In today’s knowledge-driven economy, intellectual property (IP) has become a vital asset for many businesses.
But is creative thinking enough? Not in my experience.
To capitalise on intangible assets and gain a competitive advantage, IP needs to be cultivated, nurtured and harvested.
In this blog, I’ll explore the important role that harvesting IP has in safeguarding and maximising the potential of an innovation.
What is ‘harvesting IP’?
It’s a strategic and systematic process of identifying and acquiring intellectual property assets within an organisation.
But it goes beyond ownership. It’s about collecting intangible assets from the minds of people within an organisation and taking steps to recognise and maximise their value.
How IP harvesting made one company $4.5 billion
Back when I worked as an optical systems engineer at telecommunications equipment manufacturer, Nortel Networks Harlow Laboratories in the UK, I saw first-hand how the IP harvesting process helped build a culture of innovation.
They’d gained a leading market position through innovation partly out of a technology race in optical transmission. And to incentivise staff, Nortel gave significant cash bonuses for each invention that became the subject of a provisional patent application and larger bonuses as patents progressed through various milestones.
There were some engineers that earned more than their salary from invention bonuses.
It was this culture of innovation that led to Nortel’s intellectual property portfolio, which includes 6000 patents, selling for US$4.5 billion.
Harvesting IP as a catalyst for innovation
Harvesting IP can be an excellent catalyst for fostering an innovative culture within a business.
Even an IP harvesting exercise resulting in ‘no patent, but trade secret’ can foster an innovative culture and facilitate further IP harvesting.
For example, while at Nortel Networks, I came up with an invention using a pilot signal within the optical band of an optical amplifier but outside the band of data channels to control gain.
I mentioned my idea to my manager who sent it up the food chain and through the process of an intellectual property review involving a senior engineer, a subject matter expert and patent attorney.
While the idea wasn’t patented – it was harvested into a trade secret – I still came away with insights on the commercial and technical direction of the business with my reasons for working at a technology company reinforced.
The competitive threat
On the flip side, ideas that go unharvested can mean lost opportunities, or worse fuel competition.
The importance of IP harvesting becomes even more apparent when you consider scenarios where innovations go unused but have the potential to create competition when pursued externally. In these cases, better IP harvesting practices could have protected the organisation’s interests.
There was an unfortunate case in New Zealand recently, for example, where an engineer took intellectual property, that was considered to be owned by the employer, to an offshore manufacturer and a new, significant competitor emerged from that venture.
Perhaps a better IP harvesting may have helped in that situation.
IP’s critical role in attracting investors and licensees
Harvesting and growing a portfolio of IP assets is also important if you’re looking for investors or licensees. The sell will be much harder to investors who are looking for guarantees on investment returns and licensees may question the logic in paying for something that could be freely replicated.
How to effectively harvest intellectual property
- Deal Flow: Encourage engineers and innovators to disclose their ideas openly. Start with a low bar for disclosure, including verbal discussions or basic sketches.
- Ownership Documentation: Ensure clear documentation of the company’s ownership of innovations. A simple write-up is a great first step but a provisional patent application with an assignment from the inventor is the gold standard.
- Recognition and Reward: Reward and acknowledge disclosures irrespective of whether the company chooses to proceed with the idea. This can include cash rewards, recognition on performance reviews, or confirming that the organisation won’t commercialise the innovation, allowing the inventor to pursue it independently.
- Engagement: Engage innovators with senior technical, commercial, and intellectual property personnel. Regardless of the outcome of their disclosures, his process often stimulates a flow of innovation disclosures.
- Feedback: Use innovation disclosures as an opportunity to feedback commercial and technical direction to the organisation’s ‘grassroots’ innovators. This approach promotes bottom-up innovation and ensures that innovation aligns with business goals.
By embracing IP harvesting, organisations can unlock the full potential of their innovations, foster a culture of creativity, and maintain a competitive edge in today’s fast-paced business landscape. The benefits of IP harvesting are well worth the effort invested.
Need guidance on how to harvest IP?