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Debrief – Corporate LiveWire Intellectual Property 2020 Round Table | IPAN

IPAN Director Associate Professor Dr Janice Denoncourt recently had the opportunity to participate in Corporate LiveWire’s Intellectual Property 2020 Round Table, held virtually this year.

Seven international IP experts discussed the significance of recent trends in the IP landscape, including the accumulation of IP rights, differing approaches to incentivising innovation and creativity, and the management of large patent portfolios.

Janice’s reflections on some of the key questions discussed at the event are set out below.

Why have we seen an exponential growth in the number of patent, trade mark and industrial design applications around the world in recent years?

“Intellectual property (IP) rights law has evolved from being a little pool to a big ocean. Thanks to government public education programmes and resources available freely online from IP rights granting organizations, modern consumers and investors are more IP aware than previous generations. The number of new patents, trade marks and designs around the world show that the business and creative communities support and are keenly interested in acquiring IP rights to support their business models and strategic value creation objectives.

According to a recent survey and report, “Multiplicity: smart choices in disruptive times” by Gowling WLG, IP rights protection is significant in an economy disrupted by technology as ‘it can be the difference between risk and reward for business’. The crown jewels are patents, trade mark, copyright and designs, although trade secrets are gaining in economic importance.

Aligning business strategy with the creation and protection of IP rights opens up a plethora of business opportunities and potential income streams. For these reasons, IP rights are a pillar of corporate longevity.  According to Professors Ole-Andreas Rognstad and Inger Berg Ørstavik, editors of Intellectual Property and Sustainability (2021) Edward Elgar, IP rights have proven to be robust against time and societal development and international treaties regulating IP rights have existed for more than 130 years, although corresponding national legal systems vary in tradition and experience.  Thus, IP rights have survived revolutionary technical and societal developments, are here to stay and are likely to become even more significant in the boardroom in the future.” 

What measures are currently being taken to incentivise innovative performance?

“Virtually all organizations aspire to innovate, invent, create and design. Imagine a world without Gutenberg’s mechanical invention of the printing press, which unlocked literacy and the ability to circulate information and ideas.

Technology developer Cisco Systems runs day-long ‘patent-a-thons’ to brainstorm new ideas and foster collaborative relationships and company culture.

American chemical engineering DuPont de Nemours, Inc, a company in the Century Club since 1802, with a history of innovation, has a longstanding DuPont Fellowship scheme to incentivize innovative performance. DuPont Fellows are scientists and engineers who define new technologies, influence research direction and mentor other scientists both inside and outside of the company. Being named a DuPont Fellow is to be at the highest technical professional level in the company. According to Senior Vice President and Chief Science and Technology Officer Douglas Muzyka, “Throughout DuPont’s history, our science and technology has been a main source of our competitive advantage, enabling us to drive innovation and transform markets for more than two centuries. As our company’s most distinguished scientists and engineers, DuPont Fellows create, develop and commercialize new technologies”.

Incentivising performance through employee recognition combined with financial rewards and company share options is also highly effective. In Germany, financial rewards for inventors are mandated by law. The German Employee Inventions Act provides a legal entitlement to remuneration for the employee inventor and sets out an exact process for calculating and payment. The remuneration is a legal requirement as is not determined by company size, turnover, number of employee inventors or patents applied for. In Germany, almost 80% of all new patent applications originate from permanent employee inventors.

Then there is the ‘Google Way’. Google, Inc., in its short corporate lifespan, has engaged a huge workforce of over 50,000 employees across the globe. The company’s work culture is “To create the happiest, most productive workplace in the world”. The Google work culture has plentiful perks, offers staff cutting edge office designs, great freedom and flexibility when carrying out work, flat management and decision-making transparency and food is never far away. The environment sets the scene for intellectual risk taking without fear and an environment where creativity and innovation flourish. A well-rounded combination of financial rewards such as salary, performance bonuses, company shares and options, professional recognition, personal flexibility and a supportive work environment all have a role to play in propelling innovation and creativity.”

What are the challenges of managing a large IP portfolio?

“As former inhouse counsel for a publicly listed Western Australian mining technology company I have direct experience in managing a high value IP rights portfolio. Whilst our head office was based in Western Australia, we had offices around the world across several time zones.

The challenges of managing a high value IP rights portfolio are many. First, one has to understand what the company’s IP actually comprises by way of an IP audit. This creates a baseline from which sensible and strategic business decisions can be made as R&D, technology, and the patent processes are dynamic.

However, to strategize R&D and IP rights planning you must go even deeper, read and fully understand the key patent claims as well as the competitive landscape. A deeper understanding can also be gleaned from the company’s technology experts and professional advisors. I had many a long discussion about certain key patent claims to ensure I completely understood the purpose and potential business impact of these rights, even though I was not a mining engineer, metallurgist, chemist or rocket scientist. Importantly, I attended important R&D technology trials, sometimes with our patent attorneys and even a mile underground in a gold mine near Rustenburg in South Africa!

 

Janice with colleagues in an underground mine near Rustenburg, South Africa, circa 2000

 

I was able to witness and capture important information and interact with key inventors. This provided me with the opportunity to learn about what motivated our VIP inventors and how the company could work with and reward them.

Capturing and protecting trade secrets and know how associated with patented technology is vital, yet often flies under the radar. Who has this knowledge? How do they know? Why do they know? How should the company document the information so that there is evidence of its existence, yet protect it so it does not enter the public domain? Who needs to know going forward?

Developing a workable confidential information corporate policy will be worth its weight in gold. Educating the Board of directors so they can approve budgets, portfolio reviews, initiate or respond to IP litigation, and determine access to technology also demands ones’ attention. Liaising with company accountants, independent auditors, R&D tax specialists, banks, stock market advisors and analysts feature regularly when managing a high value, extensive IP portfolio. Further, communicating income streams and material IP-related business outcomes to the stock exchange or in annual company reports to shareholders is increasingly important given the evolving corporate regulatory landscape.

Although IP rights are intangibles, as creations of the mind, they involve people at every stage of the process from spark of genius through to acting as a witness to secure a court judgment. Corporate IP rights owners are human communities. The bigger the IP portfolio the more people involved. The Chief IP Officer, or in my case, inhouse counsel, is at the centre of drawing together a variety of people with high level expertise in their fields to achieve corporate objectives. Using my central position and active role within the Board, I was able to cross-pollinate ideas and connect the right people to accelerate and amplify the potential of the corporate IP portfolio”.

Dr Janice Denoncourt (BA, LLB, GAICD, LLM, PhD, SFHEA) is an IP specialist who researches the nexus between IP rights and corporate governance. She is Associate Professor of Law at Nottingham Law School, Nottingham Trent University. Janice is the author of Intellectual Property, Finance and Corporate Governance (2018) Routledge and is on the Board of the London-based thinktank, Intellectual Property Awareness Network (IPAN) www.ipware.org.