Hey, I just met you, And this is crazy, But here’s my number, So call me, maybe?
The era of Open Innovation appears to require any successful company delivering goods or services, particularly to the consumer segment, to find a way to utilize external ideas in their product development process – or to at least make an effort to appear to do so. The successes supposedly generated through Open Innovation (OI) are touted to customers, suppliers, potential partners, and even investors on the Street. Many companies go so far as to brand their OI to have it stand out further. (see Connect & Develop as one prominent example of branded OI)
One particularly big out-growth of OI is programs that seek to involve the wisdom of the crowd or to open firms up to ideas from individuals, rather than companies, outside the firm. This component of OI (let’s just call it Crowd Sourcing) requires a high degree of trust on the part of the collaborating partners – often small companies or individual inventors hoping that the company will respect their invention, work with them, and pay for their effort. This translates to large amounts of time spent by the companies evaluating ideas, providing feedback, and chasing imperfect leads so that the contributor feels valued and receives the desired follow-up call and feedback.
Too often this part of the process of OI is white-washed by the press and enthusiastic consultants looking to help you build your own system. The promise that every company can have its own ‘Connect & Develop” (P&G’s prototypical model of how to run an OI system) seems irresistible. To the press it’s a great story that connects with the everyman – ‘you too could get rich off your ideas!’ – but should the Osmotic Innovator put time into Crowd Sourcing or are external sourcing efforts better focused in other ways?
The Problems with Crowd Sourcing
– Technical Literacy: While it’s true, as Chesborough and many others argue, that the smartest people in the world don’t work inside your company that doesn’t mean that everyone is positioned to equally understand your business model, supply chain, and regulatory pressure. This means that a large volume of the ideas you’ll see from Crowd Sourcing ignore basic realities of the business you’re actually in or are obvious incremental developments with low value to the organization. Getting a real insight or connection you haven’t seen already if you’re running an efficient OI program is rare!
– Information Overload: The next problem with Crowd Sourcing is that once the gates are open and you start advertizing your willingness to pay for ideas you’ll be sorting through significant volumes of requests – trying to give each contributor an answer or feedback can become a job of its own, one with little return on the investment besides from a PR standpoint.
– Exposing Your Achilles Heel: Once you’ve created your Crowd Sourcing program in order to cut back on the noise and obvious ideas you can always put out specific technical challenges to properly direct those seeking to work with you. The balance that needs to be considered with this is that the more detail you provide on the real issues you are facing, the better the feedback, but the more your competitors can come to understand your weaknesses and potentially exploit them.
– The Door is Open: There’s a well-known saying that begins, “when opportunity knocks . . .” that is very apt for a Crowd Sourcing program. Simply having the Crowd Sourcing program in place makes it easier for real opportunities to find you, perhaps before they find your competitor. A main point to having the Crowd Sourcing component of your OI program might well be argued to be as an advertising program for your R&D department.
– Wisdom of the Crowd: If you’ve ever watched the hit game show ‘Millionaire’ you know that having the crowd on your side can be a huge help. A volume of research also exists to prove that crowds do have a particular ‘wisdom’ that can direct decision making appropriately. Interfacing with the outside world has the benefit of allowing your innovation program to leverage the crowd.
– Perception: Its been mentioned briefly before, but it deserves its own mention – simply having a Crowd Sourcing as part of your OI program is visible proof to the market that you’re a modern company fully taking advantage of current thinking on innovation and R&D. As well, small and medium sized companies can see the Crowd Sourcing program as proof that your company is equipped to work with them.
It’s fairly obvious that there are downsides to running a Crowd Sourcing component of your innovation program, particularly the resource needed to fairly and appropriately respond to ideas. However, the author tends to find the arguments in favor of Crowd Sourcing to be compelling. In the modern R&D world, no company can expect to go it alone without extremely deep moats. Even with that kind of protection ignoring outside innovation and opportunity is a dangerous game. Having a Crowd Sourcing program, and advertizing its successes no matter how small, is invaluable in communicating with the outside world that you are truly open for business and innovation. The next time someone gives you their number be sure to pick up the phone, and call them, maybe.
