On the Road
A Journey Across the Intellectual Property Landscape
Why go on the road?
Because there are places to go and people to meet. Because CEOs and financiers and start-up entrepreneurs don’t do focus groups. Because one on one conversation is the best route to understanding what really matters to them. Because intangible assets make up 80% of corporate value but the very concept of intellectual property can sometimes seem a little, well, intangible. The road trip is about delving into the attitudes of decision makers and finding undeniable truths out there.
Where we went London Silicon Valley San Francisco Detroit Chicago Basking Ridge New York Philadelphia
EverEdgeIP set out to examine the opinions, attitudes, and perceptions of business leaders and opinion-shapers on the subject of intellectual property. Our journey took us from London’s Silicon Roundabout to Silicon Valley, across America’s manufacturing heartland to its east coast financial centres.
In the course of our travels we spoke to dozens of innovators and senior decision makers ranging from serial start up founders to C-level executives of blue chip corporations. Their expertise spanned a spectrum of business categories, from technology and media to manufacturing and private equity.
We spoke to people like this
Who described themselves like this
Jim Head of IP Global telecommunications giant
Edward Director of Business Development Major R&D lab
Irving CTO Emeritus Fortune 50 technology company
Georgia Director Global engine, packaging and energy firms
Jeff CEO Legendary commercial and consumer technology brand
Robert Managing Director International private equity leader
Dave President Serial start-up founder
John CEO Leading advocacy organization for America’s SME community
Al CTO Global automotive supplier
Bill Managing Director Private equity specializing in clean tech
Robert Head of Engineering Global microchip supplier
Who run companies like these
“ I’m a third generation entrepreneur” “ If you’re a pure technologist you almost have a disdain for business. But I discoverd that business people did stuff I didn’t understand so I jumped in to learn about it. I am an extreme overachiever”
“ Two thirds of every car in the world has our parts in it”
“ I work on behalf of 40,000 small business owners”
“ My dad was the godfather of Tech IPO’s. So you could say my background, genetically, is investment banking and technology” “ I woke up in the middle of the night with this idea. Literally. It’s always about people”
“ I’ve worked in four continents at the same time”
Why are you talking to me?
Some observations
— From CEO and CTO, to developer and financier, most people think IP has little or nothing to do with everyday business or with them. — They see it as removed and remote from their lives and the work they do. — They have much to say and many opinions about innovation, ideas, and business but somehow, that’s not connected to intellectual property. — They invariably see it as someone else’s responsibility.
Some thoughts Most heads of global enterprises and tech entrepreneurs readily acknowledge the importance of intangible assets to their companies’ success. So it is surprising how many boards and business leaders feel somewhat removed from IP. Time was when intellectual property was looked upon as simply a legal mechanism—a sword and shield, and IP strategy was no more than a matter of filings and enforcement. But times have changed.
“Tell me what this is about again?” “ I’m not super-expert about these things.” “ Is this pertinent? Should I keep talking about this?” “ Are you sure I’m the right guy to be speaking to?”
In an era of digitization, globalization, continuous disruption and convergence, it’s been said that every business is a technology business. Today IP is everyone’s business.
What is IP?
“It’s your competitive advantage.” “ IP is what makes you special. IP is not an adjunct to business, it is the core.”
“It’s what makes us different.”
“ Value lives & dies on innovation & ideas… IP is an anchor for that.”
“ IP is more than patents — it’s what goes on between two ears.”
“ IP is like wearing a seatbelt, it’s important but it’s so routine you forget it’s there.”
“ It’s the collective intelligence that allows you to bash nickel into titanium.”
Some observations — People tend to apply their own personal definitions and interpretations. — Some go down a narrow alleyway to patents, some apply a broader definition like ideas & innovation. — For many, it’s a necessary evil while others associate it with business differentiation.
“IP is important. But it’s not urgent...
Some questions — What IP do we have? How much are we creating on a daily basis? — Is it being used? If not what is happening to it? — What are our competitor’s IP positions?
Some thoughts
...until something goes wrong.”
For many people, IP signifies ‘hard’ rights, such as patents and trademarks. But this is a limiting view. The majority of the intellectual assets in most businesses, in terms of volume and value, are not patents and trademarks but encompass a broad range of human and organizational capital. Simply put, it’s the stuff that makes your organization special: the know-how, processes, inventions, data, design, brands, content, ingenuity and imagination that give your business its edge. So maybe it’s time to take IP out of the patent and trademarks box. It’s not about legal rights. It’s about business assets.
