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IP Strategies in « Open Innovation » world


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Florin Paun, Deputy Director Industrial Innovation, ONERA - ‘The French Aerospace Lab’®

Speaker Presentation at the ECC & IP Law Summits in 23-24 November 2015 in Grande Real Villa Itália, Cascais

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IP Strategies in « Open Innovation » world

  1. 1. IP Strategies in « Open Innovation » world Florin Paun Deputy Director Industrial Innovation ONERA - ‘The French Aerospace Lab’® © - Florin Paun, 2015 Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.
  2. 2. Fundamentals : Innovation What is the INNOVATION?  INNOVATION = CREATIVITY + VALUE « Successful Exploitation of a New Idea » E. von Hippel, Harvard, MIT What means VALUE ?  Commercial, Capital, Access to Resources (Capacities), Human Capital  Material vs Intangible Assets (IP?,… Information?, Stress Avoidance?,…) Monetising?  Implement Mechanisms producing Recursive Causalities (E. Morin) on the 4 value related categories (e.g. stress avoidance create time) © - Florin Paun, 2015, Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur. Dynamic Capabilities- A. Sen TM Direct- see RyanAir Non direct- see electric cars plug
  3. 3. Fundamentals : Innovation « Successful Exploitation of a New Idea » E. von Hippel, Harvard, MIT What means COLLABORATIVE INNOVATION? Same Process … not alone  Someone else for getting together to create value by :  producing NEW IDEAs  EXPLOITING with SUCCES while  sharing RISK  sharing BENEFITS © - Florin Paun, 2009, Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.
  4. 4. Challenges- Concomitancy and Innovation Occurrence Innovation Distribution Channel ; Study case – Commercial Aircraft Passenger Airline Aircraft Manufacturer Development Office Corporate Research Center R&D Centers (Applied R&D) Universities (Basic R&D) ßValue input (100) Air France, Lufthansa... Airbus, Boeing,... (<7) Deciders for Technology (System architect) Technology providers Onera, DLR, Universities Vertical competition Horizontal competition Critical - Strategic Partnership (IP exclusivity) Competitive Advantages (quality, costs, time, IP exclusivity) historically © - Florin Paun, 2015 Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.
  5. 5. Challenges - Concomitancy and Innovation Occurrence Fondamentals – from Value Distribution Channel Low Cost PaxCharter Pax Cargo Str. Partner. Co-Dev. Tiers i R&D Passenger Airline Dev. Basic R&D Tiers j R&D Technology Innovation  To Value Distribution Tree  To Value Distribution Interconnected “Mangrove Forest” T I C © - Florin Paun, 2015 Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.
  6. 6. How to…? - Concomitancy and Innovation Occurrence Fondamentals – from Value Distribution Channel Life in Mangrove Forest - How to see beyond your « radar » the emergent technologies impacting your business core faster then your own product/service development time?  Sentinels vs Predators  Detecting and Closing deals 10x faster - First in Market and take it all ?!  a new world of Instruments vs Rules  are you ever really sure you’re not infringing others IP?  build Value Proposition based on IP strategy not only portofolio… - How to distribute the created Value  Track and Deal the related IP - With whom? Hybrid Humans! © - Florin Paun, 2015 Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.
  7. 7. Prof Henry Chesbrough UC Berkeley. Open Innovation : Renewing Groth From Industrial R & D, 10th Annual Innovation Convergence, Minneapolis Sept 27, 2004 How to…? Winning Speed Open Innovation © - Florin Paun, 2015 Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.