Every organization has its own way of generating ideas, but unless the system is totally broken there is always a plentiful supply of good, bad, and indifferent ideas floating in the minds of its employees. The main problem organizations have is in tapping into those ideas in a way that allows the best ones to rise to the top. In top down organizations leadership designates priority areas to ensure focus but can miss the boat on big wins from disruptive innovation. Organizations that allow everyone to work on their own pet idea are rewarding innovation, but allow its impact to be diluted through extensive resource waste on repetitive and irrelevant ideas.
How can an organization get the best of both? Rather than reinventing the wheel to come up with a new system the most efficient path forward can be the utilization of an off-the-shelf idea management software like Spigit, Imaginatik, or Brightidea that encourages idea submission from all parts of the organization and that then commences an organized process of idea ranking to find the big opportunity areas. This avoids the pitfall of having too few people making a decision and missing out on a big opportunity – the crowd sourcing or stock market approach allows contributors to collaborate to build ideas up and move good ones forward. It also allows management to designate winning ideas to go forward and to be allocated the necessary resources to succeed. Besides these two benefits – involving all employees in the innovation process and ensuring proper focus and allocation – idea management systems also become a de facto filing system for ideas, making sure that work your organization has done in the past doesn’t get lost. Ideas that have been vetted and collaboratively generated are at the ready anytime you need a new innovation.
Idea management software won’t generate winning ideas for you – but it will simplify the process of managing innovation and will allow you to master your innovation pipeline.
Idea management software is becoming more and more commonplace in corporate environments and the number of different vendors producing and selling their own management platforms seems to increase every day. Like all productivity tools they have their place and when used well can add tremendous value to an organization’s efficiency. However, idea management tools must be chosen very carefully and before beginning down this path you should consider the following:
Are you sure that the problem your company has is too many great ideas? If your staff isn’t sure what to work on because they aren’t sure what (if any) are the good ideas then maybe idea management isn’t as important to you as an improved idea generation process
Are you sure that an idea management platform can cope with the shear number of ideas in your innovation portfolio? Many platforms promote their ability to cope with large numbers of entries, but does the interface allow for the user to cope?
For platforms that promote some sort of crowd wisdom approach to idea management, are you sure that the software will be engaging enough to get a large number of people involved? Crowd wisdom only works if there is a crowd.
Many platforms include mechanisms for contacting internal experts or require experts or management to comment for ideas to progress. This works when the idea base is well targeted and relevant, but when a system becomes a catch-all for every half baked idea in the company, the contact mechanisms can rapidly become inbox spam turning off the very people who can contribute most to the system.
Like all productivity tools the adoption of idea management software has to drive a benefit for the company in the form of improved output (do more stuff), improved efficiency (do the same stuff with less people) or improved quality (do better stuff). Do you know how to measure or realize this benefit for your innovation program?
In short, better idea management is a challenge that all innovation groups face but the system you chose must match both the quality and quantity of the ideas in your portfolio. Just because it doesn’t have a URL doesn’t mean it isn’t cutting edge.
In the last week we’ve discussed using Defensive Publications as a strategy to reduce the overhead associated with patent filings. However, we’ve never really given a detailed explanation of how this concept fits in an over-all intellectual property (IP) strategy for an innovating organization.
Often, in the excitement of creating new products from an innovation or invention the tendency is to rush directly from idea / proof of principle to the lawyers’ office to begin drafting patents. Why is it so ingrained in a corporation to patent any new idea or process? Perhaps for some it is because patents can be used as a measure of R&D productivity, effort, or inventiveness. Patents also offer a chance for recognition for inventors and the company amongst their peers. Finally, those responsible can find comfort in the fact that the organizations interests are protected from competition. However, as expressed in the prior posts patents can be an expensive way to protect intellectual property – besides the obvious cost of filing the documents across the globe the organization must also consider the financial cost over time to maintain the portfolio, the value of the time the legal department will spend managing the portfolio, and the impact on R&D productivity as resources are directed to fulfil the data and testing requirements (often outside of the focus of any related project). The filing fees for a patent can pale in comparison to the loss in productivity and resources that might be incurred by a simple patent filing. For resource constrained companies a better process is needed.
The figure above shows the process that might be used by enlightened organizations to manage the intellectual property strategy process. Rather than rushing from idea to patent, as often occurs, the identification of a new idea or innovation should lead to a strategic discussion. During that discussion a number of criteria might be used to evaluate the idea, leading to several possible outcomes.
