Intellectual property strategies

1. IP
strategies

2. Why does every organization
need an IP strategy?
 To ensure freedom to operate
 To protect own assets
 Manage employees
 Relationships with alliances, suppliers, customers, etc.
 To compete effectively

3. Levels of IP strategies
 Level zero – No IP strategy
 Level one – Defensive
 Level two – Cost control
 Level three – Profit center
 Level four – Integrated
 Level five – Visionary

4. Level zero – No IP strategy
 How come there are firms with virtually no IP strategy?
 Ignorance
 Inertia
 Think it is too costly
 Think they are at a low risk or low yield situation
 Lack of skilled personnel
 Worst strategy
 Every organization needs an IP strategy - why?

5. Level one – Defensive
 Build a portfolio of patents and other IP assets
 To protect itself and maintain freedom to operate

6. Examples of IP strategies
 Minimalist
 Slightly better than doing nothing
 Reactive and opportunistic
 Tight budget
 Mostly defensive
 Preserve the scope of protection for the longest possible
time period at minimum cost

7. Examples of IP strategies (cont’d)
 Burning stick
 Build a “campfire”
with strong IP rights
on key assets to scare
off predators

8. Level two – Cost control
 In addition to building a portfolio of patents and
other IP assets to protect itself
 It also prioritize its IP protection
 Evaluating its IP

9. Examples of IP strategies (cont’d)
 Suit of armor and shield
 Avoid IP conflicts where possible
 Shift activities to avoid exposure to
infringement
 Prepare for litigation in advance
 Sword and shield
 Strike competitors and stop them
from infringing
 Weapons: strong portfolio of IP
rights

10. Level three – profit center
 In addition to building a portfolio of patents and
other IP assets and prioritizing its IP,
 It acts proactively to extract value from its IP portfolio
 Actions include:
 Looking for infringers
 Looking for licensing opportunities
 Selling off or donating noncore IP assets

11. Examples of IP strategies (cont’d)
 Bargaining chips
 IP can serve as bargaining chips to ensure freedom to
operate
 Often lead to cross-licensing deals: portfolios of current and
future patents in a field-of-use
 The first one’s free
 Give away IP but gain elsewhere
 Adobe
 Red Hat

12. Examples of IP strategies (cont’d)
 IP thickets
 Grow as many different
types of IP rights as
possible around a product
or method
 E.g., Coca-Cola
 Pharmaceutical companies
(variants of a drug, methods,
dosage, etc. )
Domain names:
Coca-cola.com, .org, .net, .biz, .info, .ca
Coke.com, org, etc.

13. Examples of IP strategies (cont’d)
 IP forests
 Broader IP rights on many
different innovations
 May include IP rights on
technology, brands, supply and
distribution channels,
marketing, endorsements, and
customer base
Nike obtained about 1500
patents, 350 trademarks,
and a similar number of
copyright on commercials
in ten years, 10 times of
the IP obtained by Reebok,
its competitor in the athletic
footwear market.

14. Level four – Integrated
 There is a thorough integration of IP strategy with
corporate strategies
 IP management is not just an isolated department

15. Examples of IP strategies (cont’d)
 Patent troll
 These patent holding companies have no activities
except to acquire patents and enforce them against
companies with substantial activity
 NTP vs. RIM (Blackberry)?
 Patent aggregator
 E.g., Intellectual Ventures has aggregated 30,000+
patents in a wide variety of fields and has generated over
$2 billion in licensing revenues.

16. Level five – Visionary
 At the highest possible level, the organization looks
into the future to discern trends in IP (changes in laws,
government policy, and business practice, etc.) and
 Uses its prognosis to shape its strategy
 May even influence laws and create new trends

17.  Headquarters: Qingdao, China
 Industry sector: Household appliances
 Spirit of Innovation
 8,000-plus patents
 IP an integral part of its corporate strategy.
 An IP team was set up as early as 1992
 The IP function has veto power over many strategic decisions,
especially those relating to overseas operations.
 IP activities:
 Leading and participating in setting industry standards , at
both national and international level
 Acquisitions of Panasonic’s Sanyo Electric units in 2011 and
Fisher & Paykel in 2012 further enhanced its IP portfolio

18. Building a flexible IP strategy:
One size does not fit all
 Full exclusion: sword and shield
 Limited exclusion: revenue stream
 Open access: loss leader

19. Strategy tools
 The six Ps
 Policy on managing IP
 Personnel Practices
 Portfolio management
 Procurement practices
 Partnering practices
 Policing

20. Policy on managing IP
 Components of a general IP policy
 Recognize the importance of IP management
 Protects its own IP
 Respects the IP rights of others
 Confidentiality program
 Copyright program
 Patenting program
 Trademark program

21. Personnel Practices
 Goal:
 Maximize IP inflow and minimize IP outflow
 Employment contract
 Best place to state personnel practices
 Pre-assignment; confidentiality; disclosure; non-compete.
 Part-time and consultant: written agreement on IP
 At each stage of employment
 Recruiting: respect rights of former employer
 During employment: disclosure
 Termination of employment

22. Portfolio management
 Carrying out the general IP management policy
 Confidentiality; Copyright; Patenting; Trademark
program
 Evaluating various types of IP
 Registered IP
 Unregistered IP
 Value as a core asset or peripheral asset
 Protecting and policing IP assets

23. IP strength in three dimensions
 Three-dimensional assessment of
IP strength
 Legal scope: what is the scope of
the exclusive rights? What
activities and products do they
cover? How easily can they be
enforced? What weaknesses or
exceptions in exclusivity?
 Duration
 Geographical range
 This is the starting point of
further evaluation
Legal
scope
Duration
Geographical
range

24. Procurement practice
 What we procure
 Tangible things, legal rights, information, etc.
 May acquire “hot” goods that infringe an IP right
 Ensure freedom to operate
 Public domain
 Own the asset
 Obtain a license

25. Partnering practices
 Partners:
 Collaborators, suppliers, customers, users, clients, etc.
 Relationships:
 Joint venture, affiliate, franchise, license, etc.
 Key questions:
 Who owns existing IP rights?
 What rights are shared and what rights are retained?
 What about new IP rights?

26. Policing
 Notify competitors of IP rights
 Monitor the marketplace
 Confront suspected infringers