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  • Supporting the business or societal plan is VERY important. Holistic.
  • Philip Crisp etc, could ask for any other suggestions from the audience here
  • Reverse engineering would have been easy
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  • Expand on these concepts
  • Talk through and make connections Not all IC is codifiable The non-codifiable part is transitory and can walk away with the employee
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  • One way to look at IC The narrowing down of thought into knowledge and know how Codified Intellectual Assets Intellectual Property
  • These are the tools for creating value from knowledge However it is important to know how to use them in combination
  • So if you start with your core product, referred to here in the circle,, in the IT industry it’s not likely to be the entirety of the end-user’s purchase. You must add to this the complementary products (software for a hardware product, hardware for a software product, telecommunications, etc.), and the services. Services such as consulting to develop the business objectives and requirements, and integration services to make the solution work. This we call the “solution”. But there’s still more to a product than that. The end-user needs to make sure that the product will work for them, or is the best match to their requirements. For a complex product, there will be a need for pre-sales support to properly configure, explain, size, etc. the product for each client. After the installation is made, there will also be a need for support services, and upgrades. Additionally, there is a need to support the transaction between the end-user and the seller, for things like financing, delivery, billing, etc. These final components are added to make what we call “the offering”. Or what is often referred to as the solution stack. No company has the capability to economically and competitively deliver the offering by themselves to all customer types. This of course, is one of the main reasons we use partners. So in each market segment, and for each product category, you need to understand the channels and alliances partners you need to bring the most competitive offering to market. You should build a template that segments your market, analyses buying behavior, and selects the partner types that can best “fill the gaps” in that segment. [Some customers don’t expect much support, other clients need a lot – it’s important to understand how this is packaged] Circle?
  • There are many products that can be added. Using the whole product model, companies need to decide which to buy/build or partner: Which would be a drain on company resources ? Which would slow time to market ? Which would be easy/difficult for sales to understand and sell ? Which would be better to buy or partner ? IDC NOTES: Let’s say you work for a software company that builds analytical tools for large volumes of data. How is your product typically deployed? Do you use consulting services to define the payback that can be achieved through data analysis? Will you solution require additional server hardware to do the necessary number crunching, database management, and data transfer? Will system software be required to manage to additional storage and backup requirements? Can the end-user take advantage of development tools that can enhance the capability of the solution by customizing it to the end-user’s needs? Are server applications , such as ETL (extract-transform-load) tools needed to support the gathering of data into a data warehouse? Will the end-user require Application development or modification services to do the customization? Is PC/client hardware required to support additional users or give more power to existing ones? Are there additional desktop applications that can enhance your solutions, and are there ones that apply to specific market segments? Is there a need for new or enhance network capability, that require LAN or WAN connectivity products ? Will the services of a systems integrator be needed to make everything work together and perform the installations? Will the users and IT staff require training services to be able to use the solution? Who will perform the maintenance and support services on the entire solution? These are all questions a customer might ask, and all potential areas involved in a solution. Each one could represent a partnering opportunity or requirement to sell your product into a market segment. Each one could be an area where you are currently providing a product or solution that could be more profitably or successfully provided by a business partner, and may be draining resources from your core business. [How many of these would Dell provide to their customers?]
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  • Discuss in detail with an example: car manufacturer
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  • Build: In house development Buy: Acquisition of technology Partnering: Resale of existing technology In part a buy decision; but you don’t own the Intellectual Property. Alliance partnering where you engage in light integration and joint go-to-market and selling strategies Buy or Partner only relevant if the technology exists. BEA example as why building can be risky—bet on CORBA, did not win in market. If industry standards are in flux and you are not a standard setter: partnering or buying may be a better strategy Informix/Illustra example of why Buying can be problem—market shifted-need for object database not as planned. HP/Canon –OEM partnering for laser jets In house development: offers the highest level architecture control and go-to-market strategy control but also highest exposure to competitive risks or changes in customer preferences due to the time to market issues. Buy model: technology acquisition. Initial time to market can be shortened with either resale or acquire. Costs of acquisition are of course higher than resale but may not be higher than product development. Product risks are less if you are diligent about acquiring proven technology. Once acquired, must make sure it works seamlessly with current product, spend time to develop into current product . Afterwards the risks and level of control are the same as the build model for continued investment in the product. Resale model inherits aspects of technology acquisition and in partnering. In a resale model the costs and technolgoy risks are much less and switching costs are moderate., but the trade off is in level of control of the product. Also, in resale mode, have to ensure sales knows how to sell, develop contracts, sales support plan, coordinate with other vendor. Alliance partnering is the low cost, low risk, and shortest time to market model. It also has the least control factor. Try before you buy . Fast speed to market, take advantage of partner’s development efforts, partner keeps the selling, sell as add-on, sales doesn’t have to learn product, can refer to current vendor who sells and supports. However, must do due diligence on company/product, since have least control over product/business. How to overcome “ religious” objections to partnering as company grows—Time is $$$$$, position in terms of revenue growth, revenues sooner, catching market as it emerges and grows. (Leaders get premium pricing, lower costs of sales, analyst attention, market awareness).
  • Example: biotech companies No other companies doing what you are doing—pioneer, must build. If a product is core to your business (how you compete in the marketplace), you need the level of control of your destiny that comes with owning the intellectual property and determining its future course. Building and owning the IP gives the most control and also the most profit opportunity IF you have the time to get to market competitively. Clearly when a technology does not exist, you don’t have an option to buy and your only partnering option would be joint development. This may be an excellent choice when you need to supplement your own staff in expertise or capacity. An example: Amdahl and Sun traded code on early Unix development; Amdahl having mainframe experience with multi-processer scalability (remember Amdahl’s law) and other mainframe class features.
  • Think Speed, Ownership. When technology/product is core to business and you want to own the intellectual property, yet you don’t have the expertise in house and time is of the essence, buying makes sense if there are other companies who have already spent the time and resources developing the technology. Partnering won’t work if company wants to own and have the technological leadership. Buying allows company to immediately being seen as having the expertise.
  • 1.Partner when speed is important but products/services enhance your product, rather than being core to your business. You don’t need to own technology yourself. 2.You can partner to claim space in market or establish a competitive positioning while you build or evaluate a buy. 3.Reduce risk - especially if industry standards are in flux and you are not a standard setter i.e. Sun vs. Microsoft; 4.Market leaders are not clear and it is risky to make an acquisition bet. 5. Customers buy best of breed solutions, customer may buy some but not your entire product suite.You may have to partner with “competitors” to satisfy customer buying preferences and to reduce customer risk. Oracle + SAP even though a 100% Oracle sol’n is available.
  • Berry and Roberts have placed on the Familiarity matrix – the suggested partnership arrangements for each of the boxes – For example in suicide square you may need to get venture capital for a new business, make an educational acquisition, or fund basic research in a university – or possibly all three. If the technology is familiar to you but the market is new a joint venture may be called for.
