Harvesting External Innovation

Managing External Relationships and Intellectual Property

Donal O'Connell

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781409418337
• eBook ISBN: 9781317123545
• Topic: Business
• Subtopic: Business General
• Index: Business

A fundamental change in the way organisations approach innovation is taking place. It is driven by the simple realisation that not all the smart people work for just one organisation. Few intellectual property books concentrate on external innovation and more particularly on dealing with external inventors and handling their inventions. Harvesting External Innovation begins by examining the broad subject of innovation, stressing the need to understand its forms and phases, ways and means to encourage innovation. It then addresses the growing phenomenon of external innovation. A number of different approaches to engaging with the external innovator community are then considered, together with real life case studies. Harvesting External Innovation discusses in depth how best to handle intellectual property matters, how to actually work with these external inventors and how to handle their inventions, including a suggested process and check list.

CHAPTER 1 Not All the Smart People Work for You

Not All the Smart People Work for You!

The very nature of the business I have been engaged in for the past 21 years involves working continuously with customers, suppliers, application developers, content providers, universities, technology houses, design centres, equipment manufacturers, small start-up companies and last but not least even competitors.

You could argue that working with these external parties has always been seen as normal. However, the fundamental change which is taking place in more recent times involves us cooperating and collaborating with these external parties in the area of innovation and in the research and development of our products and services, thereby bringing them into the very core of the business. This has been driven by the simple realisation that not all the smart people work for us.

Intellectual property and especially patents play a fundamental role promoting and protecting innovation, regardless of whether that innovation comes from internal employees or persons external to the company. This book may therefore be used as a training manual to help you deal properly and professionally with these external inventors and to handle their inventions efficiently.

Number 170 Queen’s Gate, Imperial College, London

Imperial College in London organised a workshop on the subject of external innovation and intellectual property (IP) in late 2008. The workshop was officially titled ‘Open Innovation and Intellectual Property’ but in reality it dealt with various forms of external innovation, not just open innovation. The workshop was organised by Imperial College Business School and was made possible with support from the Innovation Studies Centre. It took place at 170 Queen’s Gate, one of the most attractive buildings on campus and although I have attended and presented at a large number of IP seminars and conferences, this particular event will definitely linger in my mind for a long time because of the growing importance of the subject matter.

The organisers had invited representatives from various companies and industries, as well as from academia, to come and openly discuss the topic. The workshop was very enlightening and a good and lively debate took place.

Prior to the workshop, participating firms had been sent the following questions designed to explore how their organisation was addressing open innovation:

• What role do external parties play in the search for new ideas to be exploited commercially within your company (that is, how important is external innovation to your business)?

• How does your company design and manage its innovation process and IP strategy in order to leverage external ideas?

• What are the problems you have faced when opening up your innovative activities to external parties, such as organisational issues, IP rights and so on?

These questions were designed to motivate participants to think about and share their experiences on the challenges they had faced and the opportunities they had found with external innovation.

At the end of the workshop, Brian Graves, Head of Engineering and Technology at Imperial Innovations, summarised the discussion and the various presentations, picking out key points from each. He spoke about my presentation saying that it provided very useful insight directly from the coalface, as the company I was working for at the time of the workshop were tackling real problems and issues and had implemented some concrete solutions.

This book very much builds on the presentation given at Imperial College. When companies and organisations can be guided to devise and implement effective processes, together with suitable support structures for those actually doing the work, then more effective responses become possible. It is, after all, at the coalface where corporate strategy is put into practice. Growing and developing external innovation is a key corporate strategy for many companies, while dealing with external inventors and handling their inventions is the work done at the coalface.

The Importance of External Innovation

Innovation is a key element to survival and profitability for companies and organisations, and innovation can take many forms. It can be disruptive, transformative, radical, breakthrough, incremental or step improvement in nature. It begins with considering things differently and involves asking questions, conducting experiments, gaining new skills and competencies, improving knowledge and changing and modifying. Most importantly, it requires patience and perseverance, together with a desire or hunger for risk, a willingness to question and an open mind to look at things without a preconception. Innovation, in its many forms, can impact products, services, processes and business models.

Raw creative ideas are needed to facilitate innovation and while you may not and do not need to be the source for the creative ideas, you need to understand the process. The creative thought process is not logical and requires some degree of freedom and openness, coupled with a non-judgmental environment. The innovation process within companies is there to foster innovation by capturing, evaluating, and developing these creative ideas to drive growth and profitability and to increase the companies’ competitiveness.

Continuous step improvements are needed just to stay in the race, while radical innovation is required to hold a position of leadership, as incremental innovation is no longer a viable source for competitive advantage. One of the secrets of success is combined transformational changes in offerings and operations and major changes, such as disruptive technologies and discontinuities in the market which play a part in fostering and encouraging innovation.

