Once again I have come back from a highly informative Intellectual Property Business Congress (IPBC).
This article is an attempt to distil some of the highly pertinent messages from global IP giants into useful tips which can assist smaller businesses compete or attract business on the world stage.
We were fortunate to hear from the CEO of Philips, Frans van Houten, and some people from his IP department.
Philips is big in the IP department with 60,000+ patents and 29,000+ trade mark registrations. It also has a revenue of over € 24 billion and invests € 1.6 billion euros per annum (15%) in innovation.
Not a direct comparison, but contrast this with New Zealand businesses which only spend around 0.5% of New Zealand’s GDP on innovation.
Frans van Houten opened with a fantastic quote “Business strategy without IP strategy is no strategy”. A totally powerful message. This was echoed throughout the conference although worded differently.
For example, Christian Hahner, who is the head of IP for Daimler, stated that the customer is the company, not the inventor.
For the record, Daimler is also a big player with over 16,000 patents, 17,000 trade mark registrations, has a revenue of € 114 billion and invests over € 5.6 billion per annum in innovation (more than Philips!).
All of the in-house IP counsel I listened to reported directly to top level management in the organisations. The overriding message was that IP was viewed as integral – not an add-on, not just legal, and not purely defensive.
Further it was recognised that R&D and IP need to work hand in hand – this was emphatically stated by Damon Matteo former CEO of PARC. He should know, PARC invented the laser printer and has 2700+ patents, 500+ trade mark registrations, has a revenue of $ 60 billion and invests $ 65 million per annum in innovation.
Reza Green, the Vice President of IP of Nova Nordisk also stated that chemistry between patent attorneys and inventors was important. This was echoed by Christian Hahner who said they wanted patent attorneys to have the ability to interact well with inventors.
This was reassuring to hear as I regard our relationship with our clients as being a defacto in-house counsel. This is particularly needed in an economy such as New Zealand as we do not have many businesses with the horsepower to support an internal IP department.
It was also gratifying to hear Jako Eleveld the General Manager of Licensing of Philips state that an ideal IP department had multiple IP functions which worked well in a consolidated way. This is what we strive to do at James & Wells with basic patent attorney functions augmented with IP strategy, commercialisation, litigation, our Asia division and educational programmes.
New Zealand is very fortunate that it has the legal and commercial framework that can allow such structures unlike other countries such as the UK which does not readily allow that holistic approach.
The conference also reaffirmed the importance of what I call the three ‘C’s as part of an IP strategy.
The first ‘C’ is Competitive Intelligence – finding out what others are up to and what are the markets and opportunities. There was a bewildering array of service providers at the conference in this area.
PARC and Daimler use competitive intelligence to avoid conflict. Peter Spours, previously of Tom Tom used it to work out how to block competitors through either:
- Gaining prior art to stop competitor’ rights. For example Japanese patents were not originally searched by the USPTO and these could be used in leveraging deals.
- Buying patent rights to block other competitors.
- Brainstorming to create patent rights in a competitive space.
Tom Tom should know, they have 1400+ patents, 900 trade mark registrations, a revenue of € 963 million and invest € 165 million per annum (17%) in innovation.
Competitive intelligence also helps define the second ‘C’, namely Competitive Edge. I’m not going to discuss this in this article as this has been a subject of many other articles I have written.
The third ‘C’ is Collaboration, a theme that resounded throughout the conference.
Collaboration includes 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 – a strategy practiced to great extent by PARC.
- Creating an open innovation environment by licensing out to develop a market – practiced significantly by Philips.
Not discussed (probably because these are the big guys) is leveraging your IP to help you do deals to take you further on the global stage. Often Kiwi companies do not have all the resources to fully develop a market, but other businesses (like the big guys) may have complimentary resources and knowing IP could do a deal with you – if you have the IP they want.
To that end I discussed potential deals for Kiwi companies with the Philips IP Scout when I was there.
In summary there were lots of good learnings from the conference which I would like to see applied to smaller businesses within New Zealand for good effect.