Ambivalence abounds
Some observations — There’s a lot of skepticism out there. — People don’t naturally relate financial value or company performance to IP. — Between patent trolls and software pirates people are dubious. — There’s a tendency to approach IP reactively rather than pro-actively. — The complexity surrounding IP can often be daunting for non-specialists.
Some thoughts
“ Steve Jobs didn’t make any money on patents.”
“ IP is niched to the nines – it’s wrong but most people can’t see its relevance to what they do.” “ IP is hiding, stuck in legal departments or in Texas with some patent trolls.” “ In Maslow’s Hierarchy of Needs, there’s oxygen and water and way up on top is self-actualisation. That’s where IP is self-actualisation. And I’m way too busy finding water and air.” “ To be honest, I don’t spend a lot of time thinking about it.”
Tales of patent arms races, “lawfare,” and pirates abound in the business media and have done much to define IP as purely a legal issue. But the laissez-faire attitude that affects some executive suites has other roots as well. Historically, among corporates, attention to IP has been primarily event-driven — coming to the fore when M&A are contemplated or at periods of divestiture and disposal. In the case of SMEs, a focus on day-to-day business or bringing products to market often leaves little bandwidth for IP concerns. For start-ups IP is often just one tick box among many in the due diligence and capital raising process. In short, regardless of size many companies fail to connect the key relationship between succeeding in an economy fuelled by innovation and ideas and understanding IP. The opportunities to harness and capitalize intellectual assets have never been more abundant. And the costs of mismanaging IP inside and outside the organization have never been higher.
Intellectual property is everywhere
Some observations — It’s all over the place and everywhere. — It’s hiding, somewhere in the legal department and office of the general counsel. — Mining new sources of IP is often a challenge. It’s there. It’s valuable. But where do you drill? — Sometimes the best IP belongs to a competitor or someone else entirely.
Some questions — What latent or dormant IP do we have? What orphan technologies are out there? — Who is accountable for IP strategy? — What are our peers and competitors doing? How much IP risk are we running?
Some thoughts
“ Our IP is in our products, joint ventures, and distribution channels all over the world.” “ IP isn’t just about us. It’s also about them. Even if you don’t care about IP you can guarantee someone in your industry does.” “ It is buried in the human collective.” “ IP is neither here nor there nor anywhere.”
The management of IP is clearly becoming a critical concern among a growing number of innovationcentric organizations. No longer relegated to a legal sub department, more and more companies have established C-suite responsibility for the oversight of intellectual property. But there is still work to be done. For CIPOs, there is a growing realization that successful strategy depends on building a broader level of awareness, alignment and engagement with IP across the organization — a collaboration that includes legal, R&D, marketing and finance. Early and ongoing interaction between business functions and specialist resources is critical to effectively identify, value, deploy and extract value from IP. Likewise understanding the IP landscape of your industry can mean the difference between a successful product and failed R&D, between subsistence margins and significant growth.
This is about business “ When your biggest client is also your competitor, you’re not going to sue them for patent violation.”
Some observations — Most leaders see the world in terms of business challenges, not IP challenges. — Senior management instinctively understand that brand, content, innovation and ideas can drive business growth but are often unsure how to measure and leverage these assets. — Merely having IP is not enough. It’s how you manage it, your strategy, that transforms the raw resource into something truly valuable. — IP is where IT was in the early 80’s: misunderstood but with huge potential. It needs business thinking to unlock that value.
Some questions “ We are tiny but we are amazing at technology.”
“ We buy and sell companies. There’s no correlation between companies with huge IP portfolios and performance.”
“ I’m an engineer. We’re focused on R&D. But ultimately we’re in the business of selling car parts.”
— Do we have an IP strategy? Does it align with our business and R&D strategy? — How robust is our IP Position? Can we improve it?
Some thoughts Corporate managers and their entrepreneurial counterparts quite naturally see the world through the prism of business questions, not IP issues. But increasingly the two are intertwined. As technology and innovation continues to play a larger role in our lives, so will IP. In a knowledge based economy, decisions concerning the creation, valuation, control and commercialization of intellectual assets are rapidly evolving into a central consideration of overall business strategy. The multifaceted nature of new products and services present a host of complex issues for business leaders. Yet the metrics on which they are judged has not changed: improving margins, outpacing competitors, and increasing share value. Recognizing the role that IP strategy and proactive management can play in supporting these objectives is not a new theme. It is simply the new pragmatism.
IP is everybody’s business today
An integrated approach is fundamental to identifying, harnessing and maximizing the value of an organization’s intellectual assets. Business leaders and advisors from around the world rely on us for the strategic insights and specialist resources to make this happen. That’s how EverEdgeIP fits in.
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