What world class IP management looks like

When I first began thinking about what differentiates a world-class IP operation from one that is not, I tried to establish the baseline by sorting through a mental checklist of key, so called engine room, tasks performed by IP organisations. These include: 

• How effective is an organisation at identifying patent risks and configuring a portfolio to blunt and retaliate against patent assertions?
• How well does the organisation protect its products and services from being copied by others?
• How efficient are the processes to abandon or sell patents that provide little or no strategic or tactical value?
• How successful are the criteria used to decide when to file patents, when to publish, and when to hold inventions as trade secrets?
• How much thought is given to copyrights as a tool, or are they just an afterthought?
• What are the measures taken to both protect key brands, and is there any thought given to exploiting those brands to enhance and extend the reputation and value of the company?

In considering these kinds of questions, there was a gnawing feeling that I was missing something that was much more fundamental.  Something that differentiates truly world class operations from those that are simply adequate. 

Finally, I realised that I had to shift my focus out of the engine room, recognising that almost every organisation has excellent professionals fully capable of the fundamentals: patent and trademark prosecution; licensing; litigation management; IP portfolio management; invention harvesting; IP due diligence; and so on. 

In fact, while the subject matter of the IP within a given organisation or industry may substantially differ, the skills required to manage it are nonetheless so similar that IP professionals can generally move readily from one company to another and not skip a beat.

That said, before we explore how to be world class, let’s focus for a minute on what world class means. “World class” means “among the world’s best – the highest calibre”.  To reiterate, given the excellence of IP staffs within most organisations, and the fungibility of their skills across organisations, logic dictates that it is unlikely that the technical skills within the organisation, or the routine procedures, or the tools, or the availability of capital, or other resources, are responsible for creating a world class entity.

They are necessary, but alone insufficient, elements of becoming world class.   

Accepting this logic, by reflecting on the many companies I have worked with and worked for, I started to realise that there are higher level attributes that influence and chart the course of success for organisations that set them apart. 

My conclusion is that while there are many elements that contribute to being world class, there are three practices that are particularly important - in fact essential - to every world class IP organisation.

1. Relationship building – internal and external

First, and I think paramount, is that the head of every world class IP organisation must be primarily focused on establishing, and nurturing, trusted, valued relationships throughout their company, starting with the CEO and extending to every business unit leader and every board member.  Every.  Single.  One.

Intellectual property strategy and practice are only successful when completely aligned with the strategy of the company, including each of its product and services groups.  Those strategies evolve day-by-day, week-by-week, month-by-month.  

These strategies and the tactics that implement them are actively discussed and adjusted in operational meetings within the company’s board, among its top leadership and within every business unit.  The issues are driven by market dynamics, ever-changing product demand, the competitive landscape, macro and micro-economic conditions, government regulations, national and international politics, supply-chain evolution and many other major factors.  

Interestingly, intellectual property is a golden thread that runs through this living, complex tapestry.  IP is an asset to help solve many operational challenges.  Think of it: there is a lock and a key within the same company. They just need to find each other.

The problem is that many chief intellectual property officers in companies are not fully embedded in these business discussions on a week-by-week, month-by-month, year-by-year basis. These business discussions are foreign territory to many IP professionals.  They speak of unfamiliar issues and do so in an unfamiliar language.  Moreover, IP leaders are so entangled in fighting the never-ending tactical challenges that many might believe it is almost dereliction of duty to make relationship-building and relationship-maintenance their highest priority. 

This intense focus would necessarily require leaving the operation of the engine room to their staffs while they climb the stairs to the bridge to help navigate and pilot the ship.  But this is exactly the bifurcation of responsibility that is required. 

It is only through this level of immersion in business relationships that IP leaders can fully understand and use the vocabulary and context that other business leaders in the company are accustomed to.  Moreover, through these relationships business executives can learn some of the language and issues of IP.

Without a shared vocabulary, a shared vision and frequent conversations that strengthen relationships between business leaders and IP executives, there is no ability for the IP organisation to be world class.

Moreover, when difficult patent  situations arise (and the money required to solve them is a matter of intense focus), the deep, trusting  relationships with the impacted business leaders – as well as the knowledge the IP executive has acquired of the major challenges facing business units and the shared vocabulary they have developed - will  provide the  foundation on which a solution to that  IP challenge can be constructed.

Outside the company

The same principle applies to building relationships outside the business.  

Many companies in a given industry share the same or very similar IP challenges, particularly with respect to patent disputes. This is becoming increasingly relevant as the same technologies continue to extend across industries, not just within them. 

A frequently discussed example involves automobiles and financial services where telecom, mobile applications, biometrics, sensors, virtualisation and many other elements that have traditionally been isolated to the high-tech sector now extend far beyond it through the convergence of technologies and services.

This convergence calls for fundamental adaptation to a fast-changing environment. 

In particular, pro-competitive cooperation in mitigating emerging risks, and in resolving ever-present patent disputes, is dramatically improved when executives in companies that have commonality in IP exposures have a constructive relationship with one another.

Creative solutions are much more likely to occur when great minds are set in motion to try and solve a common problem together, rather than having those great minds attempt to solve the problem in isolation. 

Of course, vigilance to ensure that such cooperation enhances competition — rather than restricts it — is always paramount.  The good news is this can readily be accomplished.  

