“Why don’t we have the right IP yet,” the EVP of Global Products at an American technology company asked herself after leaving a strategic review meeting for a billion-dollar business area. “We have all the foundations in place: An IP strategy directly linked to the business strategy, an R&D process naturally integrating IP, and experienced patent attorneys in the team. Still, when we need it, we do not have the right IP. What is missing?”

This EVP is not alone in her experience. Developing an IP portfolio that delivers sustainable and repeatable business contribution is not an easy feat. Many companies struggle to execute on their business-driven IP strategies and achieve their IP creation targets. As it turns out, proactively capturing the IP positions needed for business impact contains multiple pitfalls, and there is a risk that even the most clearly formulated strategic portfolio objectives end up as nothing more than pieces of paper, rather than generating the valuable assets intended. As a result, significant value can be left on the table, even in cases where patent filing numbers might look deceptively strong and healthy.

Through our experience of working closely with leading technology companies to realize value from IP, we have identified four best practices to address the typical challenges companies struggle with when attempting proactive IP creation.

4 cases – 4 proactive IP creation best practices

Case 1. Target real business needs

American service company

From reacting to innovation buzz and explorative bets, resulting in a scattered, low-impact IP portfolio;

to deliberate and business-driven starting criteria, producing IP with short- and long-term tangible business impact.

Proactive IP creation starts and ends with business needs for IP. Whether proactive IP creation takes the form of IP harvesting workshops or IP professionals as flies-on-the-wall in key development projects, it should always be done with a clear business outcome in mind. Ideally, a business-driven IP strategy pinpoints where to build IP portfolios with strategic intent, and at the least, every proactive IP creation initiative should be able to state: “if we are successful in building the right IP, and put it to use, this would impact revenue, costs or risk by…

Case in Point: American Service company

SITUATION. With a forward-leaning market position and strong financial performance, the company made large investments in digital technology and new business models. When it came to its IP portfolios, the company had however fallen into a common pitfall of “innovation theatre.” Strategic patenting was substituted by reactions to fads and buzzwords. When acting on the latest shiny object in the market, business executives seemingly correctly called the patent team to help protect future-oriented investments. However, this ad hoc approach led to scattered IP portfolios biased towards long-shots and wishful thinking scenarios. Most of these patents never became useful for the business.

 

ACTION. To increase the business impact from IP, the company implemented a new governance model dictating that all proactive IP creation efforts had to fulfill three starting conditions:

  • Driven by business imperative – systematically innovate in and position the company in business-critical areas.
  • Real customer problems – direct IP to innovation that solves actual problems that customers care about.
  • Significant potential (“$M100” magnitude) – address the largest opportunities and threats.

OUTCOME. In less than 5 years the company’s IP portfolio went from scattered pieces of impressive-sounding IP from independent initiatives without coordinated strategic direction, to being business strategy-driven and generating significant value. The company managed to build IP portfolios that addressed short-, mid- and long-term business needs and focused efforts on protecting differentiators of current service offerings as well as building positions to support new business models and positions to keep future business options open.

Case 2. Adopt the right method

American automation company

From relying solely on one IP creation method producing mainly incremental and constricted inventions;

to deploying a diverse range of methods resulting in multi-faceted portfolios addressing different business needs.

The method by which proactive IP creation is conducted should always depend on the situation and the wanted output. There is no one-size-fits-all method. Establishing a set of proven methods will put the IP team in a good position to selecting the most suitable approach. It is equally important that these methods are being refined and upgraded continuously. “Never stop innovating the way you innovate” applies to proactive IP creation as well.

Case in Point: American Automation Company

SITUATION. The company had patenting deeply rooted in their DNA. Everybody in the management team was firmly behind the importance of IP. IP harvesting was a well-established practice and was an integral part of their stringent New Product Development process. Hence, the IP team had fine-tuned an IP harvesting method that was efficient for capturing product advances. However, they experienced two critical shortcomings. Firstly, their method focused solely on the product at hand. There was a risk that future, yet often more viable ideas, were left undetected due to time or project scope restrictions. Secondly, the fine-tuned method was ill-suited for teams that worked on emerging topics in newer, less mature areas. These teams often had needed to first ideate and articulate new potential solutions as well as to clearly define new important problems to solve in the first place.

 

ACTION. The IP leadership team asked themselves why these shortcomings occurred and how to better capture the IP needed. The answer led to the insight that not all business and R&D teams had the same characteristics and needs, and that different methods for IP creation were required depending on the context and objectives.

OUTCOME. Applying a variety of different methods helped the IP team integrate more strongly with the business. For instance, as a permanent member of an agile software development team, they captured new outcomes effectively as IP became a natural part of sprint planning and review. Further, for a newly established entrepreneurial business unit they participated in weekly meetings and became an integral part of the continuous planning and execution of forward-looking ideation activities. Also, on broader strategic topics the IP team stimulated the definition of new viable problems to solve through division-wide innovation sprints. At the same time, IP harvesting in prioritized product development projects was maintained with high yield.

Case 3. Prepare x4

European high-tech company

From gathering creative people in the hope that they can be inventive in workshops, resulting in fringe and low-impact ideas;

to guiding IP creation to solve real business problems based on deep contextual insights and triggers to fuel creative dialogue.