  • There is no best place to be: it depends on your needs
  • Slide 1

    1. 1. Integrating Business and Intellectual Property Strategy Dr. Guriqbal Singh Jaiya Director Small and Medium-Sized Enterprises Division World Intellectual Property Organization
    2. 2. Spotlight is on knowledge in today’s economy <ul><li>Knowledge, Weightless, Information, Digital or Service Economy </li></ul><ul><li>Factors of production : Land, Labor, Capital, Intangibles (Knowledge) </li></ul><ul><li>Knowledge as useful Information (or Service) </li></ul><ul><li>Information as a “ Public Good ” </li></ul><ul><li>Information as Property </li></ul>
    3. 3. Market-oriented Economy <ul><li>Playing Field: Unfair competition; free riding </li></ul><ul><li>National Legal Systems: Diversity (bilateral/regional/ international treaties or agreements) </li></ul><ul><li>Adding Value : Meeting or exceeding market needs or expectations </li></ul><ul><li>Market research: Consumers’ needs, competing products or substitutes, gaps </li></ul><ul><li>Technological innovation as an element of marketing </li></ul>
    4. 4. The challenge of adding value in today’s economy <ul><li>Raw materials/Inputs: Processing ( Value addition ) = Value added output/component; product; sale; Profit </li></ul><ul><li>Value addition: Cheaper, Faster, Better : Functional/technological or aesthetic/non-technological; Rational/Emotional (More for Less) </li></ul><ul><li>Price; access/availability; consistency </li></ul><ul><li>Individual, Enterprise (legal person), Chains, Networks; consortia; Open Innovation (Industry-Government-Academia) </li></ul><ul><li>Ownership vs. access to knowledge </li></ul><ul><li>Value Addition, Value Delivery and Value Extraction </li></ul>
    5. 5. C ustomer E xpectation D ilemma Time Performance Expectations Continuous Improvement Performance Gap
    6. 6. Tangible and Intangible Assets <ul><li>Intangibles differ from tangibles in two ways that “ change the rules of the game ”, (if not the game itself): </li></ul><ul><ul><li>Value in context </li></ul></ul><ul><ul><li>Multiple simultaneous value streams </li></ul></ul>
    7. 7. Levels of Product Brand Name Quality Level Packaging Design Features Delivery & Credit Installation Warranty After- Sale Service Core Benefit or Service Actual Product Core Product Augmented Product
    8. 8. Tangibility Spectrum Tangible Dominant Intangible Dominant Salt Soft Drinks Detergents Automobiles Cosmetics Advertising Agencies Airlines Investment Management Consulting Teaching Fast-food Outlets Fast-food Outlets            
    9. 9. <ul><li>Selling Products </li></ul><ul><li>Customers who care about products “on their own terms”: is this the right product for me? </li></ul><ul><li>Build the “best” product </li></ul><ul><ul><li>Best designed </li></ul></ul><ul><ul><li>Lowest cost </li></ul></ul><ul><ul><li>Most reliable </li></ul></ul><ul><li>Selling Interconnected Systems </li></ul><ul><li>Customers who care about the total system experience: will this connect with the rest of my world? </li></ul><ul><li>Control the architecture </li></ul><ul><li>Or </li></ul><ul><li>Influence the architecture and build the best products within it </li></ul>
    10. 10. The challenge Performance Time Selling products Selling (parts of) interconnected systems
    11. 11. Strategic Entrepreneurship and Innovation <ul><li>Entrepreneurship is concerned with: </li></ul><ul><ul><li>The discovery of profitable opportunities </li></ul></ul><ul><ul><li>The exploitation of profitable opportunities </li></ul></ul><ul><li>Firms that encourage entrepreneurship are: </li></ul><ul><ul><li>Risk takers </li></ul></ul><ul><ul><li>Committed to innovation </li></ul></ul><ul><ul><li>Proactive in creating opportunities rather than waiting to respond to opportunities created by others </li></ul></ul>
    12. 12. Understanding the Process of Innovation Pre-IPO Expansion Start-Up Seed Idea / Concept <ul><li>Bright Idea </li></ul><ul><li>Experimental </li></ul><ul><li>Research </li></ul><ul><li>Business Plan </li></ul><ul><li>Proof of Concept </li></ul><ul><li>Legal Entity </li></ul><ul><li>Founders = Mgt Team </li></ul><ul><li>Minimal Revenue </li></ul><ul><li>Slow Growth </li></ul><ul><li>Support Functions </li></ul><ul><li>Administration </li></ul><ul><li>Marketing </li></ul><ul><li>Revenue Growth </li></ul><ul><li>High Growth </li></ul><ul><li>Head Count </li></ul><ul><li>Multiple Cycles </li></ul><ul><li>Viable </li></ul><ul><li>Market acceptance </li></ul><ul><li>Heading to IPO or M&A </li></ul>The Process/Steps of Innovation Time $
    13. 13. Expansion Start-Up Seed Idea / Concept <ul><li>Business Plan </li></ul><ul><li>Prototype/ POC </li></ul><ul><li>Project Management </li></ul><ul><li>Business Premises </li></ul><ul><li>Project Management </li></ul><ul><li>Management Training </li></ul><ul><li>Corporate and Secretarial </li></ul><ul><li>Financial </li></ul><ul><li>Training </li></ul><ul><li>PR and Marketing </li></ul><ul><li>Networking </li></ul><ul><li>Business Development </li></ul><ul><li>Recruitment </li></ul><ul><li>Business Development </li></ul><ul><li>A & P </li></ul><ul><li>Market Access </li></ul><ul><li>International support and Mkt. Access </li></ul><ul><li>Diversification strategies and support </li></ul><ul><li>Recruitment </li></ul><ul><li>Training and Incentives </li></ul>The Needs of Each Stage IP Management Needed in all stages Time $
    14. 14. <ul><li>Understand the value chain of the business and industry </li></ul><ul><li>Understand how profits are generated </li></ul><ul><ul><li>primary product </li></ul></ul><ul><ul><li>spare parts and related products </li></ul></ul><ul><ul><li>service and maintenance </li></ul></ul><ul><li>What are the important features of the IP? How does it add value to the business? </li></ul><ul><li>What are the important features of the industry other than IP? </li></ul><ul><ul><li>other important intangible and tangible assets in the value chain </li></ul></ul><ul><ul><li>competitive structure of the industry </li></ul></ul><ul><ul><li>customer characteristics and purchasing criteria </li></ul></ul><ul><ul><li>substitute products or services </li></ul></ul>Understanding the business/role of IP Manufacturing Patent Distribution Sales Brand
    15. 15. IP Environment Suppliers Established Leader Complimentors Customers Other Competitors Disruptive Technologies Converging Technologies You
    16. 16. IP Deployment Continuum <ul><li>IP risk balance favors target </li></ul><ul><li>Goal: Design Freedom </li></ul>Concerns Opportunity MAD <ul><li>Balanced IP risk </li></ul><ul><li>Goal: Confirm MAD </li></ul><ul><li>IP risk balance favors You </li></ul><ul><li>Goal: Identify value generation opportunities </li></ul>| | | | | | | | | | |
    17. 17. Sources and Conversions of Value $ Sources of Value <ul><li>Innovations </li></ul><ul><li>Complementary </li></ul><ul><li>Business Assets </li></ul><ul><ul><li>Purchasing </li></ul></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Sales </li></ul></ul>Conversion Mechanisms <ul><li>Sale </li></ul><ul><li>Out-license </li></ul><ul><li>Joint Venture </li></ul><ul><li>Strategic Alliance </li></ul><ul><li>Integrate with </li></ul><ul><li>Current Business </li></ul><ul><li>Create New Business </li></ul><ul><li>Donate </li></ul><ul><li>Barter/Trade </li></ul>
    18. 18. Aligning Capabilities Vision Strategies Innovation Strategies Value Creation Value Extraction IP Objectives/Roles: Strategic Framework Cash Value Positioning Value Where does Intellectual Property fit into this?