The primary criteria that would be best utilized to direct the decision include:
- Competitive Intensity (CI): the position of the organization in the market and in relation to its competitors, as well as market pressure, can dictate to a large extent the need to protect or the possibility of using a less resource intensive mechanism. In highly competitive spaces patenting may well be the best path forward, in spaces where a company has market leadership with few threats, disclosure (keeping the playing field level) may well be sufficient.
- Disruptive Potential (DisPot): the likelihood of the innovation to transform the market or industry should also be taken into account. Disruptions creating new consumer benefits should be viewed differently than innovations that benefit only the company. For example, for a company that has a market leading position due to brand or scale an innovation allowing cheaper product manufacture may not require patent protection. Only if competitors had exclusive access to the IP would a real threat be created. In this case a level playing field may not hurt the market leader – the real competition is occurring on other fronts.
- Strategic Importance (SI): for innovations in non-core areas the best IP strategy can vary depending on whether those areas may later become important or if protecting them from competition is a strategic necessity. This may also include whether technical innovations should be fully and comprehensively exploited or given a more cursory exploration to understand potential and obtain minimal protection or establish minimal freedom-to-operate.
- Reverse Engineering Potential (REPot): For process, manufacturing, or chemical innovations where the consumer or competitor will see little difference in the product, the question of whether the innovation could be externally discovered through practice of the innovation must be considered.
- Commercialization Viability (CV): The likelihood of commercialization of the innovation should also be considered. Also, if the innovation is likely only to enable another innovation or invention the resource dedicated toward protecting it may not need to be as highly prioritized.
- Resource Intensity (RI): In organizations that are already very lean this discussion likely already occurs, however when determining the strategy to pursue the potential costs for creation of the IP as well as to maintain it (and possibly even to circumvent it if protection or FTO is not established) should be discussed. Resource intensity can include cost of creating, manpower needed to support, cost to maintain the IP
All of these considerations can be taken together to determine the best course of action. This will determine a Return-on-Investment (ROI) potential for the IP being considered. In fact, the entire strategic discussion could be reduced to an equation that allows further discussion on how the appropriate IP strategy is determined:
How can these criteria be used then to determine a path forward?
For situations where a very low IPROI is determined, simply doing nothing may be an option. If the innovation is not in a competitive arena, is not on-strategy, or is not enforceable, then the best use of resource could be to let the idea go.
For instances with a moderate IPROI the decision to patent, hold as a trade secret, or defensively publish can be determined according to the relative weight of the factors. An innovation found to have high strategic value and commercialization viability but low competitive intensity might be best protected through defensive publication, while in the opposite instance (high competitive intensity with high commercialization viability and low strategic importance) the value of a patent may be recognized. For projects with very low reverse engineering, potential trade secret protection could be the best route.
For scenarios with a very high IPROI going forward with a patent would almost always be advisable, though of course a number of instances where this is not the case can be imagined.
Obviously the area of IP strategy is a high importance to many organizations, however much of the focus in recent years has been on creating and managing large IP portfolios. For the osmotic innovator a better strategy is needed; one that balances resource scarcity with the need to create value for the company.
Strategic publishing is related to intellectual property rights in that its use is intended to clarify and ensure the inventors right to use their discovery or invention without the need for legal defense. Within a corporate IP portfolio strategic publishing can be used in both a defensive and offensive manner. Over the past two decades there has been a marked increase in the use of strategic publishing especially from the high tech electronics industries who have promoted its use to control their ballooning legal costs. Globally, more companies are beginning to use strategic publishing in its defensive form as part of their IP management process and as a mechanism for driving resource demands out of their innovation programs.
Within the strategic publishing field by far the most common form is defensive publishing. Defensive publishing is simply publishing into the public domain an invention or discovery with the express purpose of making it non-patentable. The rationale for choosing defensive publication over patent filing can be complex and varied but within large companies the driver for this is generally one of three rationales, cost limitation, non enforceability and IP landscape clearance.
Requirements of defensive publication.
In order to be useful as a defensive publication the publication must meet a few simple criteria.