“By failing to prepare, you are preparing to fail” is very true in IP creation. Proactive IP creation means engaging and collaborating with people. The most effective antidote to low-output brainstorming sessions and passive interview-type workshops is to prepare by immersing and empathizing with the right people and understand how to best prepare to stimulate the needed creative discourse.

Case in Point: European High-Tech Firm

SITUATION. As a constant contender for “most innovative company”-awards, the firm had a proud IP tradition. However, regardless of strong top management support, awareness of the latest creative workshopping methods, and a best-in-class IP strategy that pinpointed where to build strategic IP positions, the company found their ideation workshops and invention mining events inefficient, without the wanted output. The company’s big thinkers, who were often invited to innovation and IP creation sessions, felt that these were too open-ended, failed to stimulate the right discussions, and produced low-impact ideas. Consequently, interest and participation in these sessions had started to fade.

 

ACTION. As part of its business-driven IP transformation, the company reshaped the Patent Coordinator role to IP Catalysts by hiring, training and equipping people to be creative facilitators. They put in place a ‘Prepare x4’-mindset, to increase the effectiveness of proactive IP creation workshops. Prepare-1: Empathize. Talk to people before the session. Emphasize with their situation to understand their viewpoints, learn, and identify what is needed to trigger their creativity. Prepare-2: Insights. Do your research. Run analyses to identify triggers to stimulate and fuel creative dialogue. Frame a clear workshop challenge in line with the business needs for IP. Prepare-3: Actively facilitate. Have a clear session plan for how to facilitate the discourse and the needed behaviors. Prepare-4: Don’t leave people hanging. Ensure everyone knows what will happen next, who is responsible, and how the workshop outcomes will lead to results.

OUTCOME. The company saw increased participation and engagement in proactive IP creation workshops and an increase in the number of invention disclosures with high probability of creating business impact. The workshop sessions also led to positive side effects beyond IP by generating new insights for R&D and Business Development.

Case 4. No one-offs

European automotive company

From ambitious but isolated workshops with limited follow-up, yielding IP patchworks rather than coherent portfolios;

to integrating IP in strategic teams for continuous engagement, producing portfolios with desired business impact.

Regardless of the perceived success of one proactive IP creation event, the event is just a means and not an end. The goal should always be to build IP portfolios that create control positions, not individual patents. Just as innovation is an experimental and iterative process over time, so too is proactive IP creation. Effective collaboration between IP-, business- and innovation teams over time will allow them to continuously identify and capture the needed IP. In addition, they become collectively positioned to react quickly and align their focus to create impact together in a consistent manner.

Case in Point: European Automotive Company

SITUATION. The company had made progressive organizational and skillset changes to establish a strategic and proactive IP team. One activity of the IP team was to facilitate and sponsor 2-day ideation sprints for strategically selected projects. These initiatives were well received, and the number of good ideas were celebrated on both sides of the two teams. However, when the event was over, so was the motivation to refine and make use of newly gained insights and ideas. Seemingly well-planned and well-received initiatives fell short in the end.

 

ACTION. The IP team realized that a shift in mindset was required to create business impact from their initiatives. The team changed their approach to engage in more sequential and extended collaborations with project teams to strengthen shared purpose, motivation and ownership of proactive IP creation. Rather than seeing their contribution as merely a one-time plug-in that could be injected into an ongoing innovation project, the IP team repositioned itself to become a creative and strategic partner, able to build strong and lasting IP portfolios.

OUTCOME. Working tightly and iteratively with selected teams yielded significant results in less than 18 months. In one prioritized area the company went from being a laggard to being the leader with 20+ new inventions together making up a strategic portfolio. Such results could be achieved since triggers, insights and the creative dialogue were continuously renewed and upheld over time between the two teams. While the two teams had different sets of competencies and roles, they shared the curiosity and determination to identify the next relevant problem to solve and thus ultimately expand the IP portfolio with viable solutions and future options.

Conclusion

Just as businesses demand return on investment from R&D, they must set requirements on their IP investments. A foundation for creating tangible returns from IP is having the right IP in the first place. However, as we have seen, building IP portfolios that can have actual impact in realizing a strategic IP objective is often much harder than companies expect. To avoid common pitfalls, companies need to master four critical proactive IP creation practices. Addressed together, they form a set of self-reinforcing best practices that ensure the development of IP portfolios capable of driving desired business outcomes.

Proactive IP creation best practices

TARGET REAL BUSINESS NEEDS

  • IP has limited intrinsic value; the aim is not to create IP, but to enable financial value creation.
  • Focus proactivity and resources on areas with highest probability for business impact.
  • Develop a mix of long-term strategic bets and current/near-term competitiveness.

ADOPT THE RIGHT METHOD

  • There is no one-size-fits-all method for proactive IP creation.
  • Build a palette of IP stimulation methods and select the right one for each situation.
  • Refine and replace the methods; continuously innovate the way you are innovating.

PREPARE X4

  • Scheduling sessions is not enough. Preparation mitigates poor outcomes.
  • Before: Empathize to understand the context and provide triggers fuelling creative dialogue.
  • During and after: Actively facilitate the discourse and don’t leave people hanging.

NO ONE-OFFS

  • Proactive IP creation is an experimental and iterative process.
  • For strategic positioning, one patent is not enough. You need portfolios.
  • Make IP teams integrated co-owners to repeatedly create strong IP and secure business impact.