    19. 19. An Aspect of Good Management <ul><li>People Management – because IP is generated by people and used by people </li></ul><ul><li>Knowledge Management – because a lot of knowledge is informal and may or may not crystallise as recognisable category of IP </li></ul><ul><li>IT Strategic Planning – because a lot of IP is IT-related; some of the more complex IP issues arise in IT context </li></ul><ul><li>Contract Management – because IP is often created (or improved) in context of a contract (eg, supply contract or joint venture relationship) </li></ul><ul><li>Asset Management – because IP is an asset, albeit intangible; it has a value </li></ul><ul><li>Risk Management – because there are risks to an organisation flowing from its actions, or failure to act, in relation to IP (including risk of lost opportunity) </li></ul>
    20. 20. Introduction to IP Management 1 <ul><li>Legal </li></ul><ul><li>Technical </li></ul><ul><li>Business </li></ul><ul><li>Export </li></ul><ul><li>Financial </li></ul><ul><li>Relationships </li></ul><ul><li>Accounting </li></ul><ul><li>Tax </li></ul><ul><li>Insurance </li></ul><ul><li>Security </li></ul><ul><li>Automation </li></ul><ul><li>Personnel </li></ul>
    21. 21. Introduction to IP Management 2 <ul><li>Trademarks (Brands) </li></ul><ul><li>Geographical Indications </li></ul><ul><li>Industrial Designs </li></ul><ul><li>Patents and Utility Models </li></ul><ul><li>Copyright and Related Rights </li></ul><ul><li>Trade Secrets </li></ul><ul><li>New Varieties of Plants </li></ul><ul><li>Unfair Competition </li></ul>
    22. 22. Bringing it All Together Example No. 1 <ul><li>Decades ago, Coca-Cola decided to keep its soft drink formula a secret </li></ul><ul><li>The formula is only know to a few people within the company </li></ul><ul><li>Kept in the vault of a bank in Atlanta </li></ul><ul><li>Those who know the secret formula have signed non-disclosure agreements </li></ul><ul><li>It is rumored that they are not allowed to travel together </li></ul><ul><li>If it had patented its formula, the whole world would be making Coca-Cola </li></ul>
    23. 23. Bringing it All Together Example No. 2 <ul><li>Patent for stud and tube coupling system (the way bricks hold together) </li></ul><ul><li>But: Today the patents have long expired and the company tries hard to keep out competitors by using designs , trademarks and copyright </li></ul>
    24. 24. Bringing it All Together Example No. 3 <ul><li>Patent for the fountain pen that could store ink </li></ul><ul><li>Utility Model for the grip and pipette for injection of ink </li></ul><ul><li>Industrial Design: smart design with the grip in the shape of an arrow </li></ul><ul><li>Trademark : provided on the product and the packaging to distinguish it from other pens </li></ul><ul><li>Source: Japanese Patent Office </li></ul>
    25. 25. Bringing it All Together Example No. 4 ® Registered Trade Mark ‘ TM’ Unregistered Registered Design Copyright: Labels & Artwork Patents: Several dozen!
    26. 26. Basic Message 1 <ul><li>IP adds value at every stage of the value chain from creative/innovative idea to putting a new, better, and cheaper, product/service on the market: </li></ul>Literary / artistic creation Invention Financing Product Design Commercialization Marketing Licensing Exporting Patents / Utility Models/Trade secrets Copyright/Related Rights Patents / Utility models Industrial Designs/ Trademarks/GIs Trademarks/ GIs Ind. Designs/Patents/Copyright All IP Rights All IP Rights
    27. 27. Basic Message 2 <ul><li>IP Strategy should be an integral part of the overall business strategy of an Enterprise </li></ul><ul><li>The IP strategy of an Enterprise is influenced by its creative/innovative capacity, financial resources, field of technology, competitive environment, etc. </li></ul><ul><li>BUT : Ignoring the IP system altogether is in itself an IP strategy, which may eventually prove very costly or even fatal </li></ul>
    28. 28. A Key Framework: The industry life cycle Era of Ferment/ Discontinuity “ Dominant design” emerges Maturity Incremental Innovation
    29. 29. New Ideas to Activity Stage Gated Development Process (SGDP) <ul><li>Idea, Feasibility, Proof of Concept, Prototyping, Scale-up, Market Launch. </li></ul><ul><li>Milestones, Hurdles, Probabilities of Success. </li></ul><ul><li>How do the new ideas develop? </li></ul><ul><li>How are they moulded into the required solution? </li></ul><ul><li>How do you bring them to market? </li></ul><ul><li>Do you do it alone or do you need help? </li></ul><ul><li>Just about every development on the face of the earth today results from a team effort!! </li></ul>
    30. 30. Developing New Technology? The path from new ideas through validation to a new technology: New . Technologies SGDP Intellectual Capital Human Capital Intellectual Assets Value Creation Value Extraction Intellectual Property
    31. 31. The Industry Life Cycle as an S curve Performance Time Ferment Takeoff Maturity Discontinuity
    32. 32. Uniqueness and Appropriability are very important: If a particular innovation, or the knowledge on which it rests, can be completely “appropriated” then the innovating firm may be able to maintain a unique position. This is a tremendous source of bargaining power.