- The publication must be accessible to the public. There have been lawsuits arguing the definition of accessible but generally all media that is shared with people outside the company is suitable including company sponsored literature provided it is circulated externally. An example of this was IBM’s Technical Disclosure Bulletin which was published until 1998 with the express purpose of preventing IBM’s competitors patenting inventions it had developed but had chose not to pursue.
- In order to be useful the publication should be timely. The creation of prior art is very much dependent on when it is published relative to any patented invention. Fast and clear publication is as important to a defensive publishing strategy as it is for a normal patent strategy.
- The date of publication must not be ambiguous. This can be especially important if the proposed publication is web based which can be open to challenge. The best defensive publication strategies utilize printed and searchable journals.
Where to choose to disclose the invention is very much dependent upon the final publication strategy that is chosen but a number of more common options are listed below and assessed against the general criteria above.
Company Promotional Literature.
Publication of disclosures in company literature or the company website has the advantage of being simple and under the control of the company but fails against the accessibility and ambiguity tests described above. In trying to block a future patent claim or avoid having to defend a process or invention in court proving publication date on a company website is unlikely to prevent any case incurring significant legal costs. Company promotional literature also cannot benefit from anonymity which can be important for some defensive publishing strategies.
Company Report Series.
Company report series have been used by a number of corporations in most cases very successfully including IBM’s Technical Disclosure Bulletin, Siemens’ Zeitshrift among others. The benefits and drawbacks are similar to those of company promotional literature.
So called White Papers are often published (usually electronically) in order to disclose information. Their limited circulation means that they often are not suitable as part of a defensive publication strategy unless the three requirements of the previous section can be sure to be met.
Grey literature is the body of presentations, trade posters and the like that companies generate as part of the routine industry networking process they are involved in. Grey literature is very rarely monitored or routinely documented or archived and so does not generally serve the purpose of a defensive publishing strategy. In cases where grey literature has been used as prior art it has generally been accompanied with dated filing with company attorneys which is not generally enough to avoid legal challenges going forward.
There are a number of commercial publications that function specifically as a method for disclosing inventions. The longest running of these is the journal Research Disclosure (http://www.researchdisclosure.com/) which publishes both in paper and electronic form any research that a company may wish to bring into the public domain. Research Disclosure does not require that the author is identified and so anonymous disclosures can ensure that a company’s longer term strategy is not compromised.
The relatively new intellectual property library IP.com (http://ip.com/) is similar to Research Disclosure in many ways but has a stronger focus on obtaining agreements with patent regulators to promote the use of their library as part of the routine prior art search conducted before the granting of any patent. This facet allows defensive publishing an additional strategic advantage of possibly being used to clear IP space in an area where a competitor is active or increasing the likelihood of more obscure prior art being cited in any future search results. More recently other commercial publication portals including Research Disclosure have begun including these agreements within their systems.
One option for disclosing inventions is to publish in peer reviewed journals. While meeting much of the criteria required of a defensive publishing strategy one major drawback is the lack of control over the timeliness of the publication which can often be delayed for months or even years. Unless there is a higher degree of certainty of publication date than is afforded to the average journal this approach is limited in its use.
US Statutory Invention Registration.
In the US there is a provision for an inventor to divulge a non patented piece of IP to the public domain through the request of publication to the Statutory Invention Registration which is maintained through the US Patent Office. The requirements are minimal and benefit from registration within recognized patent classes which in turn improves the likelihood of an examiner finding the disclosure however the registrations are not anonymous. The original intent of the registration was to allow companies who had given up on pursuing patents a means of ensuring freedom to practice.
Since 1999 in the US all patent applications are published into the public domain once 18 months have passed from date of application. Effectively this allows a company a means of creating prior art simply by filing a patent application and letting it lapse. This approach benefits from having a high likelihood of being discovered in any subsequent search procedure however it cannot be anonymous and does require drafting in the form of a patent which means that the initial filing costs to a company are not offset significantly.
Defensive publishing and Osmotic Innovation.
The burden of IP management on a corporation’s innovation program is often significantly large. Producing the data sets that support patents often goes well beyond feasibility evaluation and takes many people out of the core creativity roles they are hired for. By utilizing a planned defensive publishing program corporations can reduce the burden of their IP portfolio and reinvest that resource back into more value added activities. As part of your innovation management program, defensive publishing is a must.