When Mahatama Gandhi used non-violence as a means to drive the Independence movement in India, not only was it a philosophy but also an innovative way to take on the then world power, considering the resources he and the country had. When Ratan Tata imagined Nano, he wanted to provide safety and security to families riding two-wheelers but he also wanted to create market for cars where it did not exist. Same is true for low cost hospitals like Arvind eye hospital were launched with an idea to provide the standard health care at a lower cost, where the cost was driven by the affordability of the customer segment, who in this case were patients.
Innovation means different things to different organizations. It is also different at different times for the same organization. There is a motivation or need for innovation that defines the purpose and roadmap of Innovation. In a commercial organization the ultimate purpose is always to improve top line and or bottom line while servicing a segment of customers. There are various components that contribute to this purpose and the new ones can always be added. As a business leader you need to figure out what does innovation mean to you and your organization. How should it impact its various stakeholders like employees and customers. What are the risks that you can afford to take and what are the resources that you are willing to commit? You need to access what stage your business is in and is it ready for the kind of innovation you are looking at. Businesses follow a lifecycle, in the beginning every business is based on some innovation, and as it takes maturity over a period of time the initial innovation becomes mainstream. This is when you probably need to begin working on your next big innovation to maintain your competitive edge.
Let us take the example of Indian IT industry. It’s core service offering is software development, implementation and maintenance. Now as a core service innovation, they keep on inventing and adopting new technologies and improving their processes. But what has been Indian IT industry’s biggest innovation is their alchemic ability to turn students and professionals from varied backgrounds into software engineers. More than a decade back there were hardly any computer engineers passing out of the technology institutes. Even today their numbers remain a small percentage of the total manpower requirement of the industry. IT companies managed this challenge by setting up internal academies or training centers to take on the supply side challenge of the business. Can you think of the IT boom in India without this big innovation in a non-core area?
You constantly need to figure out what and where your business’s next Innovation should be? One of the ways to know what areas of your business need innovation the most at a given point in time is by using audit tools. A typical audit tool will help you look at the various functions of your business and its ecosystem. It would give you pointers by way of specific questions, answers to which will highlight the need for innovation in that area. Based on the comparative analysis of these areas, you would know what areas need innovation the most. You can use the results of an audit as an input to your innovation roadmap.
According to Doblin’s ten types of Innovation, core product innovation is just one type of Innovation. So look at your business model, your processes, your value chain and your offerings and see where you can innovate. Deciding when, where and what to innovate is as important as brainstorming on how to innovate.
Contributed by : Anuradha Goyal
Thursday, September 30, 2010
Monday, September 27, 2010
Building a Smart Intellectual Property (IP) Portfolio
Building a Smart IP Portfolio
– A New Mantra in Knowledge Economy
After the global slowdown the new economy of think-tank is about “Excel or Expire”. Globally in the last five years Patent Offices have become busier day by day as the number of patent filings is significantly increasing beyond their capacity. This trend has not been affected even during the slowdown. The courts are moving towards the pro-IP, as its legislation. The awards for damages are growing in multifold, which were a rare scene in the business world of earlier days and this is quickly spearheaded in developing countries too. So corporations are required to act quickly and align their business processes to this Knowledge economy.
Managing Intellectual property portfolio smartly is so critical that corporations are assessing their Intellectual Property (“IP”) management programs to ensure that they are deriving maximum value from this important asset. There are a number of ways in which value can be derived from intellectual property, including:
• Protecting important commercial products and processes.
• Blocking competitors from entering the market.
• Lead time for developing, manufacturing and selling products.
• Licensing assets.
• Enforcing assets for exacting royalties and damages.
• Deterring competitors from enforcing their patents against you.
• Adding a negotiating tool to your tool box.
Appropriate IP management is specific to a company’s corporate culture and business objectives. Approaches to management can fall anywhere on a broad spectrum ranging from “defensive” to “aggressive,” depending on what the company wants to accomplish.
Creating Wealth and Not Risk From IP Assets
A “defensive” IP management model would lead a company to focus on generating a worldwide patent portfolio for the primary purpose of protecting royalty payments or taxes paid by foreign subsidiaries for rights to the parent’s technology. A company following a “defensive” IP management model might also be generating an extensive patent portfolio to impress investors. For startups, this could be critical to raising venture capital money. Public companies frequently tout their extensive patent portfolios to substantiate their commitment to technology in hopes of boosting or maintaining the value of their stock.
On the other end of the spectrum, companies following an “aggressive” IP management model might license out their IP rights and technology. Some companies “mine” their existing portfolios—that is, they look for unused or less important existing IP assets (such assets that don’t support a company’s businesses) to offer for licensing to others.
In addition, companies may also develop a patent portfolio to enhance their freedom to operate in a certain field of operation. Such patents act as a deterrent to competitors against suing the owner of this portfolio. As part of a pre-litigation due diligence, companies commonly study the target company’s patent portfolio to identify patents that could be asserted by the target in a counterclaim. The identification of a substantial potential problem often deters a company from asserting its own patents against the target. These “freedom-to-operate” patents do not necessarily cover or relate to a company’s own operations, but are based on its understanding of where its main competitors operate and its identification of areas for patenting within the competitor’s field of operation.