    33. 33. Sources of Appropriability <ul><li>Intellectual property protection </li></ul><ul><ul><li>Patents </li></ul></ul><ul><ul><ul><li>Finite length </li></ul></ul></ul><ul><ul><ul><li>The right to prohibit “producing” </li></ul></ul></ul><ul><ul><li>Copyrights </li></ul></ul><ul><ul><ul><li>The right to prohibit “copying” </li></ul></ul></ul><ul><li>Secrecy </li></ul><ul><ul><li>Trade secrets & non compete clauses </li></ul></ul><ul><ul><li>“ Tacit” vs. codified knowledge </li></ul></ul><ul><li>Speed </li></ul><ul><ul><li>lead time </li></ul></ul><ul><ul><li>learning-curve advantages </li></ul></ul>
    34. 34. Intellectual Property – An Untapped Asset <ul><li>IP is the most underutilized asset in business </li></ul><ul><ul><li>Unrecognized on most balance sheets </li></ul></ul><ul><ul><li>Typically, an “afterthought” in business </li></ul></ul><ul><li>IP is one of the single largest opportunities for companies to increase strategic business value </li></ul><ul><ul><li>Create new business opportunities </li></ul></ul><ul><ul><li>Create barrier to entry for competitors </li></ul></ul><ul><li>IP represents a significant, untapped opportunity for revenue generation </li></ul><ul><ul><li>Patent Royalties in 2002 estimated at $100 Billion </li></ul></ul><ul><ul><li>Qualcomm – 27% of revenues from patent licensing in FY 2004 </li></ul></ul>
    35. 35. Intellectual Property – An Unrealized Threat <ul><li>IP represents a significant business risk </li></ul><ul><ul><li>Over 2 Million effective patents today </li></ul></ul><ul><ul><li>Patents filed increased from 175K in 1992 to 366K in 2004 </li></ul></ul><ul><li>The rush to monetize IP is on </li></ul><ul><ul><li>Royalties increased from $500M to $100B in the 90’s </li></ul></ul><ul><ul><li>Number of lawsuits doubled, cost tripled from 1992 to 2002 </li></ul></ul><ul><li>Many businesses are starting to act </li></ul><ul><ul><li>Boeing, IBM, Lucent, Adobe, Microsoft, P&G, TI </li></ul></ul><ul><ul><li>Infrastructure companies are forming </li></ul></ul>
    36. 36. Typical Responses <ul><li>Integrated, Active IP Strategy </li></ul><ul><ul><li>Active patent filing strategy </li></ul></ul><ul><ul><li>Use IP to achieve business objectives </li></ul></ul><ul><ul><li>Active effort to identify and mitigate IP Risks </li></ul></ul><ul><li>Have An Active Patent Filing Strategy </li></ul><ul><ul><li>Do actively capture ideas </li></ul></ul><ul><ul><li>Still don’t coordinate filing objectives with business objectives </li></ul></ul><ul><li>Have A Strategy, But Passive Versus Active </li></ul><ul><ul><li>View IP as event driven rather than business process </li></ul></ul><ul><ul><li>Wait for submissions vs. engineering development of IP </li></ul></ul><ul><li>No Defined IP Strategy </li></ul><ul><ul><li>Do not have an IP Strategy </li></ul></ul><ul><ul><li>Do not link their IP Strategy to their business strategy </li></ul></ul>
    37. 37. Definitions <ul><li>Intellectual Capital : Knowledge that can be used to create value. </li></ul><ul><li>Intellectual Assets : Codified </li></ul><ul><li>knowledge that can be used to create value. </li></ul><ul><li>Intellectual Property : Legally protected intellectual capital. </li></ul>
    38. 38. Definitions <ul><li>Knowledge Management/ Intellectual Capital Management : the process by which an organisation or society generates wealth from its knowledge or intellectual capital. </li></ul><ul><li>Intellectual Asset Management : the above process for codified assets. </li></ul><ul><li>Intellectual Property Management : the above process for legally protected assets. </li></ul>
    39. 39. A View of Intellectual Capital Intellectual Property Intellectual Assets Knowledge & Know-How INTELLECTUAL CAPITAL
    40. 40. When legally protected these are Intellectual Property When codified these are Intellectual Assets The Components of Intellectual Capital: A Spectrum of Knowledge Assets Source: PricewaterhouseCoopers Most Tangible Least Patents Trademarks Publishing Rights Brand logos designs Copyrights Information Databases Industrial Design Software Platforms Trade Secrets Confidential Information Technology Structural Capital Know-How Customer Capital Unpatented Research Knowledge Providing Value Human Capital Culture
    41. 41. What are They Buying? © Frank Lynn & Associates, IDC Source: IDC, High Performance Partnering Workshops Whole Product Offering Post-Sales Support Transactional Support Pre-Sales Support Integration Services Software Consulting Hardware The Product
    42. 42. Elements of the whole product <ul><li>Consulting services </li></ul><ul><li>System hardware </li></ul><ul><li>System software </li></ul><ul><li>Development tools </li></ul><ul><li>Server applications </li></ul><ul><li>Application development/ modification services </li></ul><ul><li>PC/client hardware </li></ul><ul><li>Desktop applications </li></ul><ul><li>LAN products </li></ul><ul><li>WAN connectivity products </li></ul><ul><li>Systems integration services </li></ul><ul><li>Training services </li></ul><ul><li>Maintenance/support services </li></ul><ul><ul><li>Server hardware </li></ul></ul><ul><ul><li>Client hardware </li></ul></ul><ul><ul><li>Software </li></ul></ul><ul><ul><li>Network </li></ul></ul>© IDC Source: IDC, High Performance Partnering Workshops
    43. 43. Focus on Policy Formulation: Business Management Enterprise Governance Policy Performance Strategy Operations Management Board / CEO Functional Managers General Managers
    44. 44. Vision-directed and Values-driven: The management of a business enterprise requires the strategic navigation of the macro-economic environment of the business. It demands that all executives understand the performance levels, trends, risks, opportunities, and threats that define the external context of business operations. It also demands that executives know how external change will influence the direction of their past business choices and what flexibility they have in decision-making to make choices that drive the business toward its agreed-upon vision and exercises the desired values for cultural behavior. In search of potential strategic inflection points How will technology advances drive your business? World of Facts Scenario Options World of Possibilities Values Vision Business Case Politics Regulations Economics Technology Environment Market Research Technology Assessment Competitive Analysis Strategic Benchmarking Customer Analysis Business Performance Critical Assumption Evaluation Discontinuity Analysis Strength-Weakness-Opportunity-Threat Analysis Enterprise
    45. 45. <ul><li>“ Strategy doesn’t come from a calendar-driven process; it isn’t the product of a systematic search for ways of earning above average profits; strategy comes from viewing the world in new ways. Strategy starts with an ability to think in new and unconventional ways.” </li></ul><ul><li>Gary Hamel </li></ul><ul><li>consultant, academic and author </li></ul>
    46. 46. Why have a strategy? 1. To make choices
    47. 47. Reasons to have a strategy: 2 . To be able to change it
    48. 48. What is a “strategy” anyway?
    49. 49. <ul><li>What is it? </li></ul><ul><li>A defining statement containing the intent and direction of the corporation, & delineating the strategic plans to achieve its objective. </li></ul><ul><li>A living guideline, that focuses and directs efforts of the corporation. </li></ul><ul><li>Constantly tested and modified as required. </li></ul><ul><li>Not to be circumvented without deliberate modification. </li></ul><ul><li>Balances and integrates the following elements: </li></ul><ul><li>Vision of strategic direction for long-term strength </li></ul><ul><li>Market direction and needs </li></ul><ul><li>Competitive effects </li></ul><ul><li>Technology strategy </li></ul><ul><li>Product strategy </li></ul><ul><li>Core competency </li></ul><ul><li>Resource alignment </li></ul>Corporate Strategy: Articulates the ways in which the opportunities created by the firm’s capabilities can be exploited.
