As I wrote in a recent blog post, I have noted a shift over the last couple of years. It used to be that the most-often asked questions on open innovation evolved around intellectual property rights. How can we do open innovation and still protect our intellectual property?
This is still a very important issue, but I have noticed that the questions are asked less frequently and the issue is no longer one of the main topics in the presentations you hear from corporate people presenting at conferences. The reason for the latter is that the leading companies understand that business needs to become before legal issues and they have gained experience in making this happen.
A few things on this include that legal departments at these leading companies have been turned around. They now think offense rather than defense. “Yes, there will be challenges on this case, but there are also opportunities. Let’s find a way to work around the challenges.” Another thing is that they have developed a range a simple documents and approaches that better allows them to engage with potential innovation partners. These simple approaches allow them to focus on opportunities before they need to look into the more complex legal issues.
Olivia Solon, a news editor from Wired, recently asked me some questions on open innovation and IP law that builds further on this. This is an excerpt from the interview:
Do you think the current legal system is able to deal with the idea of open innovation?
Yes. Companies that are successful with open innovation have no need to change the legal system. They have just found ways to circumvent some issues that could hinder open innovation – and they are almost within their organizations. The keyword is mindset. Are the legal people thinking offense or defense? Can they see the opportunities or just the challenges? Business-minded lawyers are needed for this.
How do you balance the idea of intellectual property and open innovation? Are they opposed to each other?
No. The challenge is to make them work together. You can argue that companies only do real open innovation when they create new IP. It is easy enough to decide who brings what to the table and how to compensate for this. The real challenge starts when you co-create new IP. This goes back to my reply to the first question.
What is the biggest challenge for lawyers/companies when it comes to trying to become more open and share knowledge?
In my view, they seem to be trained – and some are very well trained – to minimize risks rather than seeing opportunities. This is the biggest challenge.
How do companies move from being very closed and secretive to being open and collaborative?
This is a change process. You cannot just do this over-night. It takes years in which you start out small, get some early successes and then convince more people within your company and relevant ecosystems that the open and collaborative approach brings more benefits than what comes from being closed and secretive. It is also important to be able to show benefits not only for the company, but for the individual person as well.
Jackie Hutter, who is a former corporate lawyer and one of my key sources on the topic wrote a blog post titled: Success in Innovation Requires IP Counseling on the Front End: Here’s How to Make it Happen.
In the blog post, she wonders what innovation leaders should do if innovation teams need IP lawyers to be involved in their projects as IP lawyers generally do not operate well in this space. It is a good question to which she also offers some suggestions. They are:
• Ensure that your organization allows business leaders to make the ultimate call regarding innovation pathways. If lawyers can kill early stage programs because of uncertain risk profile, then innovation will probably never get done. In this case, it is better to keep in-house lawyers shielded for as long as possible from the innovation process.
• Align lawyer incentives in your organization with innovation process, not risk mitigation and cost control, at least for those who work with innovators. If your lawyers do not get in trouble if they did not absolutely mitigate risk but, rather, managed and communicated risk to their business teams, lawyers will more readily accept the role of placing guardrails for business, as opposed to being traffic cops.
• Realize that not all lawyers will operate well in the innovation space. Your organization may have to hire someone from outside who possesses the primary desire to be a business counsellor, instead of being a rule-maker for the company.
Jackie Hutter states that these steps do not mean that your organization will be able to reduce your budget for lawyers in your law department, as you will now probably need additional headcount for lawyers where you previously had one. However, your organization will be better able to obtain critical advice on the front end of the innovation process that can improve your overall returns on innovation investment and help reduce costly litigation issues.
Resources:
Here you can find some resources on this topic. It is a collection of 15inno blog posts and other relevant articles, blog posts or websites. Please note that some of the 15inno posts might need an update, but they are still worth looking into. The comments are also helpful in giving an additional perspective.
15inno blog posts:
• Why Intellectual Property Issues Are Less Important for Open Innovation
• Legal Aspects of Open Innovation for Small Companies: A P&G Perspective
• Open Innovation and IPR: Where Are The Good Sources On This?
• Intellectual Property Issues in Collaborative Research Agreements
• Ready-to-Sign Licensing Agreements: Does One Size Fit All?
• Intellectual Assets for Innovation
• Success in Innovation Requires IP Counseling on the Front End: Here’s How to Make it Happen
• A Patent is Not a Business Model
This post is part of a series of posts as I develop a resource on how to implement open innovation. It is work in progress and your input is highly appreciated.
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