Traditionally, internal innovation was the paradigm under which most firms operated, with most innovative companies keeping their discoveries highly secret with no attempt made to assimilate information from outside their own research and development laboratories. This was driven by the belief that ‘the smart people in our field work for us’. However, in recent years the world has seen major advances in technology and society which have facilitated the diffusion of information. Companies have also begun to realise that ‘not all the smart people work for us and that we need to work with smart people inside and outside our company’.

Most companies will argue that they are already well versed in working with others. However, we are seeing a fundamental shift taking place. In the past, companies have indeed worked with others such as suppliers, distributors and subcontractors to conduct their normal business. However, we are now seeing them recognising the need to collaborate and cooperate with external parties on the more innovative or research-oriented parts of their business. Of course, innovation can arise independently of whether or not innovation was the main reason for the collaboration.

External innovation can take many forms, from working with universities, cooperating closely with key suppliers and vendors, collaborating with application developers, content providers, technology house and design houses, plus working with various communities including ‘open’ communities, innovation networks, standardisation bodies as well as customers and end-users. It can also involve working with start-ups and venture capital funded entities, as some of the smallest companies can achieve great things with limited funding.

External Innovation is not Easy

However, cooperation and collaboration between two or more parties is not easy and just getting the multiple parties to start talking together can be a challenge. What is each party bringing to the table in terms of knowledge, competence and skills and how are the parties actually going to work together in practice? What is each party going to contribute, what sort of framework will govern the work conducted and what do all parties ultimately wish to get out of the mix? Finally, how should success be measured? These are all questions which will need to be answered in a way which satisfies all parties involved.

Cooperation and collaboration between two or more parties involves interacting with others in ways that are friendly, courteous and tactful and that demonstrate respect for others’ ideas, opinions and contributions. It means seeking input from others in order to understand their actions and reactions, offering clear input on one’s own interests and attitudes so others can understand your actions and reactions and trying to adjust one’s own actions to take into account the needs of others and the task to be accomplished. However, in reality it means much more than this. It demands an understanding of the complex components of cooperation necessary to complete a task, such as balancing the participation of the various diverse entities involved, managing interdependence and balancing individual motivations with the common goals for cooperating and ultimately relying on the other entities to achieve results. It also involves the synthesis of multiple opinions, mediation of disagreements in order to achieve group consensus and applying prior experience with cooperative work to the current task.

Intellectual Property Law and Especially Patents Can Help

It may not be immediately obvious, but IP law and especially patents can help and support external innovation and address many of the difficulties identified. Patents promote and protect inventiveness, which is an important subset of innovation. In order for an innovative idea to be patentable, the invention must be new or novel, involve an inventive step and be industrially applicable or be operable and capable of satisfying some function or benefit to humanity. So patenting innovations arising from collaboration is one clear measure of success.

Patents are published typically 18 months after the first filing date so that we can all learn about the technology and the associated information is easily searchable and freely available online. This publication of submitted patent applications is a key point of interest to some collaborating entities, especially universities as patents are seen as a means to share knowledge.

Patents give clear proof of ownership, as a patent is very similar to a land certificate when you own a house. Patents also support the interoperability standardisation process as well as technology transfer and technology exchanges. For the purpose of collaboration this aspect of patenting helps to a degree in addressing the concerns about what each party is bringing to the table, what all parties ultimately wish to get out of the mix and how the success of the collaboration should ultimately be measured.

Legal and IP text books typically describe a patent in somewhat negative terms. A patent is not a right to practise or use the invention; rather, a patent provides the right to exclude others from making, using, selling, offering for sale or importing the patented invention for the term of the patent, which is usually 20 years from the filing date. A patent is, in effect, a limited property right that the government offers to inventors in exchange for their agreement to share the details of their inventions with the public.

However, a more enlightened view describes IP and patents in particular as a means to collaboratively build innovation, as opposed to blocking innovation. Collaborative innovation is reliant on some form of management and control, and IP is the means to manage knowledge-based collaborations, as knowledge and technology needs to be managed as a transaction of objects in the development stages. These objects may be as valuable as or even more so than the resulting products and services. Patents in this regard can be seen as a means to objectify knowledge so that it can be properly managed. Without IP and patents, collaboration in technology development becomes prohibitively difficult. This is therefore a fresher way to view patents, as a management system for knowledge-based business, instead of a legal right to exclude others.

So patents both promote and protect innovation and thus play an extremely important role when it comes to supporting external innovation when there are two or more parties working together and innovating together. Patents clearly have an important role to play supporting such cooperation and collaboration and can definitely help define what sort of framework will govern the work conducted.

Why am I Writing this Book?

My primary responsibility in recent years has been in the management and leadership of an IP team in a large multinational company. Prior to that, I was responsible for the running of a relatively large research and development site, growing it from scratch into a large multidiscipline technology centre, involved in designing, developing and successfully launching many products into the market place.