    50. 50. Basic Strategic Considerations: <ul><li>Key Inputs to Strategy: </li></ul><ul><li>Customer inputs – what is working and not working. </li></ul><ul><li>Market place analysis – growing needs, emerging applications and significant trends. </li></ul><ul><li>Competitive influences and barriers to entry. </li></ul><ul><li>Internal competency assessment regarding skills and ability. </li></ul><ul><li>Corporate business process benchmarking. </li></ul><ul><li>Business strategic inflection point analysis. </li></ul><ul><li>Resources available for commitment. </li></ul><ul><li>Key Outputs of Strategic Dialog: </li></ul><ul><li>Business strategy – goals and objectives of the organization. </li></ul><ul><li>Technology strategy – technologies to acquire or develop. </li></ul><ul><li>Marketing strategy – Why, where and how to focus on customers? </li></ul><ul><li>Product strategy – features and functions to be developed. </li></ul><ul><li>Intellectual property strategy – How will IPR contribute to strategy? </li></ul>
    51. 51. Effective Business Strategies address three key challenges: Technologies Markets How will we create value? How will we capture value in the face of Competition? How will we build the organizational capabilities necessary to deliver it?
    52. 52. Effective strategies answer three key questions: How will we Create value? How will we Capture value? How will we Deliver value?
    53. 53. <ul><li>How will we create value? </li></ul><ul><ul><li>How will the technology evolve? </li></ul></ul><ul><ul><li>How will the market change? </li></ul></ul><ul><li>How will we capture value? </li></ul><ul><ul><li>How should we design the business model ? </li></ul></ul><ul><ul><li>Where should we compete in the value chain ? </li></ul></ul><ul><ul><li>How should we compete if standards are important? </li></ul></ul><ul><li>How will we deliver value? </li></ul><ul><ul><li>How do we manage the core business and growth simultaneously? </li></ul></ul><ul><ul><li>How do we use our strategy to drive real resource allocation? </li></ul></ul>And answer seven critical questions:
    54. 54. Creating Value: <ul><li>Understand how technologies will evolve </li></ul><ul><ul><li>(Both your own and those on which you rely) </li></ul></ul><ul><li>Understand how customer needs will evolve </li></ul><ul><li>Develop world class products and services that meet customer needs </li></ul>
    55. 55. Factors Driving IP Value <ul><li>Time Savings (know how) </li></ul><ul><li>Cost Savings (formula) </li></ul><ul><li>Risk </li></ul><ul><li>Profits Advantage (patent) </li></ul>
    56. 56. Intellectual Property Profit Sources <ul><li>Premium Sales Price </li></ul><ul><li>Cost Savings </li></ul><ul><li>Volume Synergy </li></ul><ul><li>New Revenue Streams </li></ul>
    57. 57. IP Requires Old Economy Assets <ul><li>IP commercialization and the realization of value is not possible without complementary assets . </li></ul>
    58. 58. The Interaction of Intangible and Tangible Assets to Create Earnings $ Structural Capital (generic) Complementary Business Assets (differentiated) Intellectual Capital (unique) Value Creation Value Extraction Sales Force Distribution Capabilities Manufacturing Facilities Human Capital Intellectual Assets Intellectual Property
    59. 59. Intellectual Property Tuned To A Company’s Business Structural Capital (Generic Assets) Intellectual Assets Complementary Business Assets (Differentiated Assets) Distribution Capabilities Sales Force Manufacturing Facilities Intellectual Capital (Unique Assets) Value Creation Value Extraction Human Capital (Lead Time) <ul><li>IP Value Is Created When Leveraged Through Complementary Assets </li></ul><ul><li>When Companies Have Different Complementary Asset Strengths They Will Need Different Intellectual Property (Materials, Process, Use) </li></ul>Know-How Intellectual Property Trade Secrets Copyrights Trademarks Patents ?% $
    60. 60. Intellectual Property Tuned To A Company’s Business Beverage Companies Structural Capital (Generic Assets) Intellectual Assets Complementary Business Assets (Differentiated Assets) Distribution Capabilities Sales Force Manufacturing Facilities Intellectual Capital (Unique Assets) Value Creation Value Extraction Human Capital (Lead Time) <ul><li>Line Shows the Percentage of Company Value (Market Capitalization) That is Protected By This Asset </li></ul><ul><li>Most value is in Trademark, Trade Secret, Distribution and Sales </li></ul>Know-How Intellectual Property Trade Secrets Copyrights Trademarks Patents $
    61. 61. Intellectual Property Tuned To A Company’s Business Paper Companies Structural Capital (Generic Assets) Intellectual Assets Complementary Business Assets (Differentiated Assets) Distribution Capabilities Sales Force Manufacturing Facilities Intellectual Capital (Unique Assets) Value Creation Value Extraction Human Capital (Lead Time) <ul><li>Most value is in Trademark, Know-How, Manufacturing and Sales </li></ul><ul><li>Some value in Patents </li></ul>Know-How Intellectual Property Trade Secrets Copyrights Trademarks Patents $
    62. 62. Intellectual Property Tuned To A Company’s Business Software Companies Structural Capital (Generic Assets) Intellectual Assets Complementary Business Assets (Differentiated Assets) Distribution Capabilities Sales Force Manufacturing Facilities Intellectual Capital (Unique Assets) Value Creation Value Extraction Human Capital (Lead Time) <ul><li>Most value is in Human Creativity, Trademark, Copyright, and Distribution </li></ul>Know-How Intellectual Property Trade Secrets Copyrights Trademarks Patents $
    63. 63. Intellectual Property Tuned To A Company’s Business Pharmaceutical Companies Structural Capital (Generic Assets) Intellectual Assets Complementary Business Assets (Differentiated Assets) Distribution Capabilities Sales Force Manufacturing Facilities Intellectual Capital (Unique Assets) Value Creation Value Extraction Human Capital (Lead Time) <ul><li>Most value is in Human Creativity, Patents, and Trademarks </li></ul><ul><li>Some value in Know-How, and Sales </li></ul>Know-How Intellectual Property Trade Secrets Copyrights Trademarks Patents $
    64. 64. How shall we capture value? <ul><li>Uniqueness </li></ul><ul><li>Complementary Assets </li></ul><ul><li>Structure of the Value Chain </li></ul>
    65. 65. Three key ideas: <ul><li>Uniqueness </li></ul><ul><ul><li>Controlling the knowledge generated by an innovation </li></ul></ul><ul><li>Complementary assets </li></ul><ul><ul><li>Controlling the assets that maximize the profits from innovating </li></ul></ul><ul><li>Understanding the dynamics of the value chain </li></ul><ul><ul><li>Should we buy our suppliers? Distributors? </li></ul></ul><ul><ul><li>Should we outsource our manufacturing… distribution… sales… capability? </li></ul></ul>
    66. 66. What are Complementary Assets? <ul><li>Those assets that allow a firm to make money, even if the innovation is not unique: </li></ul><ul><li>The answer to the question: </li></ul><ul><ul><li>If our innovations were instantly available to our competitors, would we still make money? Why? </li></ul></ul>
    67. 67. In the best case, complementary assets should be tightly held <ul><li>Complementary assets that are tightly held are not easily available to entrants or to most competitors </li></ul>
    68. 68. Types of Complementary Assets Competitive manufacturing Sales and service expertise Brand name Distribution channels Customer relationships Complementary technologies Core technological know-how in innovation Other Other COMPETENCIES Things you can do Things you own RESOURCES
    69. 69. Types of Complementary Assets Complementary assets can be: Generic there is adequate and competitive supply Specialized sourcing will create unilateral dependence Co-specialized both supplier and innovator are dependent
    70. 70. Types of Complementary Assets <ul><li>Things you can do </li></ul><ul><ul><li>Manufacturing capabilities </li></ul></ul><ul><ul><li>Sales and service expertise </li></ul></ul><ul><li>Things you own </li></ul><ul><ul><li>Brand name </li></ul></ul><ul><ul><li>Distribution channels </li></ul></ul><ul><ul><li>Customer relationships </li></ul></ul>COMPETENCIES RESOURCES
    71. 71. Complementary Assets <ul><li>Bargaining power of owners of complementary resources depends upon whether complementary resources are generic or specialized . </li></ul>M anufacturing Distribution Service Complementary technologies Other Other Marketing Finance Core technological know-how
    72. 72. Uniqueness & Complementary Assets over the Life Cycle Ferment Takeoff Maturity Uniqueness Complementary Assets
    73. 73. Uniqueness & Complementary Assets over the Life Cycle: Ferment Takeoff Maturity Uniqueness Complementary Assets
    74. 74. Managing discontinuities means managing complementary assets: Performance Time Ferment Takeoff Maturity Discontinuity Which of my complementary assets are useful?