  8. 8. deal deal deal deal deal deal Open Innovation ≠ Open bar sur la PI  Deals & Deal Makers - Detecting & Transactionning the IP ; Tech Scouters, Juristes, Acheteurs, Managers,… In Practice : How to proceed and with whom? How and What to Deal? ProfHenryChesbroughUCBerkeley.OpenInnovation: RenewingGrothFromIndustrialR&D,10thAnnualInnovation Convergence,MinneapolisSept27,2004 Tools to accelerate
  9. 9. 9 Accelerate  Using of “Time 2 market – Complexity” Limit while Getting outside the Open Innovation Funnel Time to Market ProductComplexity(Costs) Bio-genetics Pharmacy Aerospace and Defence Automotive Informationand Telecommunication Diagram by R Stephan UTC Limits by Authors © - Florin Paun 2015 Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur.  SMEs – good vectors for technology demonstration in all domains  Disruptive/Radical Innovation  Get out of its sector, addressing reduced T2Mkt domains Leosphere
  10. 10. First Sales Commercialisation ; Marketing, Promotion... Investment + Time (TRL) Death Valley Nombre d’Idées 1000 100 10 2-3 1 1 Potentiel Product Fondamentals : Positioning on the TRL Risk Level Entre-Intra Preneur “Best Technology Values Nothing without the right Carrier” R Katz
  11. 11. In Practice : How to proceed and with whom? Collaborative Innovation  Create value together with the others - How many of you have R&D partners  bring New Ideas in TechPush - How many of you have dedicated efficient tools for EIS (VIE)  bring New Ideas in MarketPull - How many of you have Strategic Road Maps? Yours or Customers’? - if they fail in their predictions? - How many of you have active Procurement Management within the Supply Chain? - Risk Sharing & Ideas? Benefits? - How many of you have an efficient tool to involve other SMEs ≠ Supply Chain - How to “see” beyond your own “perception” ? - How many of you posses or share Tools like : Incubators, Corporate Venture Capital, SME Cluster  Supply Chain?
  12. 12. Large Industrials out of Road Map Technology Scouting global disruptions, other domains,… TRL 1 2 9 SMESME with Develop. Offices SME with R&D capacities Large Industrials within Strategic Road Map Start-up Start-up on niched market Venture on big markets Proof of Concept Technology Démonstrator PublicR&D AppliedR&D,Carnot,Fraunhofer… I I I I I I I IRT Large indust. et suppliers SATT Venture/Licence. ONERA-Tech/Capital Parteneurial Ecosysteme Venture/Licence for Large Ind. & TPE/Start-up  for niche ©-FlorinPaun,2014, Cedocumentetl’informationcontenuesontlapropriétédeFlorinPaun. Toutereproductionestinterditesansl’accorddel’auteur. Gates to get into the Open Innovation Funnel – TRL Positionned Confidentiel Inputs ; R&D consortium (R&D) ; R&D contracts (R&D, methods + supply?) ; Venture/Licence (Program Manager, Supply Chain) ASYMETRIES to be Compensate
  13. 13. How to deal on the « IP Market Price » ? Excepting BioMed and ICT 1) Approach by the Costs Dedicated Development  expenses + margin+ (loss) if exclusivity or competition TT Opportunity Sale  20-30% from expenses + margin + eventual loss  Price & Conditions (Sale vs Partnership) by approach 1 1) Approach by the market 1) Turnover (Estimated and Mkt studies and Business Plan – Csec) 2) Estimated Margin (15% for high tech – 6-9 % if Large Industrial) 3) IP priced at approximately 1/3 of the margin if exclusivity 4) Weighting the transferred IP rights within the full IP rights package  Price & Conditions (Sale vs Partnership) by approach 2 3) What the Client could really pay ? - What is the cost (time & money) to develop elsewhere? - Identify Criticity for your IP from technological discrimination perspective - Price to negotiate between price 1 & 2 with eventual staging/options - If impossibility ask yourself on the utility/necessity of the deal - The answer will be provided by the Technological (non) Discrimination
