Making your CFO an IP believer: insights from Know Labs CFO and SVP of IP
The IPBC team is heading to San Diego this month for the world’s foremost gathering of senior thought leaders and decision makers operating in the IP market across the world: IPBC Global.
While the team applies a laser focus to the finishing touches and muses on how to fit everything in their bags, IPBC Global speaker Peter Conley, Chief Financial Officer and Senior Vice President, IP, at non-invasive medical diagnostics solutions company Know Labs, gave us a glimpse of what to expect when he takes the stage for a panel tackling how to make your CFO an IP believer.
Conley is joining an impressive roster of speakers from IP powerhouses, including, Nokia, Ericsson, Marconi, Meta, Xiaomi, Hyundai, Sisvel and many more at this year’s event, hosted at the Hyatt Regency Mission Bay Spa and Marina between 12 and 14 June. Conley's answers have been edited for brevity, clarity and IAM style.
At IPBC Global 2023, you will be discussing how to make your CFO an IP believer. Why is being able to communicate IP value to CFOs effectively so important for IP departments?
This is a classic problem, which in this increasingly competitive world, can be fatal to a company if not addressed. However, the value of IP must first be understood clearly and then it can be communicated effectively.
First the problem: In most companies, if you drew a Venn Diagram, the IP department and the office of the CFO are two discrete circles functionally. One being legal, the other being finance and they are linked by a middle circle – let’s call it R&D or product or technology. The activity in the middle circle generates IP, which can be expensive both in terms of patent prosecution as well as ongoing maintenance fees. In other words, IP is generally viewed by the CFO as a cost center and exacerbated by GAAP [Generally Accepted Accounting Principles] accounting rules, where IP is carried at cost.
Further compounding the tension is the process. Patents are filed largely as the result of inventing something and then the patent is filed after the fact. In other words, the process is R&D driven and may not be aligned with business issues. So, despite the investment, it doesn’t move the needle. The result is low impact IP. This is borne out in academic and industry research – more than half of all patents are never forward cited. Nobody cares. This is a sure-fire way to raise your CFO’s ire.
The reason this is a serious problem is the value of IP is proportional to the intensity of the competition – be it from incumbent players or emerging players or completely new entrants into the market. Simply stated, the more ferocious the competition, the more valuable the IP. In the first Venn Diagram described above, the functions are siloed and often lack alignment with each other.
Therefore, the value of IP is often misunderstood, communication suffers, and businesses degrade.
Now the solution: What’s missing from the first Venn Diagram is the reality that it actually sits inside a much, much bigger circle called the market. In this big circle, which by the way is dynamic and moving, there are many players – big and small, incumbent and new, symmetric and asymmetric, with many value chains – some intertwined, others completely independent from one another. The solution involves understanding, in intimate detail, what is going on in this market through bottom-up competitive IP analysis and IP landscaping. Where’s the market going and who’s leading the way? Who’s lagging and will be left behind? Where are there roadblocks and where are the white spaces? What trends should we pay attention to? And a host of other questions.
The answers inform not only the IP strategy, but the business strategy. When that happens, IP becomes market-driven and strategic to the business. Now there’s common language to speak between the IP department and the CFO. In the end, CFOs care about high impact IP that moves the needle.
What is the key message or takeaway you would like to convey about making your CFO an IP believer to delegates?
The key takeaway is it is critically important that the IP department and the CFO be aligned, that they speak the same language of business. A high degree of alignment between IP and finance means there’s alignment between IP and the business. This creates strategic value to IP, which is the hallmark of successful companies. Not to do so can lead to underperformance and business failure.
IPBC focuses on creating value from IP. What are the biggest challenges faces by IP managers and strategists and what is the best approach to take, in your opinion?
In the words of hockey great Wayne Gretzky: “I skate to where the puck is going to be, not where it has been.” One of the biggest challenges faced by IP managers is putting themselves in a position to lead the market. Market leadership is where the value is. Market leadership requires knowing where the market is going and getting there first. The best approach to do this is to undertake comprehensive and intensive competitive analysis of the IP landscape, players and trends. Pay attention to IP white spaces, determine their business relevance, and get there first. That’s where the puck is going.
Your IP career has seen you involved in strategic corporate IP advisory services at Boustead Securities and co-founding ipCreate. Across your career, what top advice have you been given that you would pass on to others?
In the 22 years I have been involved in the world of IP, the best advice I have been given is to be the IP leader in whatever industry or domain you’re in. Being the IP leader means being the first to develop high quality, high impact IP in areas of high commercial value. The end result has been borne out through scientific research, investment research, business practice working with companies and personal experience. This is how tens of billions of dollars of economic value are created.
Finally, what makes IPBC so great?
The calibre of the people who attend IPBC, as well as the people in the organisation behind IPBC. They are thought leaders and people who understand the issues and have relevant points of view. And in addition to quality, the scale of IPBC events, nothing compares!
Hundreds of corporate executives, deal makers, investors, policy experts and legal professionals have already signed up to this year’s IPBC Global and tickets are close to selling out. Secure one of the few remaining places by registering here.