    75. 75. Key Questions: <ul><li>When should an entrepreneurial firm develop it’s own: </li></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Sales </li></ul></ul><ul><ul><li>… .. capabilities? </li></ul></ul><ul><li>When should a mature firm outsource it’s: </li></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Sales </li></ul></ul><ul><ul><li>… .. capabilities? </li></ul></ul>
    76. 76. The eleven modes of cooperation agreements: illustration of their anchor points Source: S. Urban, S. Vendemini, CESAG, Strasbourg Ways of... designing s upplying p roducing m arketing d elivering Know-how transfer contract Research contract Common Research Common purchase Subcontracting Engineering contract Patent licence Common production Trademark licence Consortium (common marketing) Distribution agreements
    77. 77. Source: S. Urban, S. Vendemini, CESAG, Strasbourg Cooperations modes and value chain Services <ul><li>After sale </li></ul><ul><li>Lobbying </li></ul><ul><li>Relations </li></ul>Distri-bution <ul><li>Reciprocal distribution agreements (access to existing distribution networks) </li></ul>Marke-ting <ul><li>Trademark licence </li></ul><ul><li>Consortium (common marketing) </li></ul><ul><li>Joint advertising </li></ul>Produc-tion <ul><li>Subcontracting agreements </li></ul><ul><li>Common manufacturing agreements </li></ul><ul><li>Implementation of engineering contracts </li></ul><ul><li>Patent license </li></ul><ul><li>Production consortium </li></ul>Logistic supply <ul><li>Common purchases </li></ul><ul><li>Access to the specific resources of the country (raw materials, subventions, capital cost, compared advantages) </li></ul>Link of the chain Coope - r ation modes R&D <ul><li>Exchanges of existing knowledge </li></ul><ul><li>Organisation of a common research </li></ul><ul><li>Setting up of a common project (design, engineering) </li></ul>
    78. 78. New Business Models Emerge Then… One Integrated Company Now… Many Distributed Companies Product Development Cycle Product Development Tool Companies Testing Services CRO’s CRM’s
    79. 79. New Regional Model Emerge Then… Manufacturing Research Development Trials/Testing Services Self-contained regional clusters Region A Region E Region B Region F Region D Region C Region G Now… Specialized, networked regions
    80. 80. Build, Buy, Partner: Benefits and Tradeoffs Build Buy Partner Time to Market & Control & Profit Cost & Risk Most product control Own the IP Most profit opportunity Longest time to market Risk in market shifts High development costs Highest switching costs Pros Cons Shorten time to market Own the IP Acquisition costs Integration costs Least Control Integration Costs Shared gross margins - Least Profit Opportunity Shortest Time to Market Conserves Resources Try before you Buy Lowest Switching Costs Credibility and access
    81. 81. Why Build: Technology Leadership <ul><li>Pioneer in the field </li></ul><ul><li>Patentable technology </li></ul><ul><li>Need to own the intellectual property </li></ul><ul><li>Core business </li></ul><ul><li>Have time or can build in increments </li></ul><ul><li>Have in-house expertise </li></ul>
    82. 82. Why Buy: Core to business <ul><li>Core to business </li></ul><ul><li>Need intellectual property </li></ul><ul><li>Time critical </li></ul><ul><li>Shortage of in-house expertise </li></ul><ul><li>Acquire market leadership </li></ul>
    83. 83. Why Partner: Speed <ul><li>Fastest Time to Market </li></ul><ul><li>Reduce Risk </li></ul><ul><li>Leap Frog Competition </li></ul><ul><li>Customize for Specific Markets </li></ul><ul><li>Customers buy best of breed </li></ul>
    84. 84. Which horse to pick? Build Buy Partner Leadership Core Business Time to Market Reduce Risk
    85. 85. Familiarity Matrix: Optimum Strategies for Technological Innovation: Finding others who know more about the markets or the technology Decreasing knowledge of the technology Decreasing knowledge of the market Internal Development, Acquisition, or Joint Venture Joint Venture Internal Development Venture Capital or Educational Acquisition Internal Venture or Acquisition or License Internal project, or Acquisition, or License Venture capital, or Educational Acquisition, or University Relationship Venture Capital or Educational Acquisition Joint Venture, Strategic Alliance or University Relationship
    86. 86. New developments in innovation raises new issues and problems <ul><li>Greater emphasis on commercializing scientific discoveries , particularly in IT and the bio-sciences </li></ul><ul><li>Speed and potential value of scientific progress leads to emphasis on solid and well-designed portfolios of research projects </li></ul><ul><li>Universites as active drivers of innovation: Academic entrepreneurship and the entrepreneurial university </li></ul><ul><li>University-industry partnerships </li></ul><ul><li>Increased search for radical innovation and top-line growth. </li></ul>
    87. 87. Commercialization Model <ul><li>Strategic Investment is the Foundation of a Successful Commercialization Model </li></ul>
    88. 88. ‘ Opening up’ of industrial research process R&D Lab of company X Firm X Developing technological core competences within the company X University-industry cooperation Firm’s own research lab Public-private partnership High-tech SMEs Pre-competitive R&D with competitors Value creation: products, processes etc Worldwide search and evaluation of technology and knowledge New firms, spin-offs Firm X itself Joint ventures Licensing technologies <ul><li>‘ Open innovation’ Research Campus, with </li></ul><ul><li>Venturing </li></ul><ul><li>‘ Incubator’ </li></ul><ul><li>Technology transfer and support, … </li></ul>“ Exploring wider range of knowledge areas” Creating more value faster “ More focus and resources for firm’s own competences” Nothing In the past