  14. 14. Method to hybridise MktPull & TechPush “What is the TRL level ?” - Customer Voice are sunken inside the TRL scale and our minds are Technology Push driven. - Why not referring to a scale related to the Degree of Maturity for the Expression of a Need by a customer?  Theorem : Invest in Projects which match at the DRL+TRL>9 ! DR Level Description for the Demand Readiness Level Description TRL level TR Level 1 Occurrence of a Feeling “something is missing” 2 Identification of a specific need Market certification and sales authorisation 9 3 Identification of the expected functionalities for the new Product/Service Product Industrialisation 8 4 Quantification of the expected functionalities Industrial Prototype 7 5 Identification of the systemic capabilities (including the project leadership) Field demonstration for the whole system 6 6 Translation of the expected functionalities into needed capabilities to build the response Technology development 5 7 Definition of the necessary and sufficient competencies and resources Laboratory demonstration 4 8 Identification of the Experts possessing the competencies Research to prove feasibility 3 9 Building the adapted answer to the expressed need on the market Applied research 2 Fundamental research 1 © - Florin Paun, 2011, Ce document et l’information contenue sont la propriété de Florin Paun. Toute reproduction est interdite sans l’accord de l’auteur. In Practice  Onera’s developed Tools
  15. 15. DRL TRL 9 9 R&T Interne / Externe avec Contrôle PI Investissement en Démo Tech. sur Licence Exclusive ou PI propre Venture/Licence/vente PI + TechTransfert Éventuel SWOT Tech/Marché - Recherche des Partenaires Pour application/ventes - Identifier des applications Recherche Applications- croisées + Promotion sur le marché PI (Patent Troll, Tech Platforms…) Business Plan/Model Produit/Service + SWOT Marché/Tech. Licence / Spin-off / Start-up 3 Fonctionnalités 6 Capabilités 3 Démo Lab 6 Demo Cond Opér. LimitedesVentes Activités relatives à l’acteur exploitant Activités relatives au Laboratoire R&T Transactions Activités à faire Limite des Transactions Limite entre le TechPush - MktPull Innovation Process Readiness Diagram© © Copyright - Florin PAUN & Philippe RICHARD, 2011 How to invest? (Analyse with the use of DRL)
  16. 16. Making it simple ?! Innovation typologies We had : We complete by simplified IPRD©: Old Technology New OldMarketNew Radical Innovation Radical Innovation Disruptive Innovation Incremental Innovation Low TRL High LowDRLHigh Market Pull Driven Innovation Tech. Push Driven Innovation Transaction Driven Innovation “Miracle” Unexpected High Risk Innovation © Copyright - Florin PAUN, 2011
  17. 17. 17 Risk sharing co-development contract French SME specificity : 95% < 50 employees Low Business Angels activity and Venture Capital culture  Low SME cash disposal for technological development projects Onera’s Proposed solution  Risk sharing co-development contract  Product Business Plan analysis  Onera investment for its own working program  Financial return based on the Product success (≠ subsidies, licenses…)  Global benefit on the co-development Onera’s budget Working Program- long term and high complexity  scientist consequent involvement Solution  Scientist migration from ONERA to the SME development team to compensate the socio-cultural asymmetry Need to Measure the SME interest - the best evidence > 5% of equity open for the scientist Spin-off 4 Spin-in new Employees Onera’s Charter In Practice  Onera’s developed Tools
  18. 18. 18  Assigning the role of “Cultural” Translator to the TTO  Shifting the TTO mission from “Look to my baby” to “I’m here to help you succeeding”  Shifting from Technology Push to Market Pull Onera’s solutions to compensate / reduce the Asymmetries  Onera-SME collaboration Charter Main objectives : - Favour access to Aerospace & Defence R&D results - Favour emergence of innovative proposals - Provide contract opportunities - Complies with Onera’s mission  provide economic growth CREATE “TRUSTFULL SPACES” (by “cognitive proximity” [Uzunidis])