IP As a Metric for Innovation
Anyone who is in the field of IP recognizes the value that corporations place on aggregate IP numbers - primarily the number of patent filings. However, such filings are an imperfect indicator of actual innovation for a variety of reasons. Raw numbers provide no information about the scope of protection afforded by the patent filing, thus providing the same “score” for an incremental advance in science, as it does for a ground-breaking invention. Raw numbers also fail to take into consideration other valuable information including filing strategy for a particular industry, or for that matter, a broader corporate strategy, such as patent protection versus equally, if not more valuable, trade secret protection. Despite the inherent limitations of using IP as a measure of innovation, there is certainly a correlation between patent activity and research and development (R&D). Simply put, patent-based indicators do measure the productivity of research, if one accurately measures patenting activity.
How Developing Countries Could Change to Better Compete in a Technology Market
To accurately account for the role that IP has on innovation, there are many factors that developing countries need to consider beyond the aggregate patent numbers. The result of these factors will be to increase research productivity, which will ultimately result in an increase in patent activity. In addition, there is undeniable link between a country’s IP enforcement framework and innovation. Stronger patent rights, such as better enforcement mechanisms, a lower number of restrictions on IP protection, or more patentable subject matters stimulate inventors to file more patent applications, and seek protection in the developing country.
Authors:
Louis M. Troilo is of counsel with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP in Washington, DC. Mr. Troilo can be reached at lou.troilo@finnegan.com.
Lokesh V, CEO, Founder, Innomantra Consulting, He can be reached at Lokeshv@innomantra.com
– A New Mantra in Knowledge Economy
After the global slowdown the new economy of think-tank is about “Excel or Expire”. Globally in the last five years Patent Offices have become busier day by day as the number of patent filings is significantly increasing beyond their capacity. This trend has not been affected even during the slowdown. The courts are moving towards the pro-IP, as its legislation. The awards for damages are growing in multifold, which were a rare scene in the business world of earlier days and this is quickly spearheaded in developing countries too. So corporations are required to act quickly and align their business processes to this Knowledge economy.
Managing Intellectual property portfolio smartly is so critical that corporations are assessing their Intellectual Property (“IP”) management programs to ensure that they are deriving maximum value from this important asset. There are a number of ways in which value can be derived from intellectual property, including:
• Protecting important commercial products and processes.
• Blocking competitors from entering the market.
• Lead time for developing, manufacturing and selling products.
• Licensing assets.
• Enforcing assets for exacting royalties and damages.
• Deterring competitors from enforcing their patents against you.
• Adding a negotiating tool to your tool box.
Appropriate IP management is specific to a company’s corporate culture and business objectives. Approaches to management can fall anywhere on a broad spectrum ranging from “defensive” to “aggressive,” depending on what the company wants to accomplish.
Creating Wealth and Not Risk From IP Assets
A “defensive” IP management model would lead a company to focus on generating a worldwide patent portfolio for the primary purpose of protecting royalty payments or taxes paid by foreign subsidiaries for rights to the parent’s technology. A company following a “defensive” IP management model might also be generating an extensive patent portfolio to impress investors. For startups, this could be critical to raising venture capital money. Public companies frequently tout their extensive patent portfolios to substantiate their commitment to technology in hopes of boosting or maintaining the value of their stock.
On the other end of the spectrum, companies following an “aggressive” IP management model might license out their IP rights and technology. Some companies “mine” their existing portfolios—that is, they look for unused or less important existing IP assets (such assets that don’t support a company’s businesses) to offer for licensing to others.
In addition, companies may also develop a patent portfolio to enhance their freedom to operate in a certain field of operation. Such patents act as a deterrent to competitors against suing the owner of this portfolio. As part of a pre-litigation due diligence, companies commonly study the target company’s patent portfolio to identify patents that could be asserted by the target in a counterclaim. The identification of a substantial potential problem often deters a company from asserting its own patents against the target. These “freedom-to-operate” patents do not necessarily cover or relate to a company’s own operations, but are based on its understanding of where its main competitors operate and its identification of areas for patenting within the competitor’s field of operation.
IP As a Metric for Innovation
Anyone who is in the field of IP recognizes the value that corporations place on aggregate IP numbers - primarily the number of patent filings. However, such filings are an imperfect indicator of actual innovation for a variety of reasons. Raw numbers provide no information about the scope of protection afforded by the patent filing, thus providing the same “score” for an incremental advance in science, as it does for a ground-breaking invention. Raw numbers also fail to take into consideration other valuable information including filing strategy for a particular industry, or for that matter, a broader corporate strategy, such as patent protection versus equally, if not more valuable, trade secret protection. Despite the inherent limitations of using IP as a measure of innovation, there is certainly a correlation between patent activity and research and development (R&D). Simply put, patent-based indicators do measure the productivity of research, if one accurately measures patenting activity.
How Developing Countries Could Change to Better Compete in a Technology Market
To accurately account for the role that IP has on innovation, there are many factors that developing countries need to consider beyond the aggregate patent numbers. The result of these factors will be to increase research productivity, which will ultimately result in an increase in patent activity. In addition, there is undeniable link between a country’s IP enforcement framework and innovation. Stronger patent rights, such as better enforcement mechanisms, a lower number of restrictions on IP protection, or more patentable subject matters stimulate inventors to file more patent applications, and seek protection in the developing country.
Authors:
Louis M. Troilo is of counsel with Finnegan, Henderson, Farabow, Garrett & Dunner, LLP in Washington, DC. Mr. Troilo can be reached at lou.troilo@finnegan.com.
Lokesh V, CEO, Founder, Innomantra Consulting, He can be reached at Lokeshv@innomantra.com
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