    89. 89. Addenbrooke’s Hospital Cambridge Biotechnology Northern Venture Managers Cambridge University Pfizer Lorantis Cambridge Antibody Technology Domantis Abbott Eli Lilly Astex Daniolabs Neurodegeneration Consortium Gateway Fund Biotica Babraham Bioincubator Babraham Technix Babraham Bioscience Inst Technologies Ltd Wellcome Trust Wyeth Amgen AstraZeneca Cambridge Crytallographic Data Centre GlaxoSmithKline Gilead Sciences (joint venture) (Cambridge University administered) Institute for Medical Research Challenge Fund Founders came out of Pfizer macrolide templates Vistide out-license Hepsera out-license virtual screening collaboration (Cambridge University) (funding) partnership arthritis collaboration (funding) licensing licensing Genzyme antibodies license validation (funding)
    90. 90. The New Paradigm for Innovation “ Open innovation…assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.” Henry Chesbrough, Open Innovation: Researching a New Paradigm
    91. 91. The Key is Collaboration <ul><li>“ Few if any companies today can hold all the pieces of their own product technology…they simply must collaborate with others if they want to survive and prosper… IP has become much more of a bridge to collaboration” </li></ul><ul><li>Marshall Phelps, Microsoft </li></ul>
    92. 92. Open Innovation – buying in ideas or products to add to your model Revenues Costs Market Revenues Market Revenues Market Revenues Internal Development Internal Development Internal & External Shared Development Sell Divest Spin off License Shorter Product Life Cycle Increasing costs Decreasing costs New Revenue Sources Golden Past Past Present Present Future
    93. 93. ‘ Closed innovation single track’ “ Ideas & “ Current Market Place” Research Development Commercialisation Investigations” Based upon ‘Open Innovation: Researching a New Paradigm’ (2006) Henry Chesbrough, Wim Vanhaverbeke & Joel West 1 2 3 4 5
    94. 94. ‘ Open innovation three lane highway’ “ Ideas & “ Current Market Place” Research Development Commercialisation Investigations” “ New Market Place” “ Other firm’s Market Place” “ External Ideas & Investigations” licensing “ External Technologies Technology spin-offs Insourcing gate Outsourcing gate Based upon ‘Open Innovation: Researching a New Paradigm’ (2006) Henry Chesbrough, Wim Vanhaverbeke & Joel West 1 2 3 4 5
    95. 95. IP model enabling “Open Innovation” <ul><li>R&D on generic technologies </li></ul><ul><li>Industry value chains brought together </li></ul><ul><li>Partners collaborate and contribute ideas </li></ul>
    96. 96. A Network View of Innovation <ul><li>Depending on a firm’s strengths, different firms play different roles in open innovation value chain </li></ul><ul><li>Some firms generate innovations </li></ul><ul><li>Some integrate the innovations of others </li></ul><ul><li>Some have a fully integrated model </li></ul><ul><li>An open innovation system is a networked system </li></ul>
    97. 97. From a network IN an organization …. To the network IS the organization Hierarchy Matrix Network
    98. 98. TYPES OF NETWORKS <ul><li>Task Networks: involve the exchange of specific job-related resources including information, expertise, professional advice, political access, and material resources. </li></ul><ul><li>Social Networks: involve relationships characterized by higher levels of closeness and trust than those that are exclusively task-related. They usually consist of people who share a common background or interest. Since people have more leeway in choosing their friends than their co-workers, these networks tend to be less closely determined by formal organizational arrangements and work assignments. Social networks, however, often play a critical role in mobilizing resources, transmitting information, and providing peer coaching. </li></ul><ul><li>Innovation Networks must combine both! </li></ul>Thanks to H. Ibarra
    99. 99. TYPES OF RELATIONSHIPS <ul><li>It is important to cultivate a broad range of network relationships! </li></ul><ul><li>Long-term, high reciprocity (Strong) ties: Close bonds and reciprocal relationships ensure reliability under conditions of uncertainty. These include peer alliances that function by exchange of favors, ties of trust and loyalty between superiors and subordinates, and career development ties between mentors and proteges. </li></ul><ul><li>Short-term, instrumental ties: Many important ties such as highly circumscribed job-related connections, are often dissolved when the relationship has served its purpose. Some are with individuals the manager may not even like, but must interact with to get things done. </li></ul><ul><li>Distant Acquaintances (Weak ties): These types of relationships are important because they function as bridges between the manager and distant social or organizational groups. As a result, they are often sources of unique or novel pieces of information. A networking strategy that does not take these into account leaves a manager open to the risk of developing an inbred network that will not provide information on external opportunities or threats. </li></ul>
    100. 100. Raufoss – Light Metal Industry <ul><li>From an integrated and closed corporation to dynamic cluster </li></ul><ul><ul><li>RA (Raufoss Ammunition Company) 1897 </li></ul></ul><ul><ul><li>Gradual growth of civil production in light metal </li></ul></ul><ul><ul><li>Gradual growth of global customers (automotive) </li></ul></ul><ul><li>From national customers to global customer </li></ul><ul><li>From closed innovation to open innovation </li></ul><ul><li>Challenges for relations and communications </li></ul>
    101. 101. From RA via Industrial Park to a Dynamic Cluster ? RA Phase 1 1896-1997 Raufoss HARA Phase 2 1997-2003 Nammo Fission Phase 3 2004- HARA Nammo Integrated company Reintegration ? Fragmentation Dynamic cluster?
    102. 102. Technology - Aircraft <ul><li>Boeing Co - The first mass jetliner - the 707. </li></ul><ul><li>98% made in the US 1950’s - 60’s. 20 th c. </li></ul><ul><li>The 787 - Dreamliner - 21st c. </li></ul><ul><li>70% outsourced to 900 contractors </li></ul><ul><li>Half made by contractors outside the US - primarily Japan and Italy but also China (rudder). </li></ul><ul><li>Boeing does the final assembly. </li></ul><ul><li>Boeing maintains the overall IP – it’s their innovation. </li></ul><ul><ul><li>Without Open Innovation and strong IP the above process </li></ul></ul><ul><ul><li>could not happen. </li></ul></ul> Boeing Co.
    103. 103. Boeing - the platform Co.
