in-hand with research & development teams.
I call it the “three Cs” IP strategy approach:
- Competitive intelligence: finding out what others are up to and what market opportunities are available. Peter Spours, former chief intellectual property officer at GPS navigation and mapping company TomTom, uses three cunning competitive intelligence tactics to block competitors.
(In case you were wondering what Tom Tom knows about all this: the company makes $1.4 billion a year, has more than 1400 patents, 900 trade mark registrations, and invests almost $250m per year (17%) in innovation.)
- Seeking out publicly-disclosed inventions (called “prior art” in the IP business) as a way of stopping competitor’ rights. This works because patents are only valid if the invention they cover is novel, that is, not known in the world before the patent application is filed. So if you can find relevant material concerning your competitors’ inventions (it might be in journal article, an archived PhD dissertation, an online publication or a previous patent) can undermine their patents.
For example, one area worth investigating stems from the fact that in the past, the US Patent Office didn’t search Japanese patents before granting a patent. So finding a pertinent Japanese patent can invalidate an approved US patent. Or, more cunningly, the threat of invalidation can be used to leverage deals.
- Buying patent rights to block other competitors.
- Brainstorming to create patent rights in a competitive space.
- Competitive edge. To compete, we need to know what gives us the edge over our competitors. This can be a brand, a better looking or better working product, or even great internal systems. And then putting into place mechanisms that protect, maintain and leverage that edge. This article discusses competitive edge in greater detail - 'Beyond book value'.
- Collaboration: leveraging deals with third parties, including:
- Buying patents to augment your own portfolios. A third of Tom Tom’s patents fall within this category.
- Licensing patents to avoid freedom-to-operate issues. This is a common strategy used in a crowded technical space. For example, most mobile phone companies license in patents from smaller players – or even just buy out the companies for their patent portfolios.
- Creating an open innovation environment to develop a market. Tech multi-national Philips uses this strategy a lot, and recently US electric car manufacturer Tesla Motors enabled “good faith” users free rein of their technology. See here for more details.
This article first appeared in Idealog.