In my IP role, my time and energy has been spent examining our IP processes, checklists, organisational structure and mode of operation, whilst reviewing various options and benchmarking against other companies and their IP and patenting functions and as a result implementing a number of successful change projects. I have also been active in discussing these same issues with various in-house IP professions, with members of the inventor community, with external patent agencies and business and technology management. A number of these projects have been focused on the subject of external innovation and the role IP plays.

I very much wish to document what I have gained from these experiences and to share my learning and insight with those who may find it beneficial. I have also read many published IP books but believe that few, if any, concentrate on external innovation and especially on life down at the coalface, dealing with external inventors and handling their inventions.

Encouragement came from various sources, all urging me to write this book. Intellectual property is becoming more and more important to a company’s success and it is vital that the relationship with the external inventor community is successful, well organised and has an efficient and effective modus operandi.

There is still some learning to be done about how best to manage and lead such activities and I will continue to learn and develop and no doubt make some mistakes along the way. I hope that the writing of this book will mark a key milestone on my learning journey and that this book will also help the reader as he or she progresses along their learning journey.

In a sense, I am extending now on the ideas of my book Inside the Patent Factory which focused on the organisational structure and mode of operation of an individual organisation’s patent creation activities, to begin to examine the cooperation between different organisations and the role IP, and specifically patents, plays there.

Who is the Target Audience for the Book?

This book should be of use to anyone interested in innovation, as innovation today is most likely to involve external parties and to link to IP.

As I myself researched and drafted this book, I reached out to many people from different backgrounds and experiences and not just those linked directly to innovative activities. I found strong interest in this subject matter across a quite diverse group of individuals:

• Senior executives, general managers and those involved in corporate strategy and strategy development.

• Project managers responsible for researching, designing and developing new products and services.

• Specific functions within companies dealing directly with external parties, such as sourcing and purchasing.

• University relations personnel within companies.

• University staff collaborating and cooperating with industry.

• Legal professionals, both those in General Law as well as those specialising in IP matters, including those working in-house and in private practice.

• Innovators and inventors wherever they are located, whether in small, medium or large-sized enterprises or organisations or even out on their own.

• Students interested in this particular subject matter.

• Government officials responsible for encouraging and supporting innovation at a local, national or regional level.

I am very aware that this rather diverse collection of people listed here constitutes the primary audience for my book. Whereas once a book having the words ‘Intellectual Property’ within the title might only have attracted a minor audience of IP professionals, things are certainly changing and any subject linked to IP now tends to attract a much broader and diverse audience. I have therefore given much thought to the innovation and IP awareness levels of the audience, given their potential diversity. I have tried hard to incorporate and include different perspectives, views, opinions and attitudes toward external innovation and IP.

On What is the Content Based?

This book is based on my own experiences, whilst being a part of many innovative project teams. These include leading and managing various product development projects, setting up and establishing a ‘Product Creation Centre’, working with inventors, forging links with various universities, working with suppliers and vendors, application developers and content providers and hopefully learning from these diverse experiences. It is based on my sharing of information and experiences with experts from different fields, including speaking and contributing at international conferences.

It is also based on my role within an IP team working on the subject of ‘external innovation and intellectual property’ and the key learnings that the whole project team gained from that particular project. I have been honoured and privileged to work in a small but dedicated task force in recent times, focused on this subject matter, and the task force was focused specifically on the issue of handling inventions from external inventors and the filing and prosecuting of such cases. We were driven by a desire to gain a much better understanding of the best processes to deploy, the most efficient and effective systems to use and the tools to utilise. We determined the right level and content of information to communicate back and forth, what reward and recognition programme to put in place, and ensured that we addressed all associated legal issues. Our goal was to ensure that the flow of invention reports from external inventors would be smooth, efficient and effective for all parties involved. We were also interested in better understanding how external inventors themselves interfaced with our company and our IP department and how they went about submitting invention reports, how they were kept informed of progress and what issues and challenges they faced. As part of our task force work, we also wished to identify and really get to know the different external parties and individuals with whom we were already actually working together or would be working with in the future.

Some content for this book has been pulled from presenting at various seminars and conferences, talking about the subject matter of innovation and IP, and especially the interface between the inventor commu...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Acknowledgements
• Preface
• Chapter 1 Not All the Smart People Work for You
• Chapter 2 Innovation
• Chapter 3 External Innovation
• Chapter 4 The External Innovator Community
• Chapter 5 Intellectual Property
• Chapter 6 Different Approaches
• Chapter 7 How to Handle Intellectual Property Matters
• Chapter 8 Intellectual Property Terms and Conditions
• Chapter 9 Dealing with External Inventors
• Chapter 10 Working with Universities
• Chapter 11 Working with Your Suppliers
• Chapter 12 Innovating with Communities
• Chapter 13 Joe Public
• Chapter 14 Open Standards and Intellectual Property
• Chapter 15 Help and Support
• Chapter 16 The Key to Success
• Chapter 17 Conclusion
• Index