    104. 104. Some cross-sector ‘platform’ candidate innovation biographies in firms & regions arising from WP3
    105. 105. Firm Level Innovation Biographies
    106. 106. Hierarchy of IP Value Protecting Inventions Manage Competition Design Freedom Build Markets and Relationships Deliver Revenue Potential Return Biz Strategy Driver
    107. 107. Building an IP Strategy <ul><li>Build Your Portfolio </li></ul><ul><ul><li>Strategic Patenting </li></ul></ul><ul><ul><li>Purchase Patents </li></ul></ul><ul><ul><li>Deploy Your Portfolio </li></ul></ul><ul><ul><li>Design Freedom </li></ul></ul><ul><ul><li>Manage Competition </li></ul></ul><ul><ul><li>Enter new Markets </li></ul></ul><ul><ul><li>Deliver Revenue </li></ul></ul>Protecting Inventions/Recognition Manage Competition Design Freedom Markets Development Deliver Revenue Biz Strategy
    108. 108. A Hierarchy of IP/IC Management Cost Control (Control Costs, Improve Productivity) Profit Center (Manage for Profitability) Integrated (Manage for Growth) Visionary (Drive Growth) Defensive (Build Portfolio, Protect Markets and Technology)
    109. 109. IP Culture - Levels of companies Ground Floor Second Floor Third Floor Penthouse Basement Total Integration Profit Generation Cost Savings Defensive Unprotected Penthouse Integration Third floor Profit Second floor Savings Ground floor Defensive Basement Unprotected
    110. 110. 0 - Unprotected level They rely on confidentiality, access to complementary assets and lead time advantages Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected How businesses behave at the various levels ?
    111. 111. 1 - Defensive level <ul><li>Activities of the company focus on: </li></ul><ul><li>- Creating awareness of the role of intellectual property </li></ul><ul><li>Obtaining intellectual property </li></ul><ul><li>Maintaining IP rights </li></ul><ul><li>- Respecting IP rights (esp. Patents) </li></ul><ul><li>of others (Freedom to Operate) </li></ul><ul><li>- Willingness to enforce patents, when </li></ul><ul><li>necessary </li></ul>Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    112. 112. 2 - Cost Savings Level The activities of the company : Focus on how to reduce costs of filing/maintaining intellectual property portfolio Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    113. 113. 3 - Profit Generation Level The activities of the company focus on: - Making intellectual property a profit center - Utilizing the intellectual property portfolio as a corporate asset - Extracting value directly from intellectual property portfolio - Non-core, non-strategic IP having tactical value Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    114. 114. 3 - IP for Profit Level <ul><li>Company activities: </li></ul><ul><li>- Considers intellectual property at all levels of organization </li></ul><ul><li>Organises high profile campaign against infringers </li></ul><ul><li>- Develops active patent/trademark </li></ul><ul><li>licensing program </li></ul><ul><li>Makes more good sense oriented R&D efforts </li></ul><ul><li>begins/improves active screening/watches for patent infringement </li></ul>Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    115. 115. 3 - IP for Profit Level <ul><li>- Establishes an enforcement program, it </li></ul><ul><li>ensures that no one infringes your patents </li></ul><ul><li>Requires constant policing and monitoring </li></ul><ul><li>of the market in order to challenge infringing </li></ul><ul><li>products </li></ul><ul><li>Enforcement function includes method of </li></ul><ul><li>negotiation so company can suppress infringement without having to engage in litigation </li></ul><ul><li>- In tough cases, is prepared to litigate against infringers </li></ul>Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    116. 116. 3 - IP for Profit Level <ul><li>Licensing </li></ul><ul><li>Starts/increases proactive licensing </li></ul><ul><li>program </li></ul><ul><li>Finds opportunities to generate revenue without sacrificing competitive advantage </li></ul><ul><li>Begins by licensing non-core technologies or technologies outside current field of products </li></ul><ul><li>Finds appropriate licensees (potential </li></ul><ul><li>infringers) </li></ul>Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    117. 117. 4 - IP Integration level <ul><li>The company: </li></ul><ul><li>Sets long term patent strategy </li></ul><ul><li>- Aligns IP strategy with itscorporate strategy </li></ul><ul><li>- Makes competitive assessment </li></ul><ul><li>Focuses on strategic value extraction </li></ul><ul><li>Develops a performance measurement </li></ul><ul><li>and reporting system </li></ul><ul><li>- Ensures that patent strategy drives research </li></ul>Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected
    118. 118. Organization of IP Department <ul><li>Other factors that affect the decision: </li></ul><ul><ul><li>Objectives set for the IP Department </li></ul></ul><ul><ul><li>Importance of the IP Dept in the company </li></ul></ul><ul><ul><li>Strategic placement inside the organigram </li></ul></ul><ul><ul><li>Competitive Strategy of the Company </li></ul></ul><ul><ul><li>Type of Technology (Mature or Radical) </li></ul></ul><ul><ul><li>Type of Market served by the Company </li></ul></ul>
    119. 119. TOP MANAGEMENT CEO technical dpt marketing dpt commercial dpt legal dpt Intellectual property TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO commercial dpt TOP MANAGEMENT CEO commercial dpt TOP MANAGEMENT CEO Organization of an IP Department
    120. 120. <ul><li>It is a company having a defensive stance </li></ul><ul><li>IP department takes </li></ul><ul><ul><li>No autonomous decisions </li></ul></ul><ul><ul><li>No autonomous strategy </li></ul></ul><ul><li>It receives guidelines from the department to which it is attached </li></ul>Organization of an IP Department
    121. 121. TOP MANAGEMENT CEO Technical dpt marketing dpt legal dpt TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO commercial Dpt technical dpt Intellectual Property Dept Other Departments Organization of an IP Department
    122. 122. <ul><li>It is a company of the multinational type, </li></ul><ul><ul><li>leading on the market </li></ul></ul><ul><ul><li>having large dimensions </li></ul></ul><ul><li>The IP department has autonomous decisional power and defines strategies </li></ul><ul><li>There exists a Director for IP , sometimes at Vice- President level </li></ul>Organization of IP Department
    123. 123. Organization of IP Department Directorate IP Secretariat strategies documentation patents trade marks professional administrative professional administrative Licensing + litigation Internal structure of IP dept
    124. 124. Use of patents Is it core Business? Obligation to licence? Licence at market conditions Licence at disadvantageous conditions Use of patents Is it core Business? Use of patents Use of patents Obligation to licence? Use of patents Use of patents Use of patents Use of patents Obligation to licence? Use of patents Offensive attitude yes no no Coop. agreements compulsory licences at favorable conditions Organization of IP Department yes Decision process in large companies Obligation to licence? yes Obligation to licence? yes Obligation to licence? yes compulsory licences at favorable conditions Obligation to licence? yes compulsory licences at favorable conditions Obligation to licence? yes Coop. agreements compulsory licences at favorable conditions Obligation to licence? yes Coop. agreements compulsory licences at favorable conditions Obligation to licence? yes Coop. agreements compulsory licences at favorable conditions Obligation to licence? yes Coop. agreements compulsory licences at favorable conditions Obligation to licence? yes Coop. agreements compulsory licences at favorable conditions Obligation to licence? yes Licence at disadvantageous conditions yes Licence at conditions below market yes
    125. 125. Organization of IP Department Use of patents Obligation to licence? yes compulsory licences at favorable conditions Coop. agreements Offensive attitude Licence at conditions below market Decision process in a small company