Hard and soft rights combine to solve the age-old question: function or form?

Google is in the process of launching its latest technology, Google Glass, but has already come up against objections based on everything from privacy issues to how it looks. In a move to allay the backlash, and having already released responses to the top 10 Google Glass myths, on March 24 2014 Google announced that it had formed a strategic partnership with Luxottica “to design, develop and distribute a new breed of eyewear for Glass” to be released in 2015.

Intellectual property can have a positive combinatorial effect for a product – particularly when blending somewhat diverse sets of rights. What does this mean for a product and what this can mean for the parties involved?

Many will not have heard of Luxottica. The Italian corporation is responsible for many of the world’s high-end sunglasses brands, including Oakley and Ray-Ban, which were included in the deal with Google. Through more than 50 years in the market, it has become one of the leaders in the sunglasses business, and with that it brings significant intellectual property from the content design around sunglasses through to its branding and distribution channels.

Google, on the other hand, brings all of the hard technological rights around the Google Glass concept itself. However, from a stylistic point of view, as a consumer would you rather wear Google Glass or a pair of Ray-Bans? You don’t have to be Paris Hilton to choose Ray-Bans – and it is this point that Google has successfully picked up on.

What Google has done is analogous to the Tesla electric car story. Electric cars have been on the general market for a decade now, but only recently have they caught the eye of true car aficionados. Why? Because people didn’t want to drive a Jetsons-esque bubble car and, for many, the technology alone was not enough to make them buy, even if it was good for the planet. Conversely, people are willing to consider an electric car if it looks and behaves like something akin to a sports car. Tesla brought together the hard rights of electric car technology with the soft design rights of much-loved sports cars, bringing a significantly more desirable offering to market than was previously available (for more details on Tesla please see "Elon Musk takes us back to the future").

Google hopes to do the same in its venture with Luxottica. Complementing this, in order to distance the Glass technology from the realms of tech geeks even earlier than 2015, Google has also linked up with one of the matriarchs of global fashion, Diane von Furstenberg, for the ‘DVS Made for Glass’ collection, launched at high-end fashion retailers on June 23 2014.

Google is essentially piggybacking on the strong high-end fashion brand equity held in Diane von Furstenberg, Oakley and Ray-Ban (the soft rights of the form) to take its Google Glass technology (the hard rights of the function) out of the world of tech geeks and make it mainstream.

This highlights that how things look – and not just the function – is really important. Image matters. These are both classic examples of bringing hard technology rights together with soft design rights, with the sum of the parts being greater than the whole.

Coming back to the Google Glass-Luxottica deal, having established that the combination of rights is providing each player with significant potential value, what does this mean for either player in terms of acquisitions?  Is Luxottica now an acquisition target for those outside the fashion sunglasses markets? It has instantly expanded its target market from pure fashion to functionality, having previously dabbled here with MP3 and HUD devices. In addition, it is likely to be one of the first to market with the Glass offering, giving it the opportunity to establish itself as a market leader in the new field. Luxottica will now develop an expansive IP portfolio (whether registered or not) relating to the innovations around getting Google Glass to look good – or at least good enough. These are all likely to raise the company’s desirability and may provide the major shareholder and company founder, Leonardo Del Vecchio, with the exit that many self-made businessman desire.

In summary, technology rights alone are often insufficient to develop a mainstream consumer market upon – design rights and eventually branding are required to take innovation to the next level. This can be done either by hard slog – building your form from the function up – or by partnering with a player which has an established brand (form) on which you can leverage your function.  

This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight

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