  19. 19. 19 Fogale nanotech Onera et l’Open Innovation avec des PME et Start-ups 91 - « Wind » Lidar 31_EM environment simulation 91-LASER Interferometer Porous Ti bio-medical prosthesis Accelerometers MEMS Ship landing For UAVs 91-Medical Imagery Ultrasounds machining Capacitive sensors 78-ONERA’s software Crack tracking and detection 77-Projectile acoustic signature 31- Pressure Sensitive Paint 13- Green Aircraft/ Silent propeler UAVs NHEOLIS 13- Wind mill Sense and avoid Aviation system Adaptive Optics from space to eyes
  20. 20. ABERNATHY, WJ., UTTERBACK, JM., 1975, “A dynamic model of process and product innovation”. Omega. 1975; 3(6): 639–56. AIT-EL-HADJ, S., BRETTE, O., 2006, « L’apport de la science des systèmes techniques à la maitrise de la conception pour une systémique technologique appliquée » in « Innovation, management des processus et création de valeur », pages 67-83. CALAME, M., 2011, « Lettre ouverte aux scientifiques. Alternatives démocratique à une idéologie cléricale », pages 71-149 DENT ASSOCIATES, 2011, White Paper ( ) ECOLE DE L’INNOVATION, 2011, « Innovation dans les PME : la maturité commerciale et technologique guide le choix du contrat de partenariat technologique » in La lettre européenne de l’ANRT, Nr. 248, octobre, 2011 FLORIDA, R., & COHEN, W.M. (1999). "Engine or infrastructure? The university role in economic development", in L.M. Branscomb, F. Kodama, & R. Florida (Eds.). Industrializing knowledge: University-industry linkages in Japan and the United States (pp. 589-610). Cambridge, MIT Press. LEVY, M., JOUYET, JP., 2006, “L’économie de l’immatérielle, la croissance de demain”, Rapport de la Commission sur l’économie de l’immatériel MANKINS, JC., 1995, “Technology readiness levels, a white paper”, April 6. Advanced Concepts Office, Office of Space Access and Technology, NASA MORIN, E., 1990, Science avec conscience (Science with a conscience), Paris, Fayard, 1982, new modified edition. PAUN, F., 2011a, ‘Demand Readiness Level’ (DRL): A New Tool to Hybridize Market Pull and Technology Push Approaches – Introspective Analysis of the New Trends in Technology Transfer Practices (February 18, 2011). Springer Encyclopedia, Forthcoming. Available at SSRN: PAUN, F., 2011b, « From managing information asymmetries towards systemic asymmetries approach in technology transfer and innovation strategies: An economic analysis of the SME strategy at ONERA –the French Aerospace Lab », IUP Journal of Knowledge Management, Vol.IX, No 4, October. PAUN, F., 2011c, Demand Readiness Level as equilibrium tool for the hybridization between Technology Push et Market Pull approaches: ANR - ERANET Workshop, 8th of February 2011. PAUN, F., 2012, « The Demand Readiness Level Scale as New Proposed Tool to Hybridize Market Pull with Technology Push Approaches in Technology Transfer Practices » in Technology Transfer in a Global Economy, Springer series: International Studies in Entrepreneurship, vol 28, 397 p. PAUN, F., Von TUNZELMAN, N. RICHARD, P., 2012, « Transferring New Dynamic Capabilities to SMEs: The Role of ONERA – The French Aerospace LabTM in Promoting Asymmetries Management » (February 18, 2011). Available at SSRN: SCHUMPETER, J. A., 1911, “The Theory of Economic Development”, Harvard University Press, Cambridge, MA. STIGLITZ, J., WEISS, A., 1992, “Asymmetric information in credit markets and its implications for macroeconomics”, Oxford Economic Papers, 44, 694- 724. VEBLEN, T., 1914, “The Instinct of Workmanship, and the State of the Industrial Arts”, New York, Augustus Kelley, 1963. WATTS, D. J., STROGATZ, S. H., 1998, “Collective dynamics of ‘small-world’ networks”, Nature 393, 6684. WEBER, A., 1909/1929, “The Theory of Industrial Location”, Chicago, University of Chicago Press. WHEATLEY, M. J., 2001, “Innovation means relying on everyone’s creativity”, Retrieved November, 2002 XU, Q. et al., 2007, “TIM (Total Innovation Management) – A new paradigm of innovation management in the 21st Century”, Journal of Technology Transfer, 32 (1-2), 9-25. ZIMMERMANN, J.-B., 2002, “Grappes d’entreprises et petits mondes (Company clusters and small worlds”, Revue Economique, 53 (3), 517-524
  21. 21. Thank you for your attention Q&A
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