Early entities like Sematech, the Center for Automotive Research, the Clearing House’s Askelladen and Patent Quality Initiative, the Computer Systems Policy Project, the Intellectual Property Committee, the Coalition for Patent Fairness, the Open Invention Network, LOT Network, Allied Security Trust and RPX are all examples of such cooperation.

Some of these organisations are focused on government policy, others on fundamental research, patent dispute deterrence or dispute resolution. But at the heart of all of them is the common bond of people knowing, trusting, and communicating with one another.

Moreover, the construction of trusting relationships between product companies and patent owners, whether potential OpCo competitors, universities, research institutions, sovereign patent entities or non-practicing entities, can also lead to a better understanding of the operations, objectives and constraints faced by each party. 

Inevitably there will be distinct — and even opposing — objectives, but the ability to have a dialogue, and gain a greater understanding of one another, will inevitably provide a much more complete palette from which to choose when trying to paint a solution to an IP dispute.

Planning to succeed

In summary, world class IP operations focus intensely on building internal and external relationships.  IP executives become deeply and broadly involved in — and knowledgeable about —the business of which they are a part.  They build allies within their industry and across industries, as well as strive to know their potential adversaries and build bridges to communicate when needed, thereby reducing friction between them.

The benefits are clear, but the effort is also significant and never-ending.

The IP leader and the CEO must agree on the essentiality of this key performance indicator - and then organise the leadership of the IP group such that the engine room functions are largely managed by the staff reporting to the chief intellectual property officer.

This will leave the chief with adequate time to focus her efforts on building and maintaining relationships both inside and outside the company. 

These alliances will be put to use both to guide IP operations and solve issues when they arise.  But, lacking the managerial and staffing infrastructure to keep the engine room running smoothly - and without cheerleading by the CEO and other senior executives who regularly convey to their teams the importance of building and maintaining these relationships – this essential component of being a world class organisation will be elusive.

2. Commitment to diversity

The chief intellectual property officer must be fully committed to diversity, equity and inclusion - both within the IP organisation, throughout the company, and beyond. 

Simply said, too few women and under-represented minorities are part of IP teams, and without them, world-class operations can never be achieved. 

In part, this deficiency is the result of systemic discrimination, racism and inequities that have constrained the available pool of diverse talent.  In North America and Europe, girls and young women, as well as most under-represented minorities, are not exposed to science, technology, engineering and mathematics (frequently called STEM) at the same level as Caucasian boys and young men.   

And while STEM deficiencies are pervasive, they pale in comparison to a lack of exposure to concepts of intellectual property.  Frankly, very few students are exposed or even know what intellectual property is.  For them, it is not within the realm of the possible.   It is outside their world view.  

This is not their fault, it is ours - and it is inhibiting our own potential.  If we cannot introduce the huge pool of excellent, passionate, ambitious  female and minority students to the extraordinary intrigue and benefits that innovation and intellectual property create - and the mental gymnastics that it takes to manage those rights and thereby promote invention that has the possibility to improve the lives of all living things - then our IP organisations and our companies will always be sub-optimal.

Diversity, equity and inclusion are required to provide the scope of perspective that drive excellence.  The individuals that IP organisations must interact with inside and outside the company are diverse and must be more so.  Only if we achieve this can we hope to relate to and benefit from the individuals we interact with, and to make them our colleagues, our customers and our advocates.  This is an expanding, virtuous circle that we all have an obligation to pursue.  Only then can we ever hope to achieve world-class performance for our companies, our employees, our customers and the total global community that we serve.

RPX and I feel so passionately about this that I have been working closely with the Center for Intellectual Property in Gothenburg, Sweden, and the University of California at Berkeley, to establish a new organisation, the Center for Innovation, Inclusion and Intellectual Property.

Its mission is to provide a multidisciplinary approach to support innovation and entrepreneurial training; focused IP and business cross-training for board members, business teams and IP staff; and programmes to significantly expand the number of under-represented groups that enter the innovation and IP community.  

Moreover, the centre’s efforts will nurture not only the assimilation and success of under-represented demographics, but also build the knowledge and skills of board members, business executives, technologists and IP staffs of corporate sponsors that take advantage of the centre’s training opportunities.  

RPX is the first founding corporate sponsor for the centre and we encourage other companies to join us.  Please contact me if you have interest.  And if you do not reach out to me, don’t be surprised if I reach out to you given its importance.

3. Culture

The third critical element that distinguishes world class operations from those that are not is the insistence of the IP leader in instilling a culture of creation, innovation, risk-taking and flexibility.  

For decades, I have spoken about the attraction I have to the complex and dynamic nature of intellectual property management, particularly in the patent arena.  I have described it as a 6-dimensional chess game in which the rules constantly change. 

In IP, what made sense a year ago in terms of tactics and strategy can suddenly be turned upside down by a new law or court decision somewhere in the world, or by new technologies that -- without warning – make existing ones obsolete, completely changing market dynamics. 

World-class IP organisations must be equally dynamic.  They must explore and experiment with new ways of doing things, new structures, new approaches to reduce friction and gain efficiency.  

I once reported to an executive who, whenever someone proposed a new idea and explained all the benefits that could be gained by its implementation, asked a simple but important question.  He said: “You told me all the reasons this will work and all of the benefits it will deliver.  But many more new initiatives fail than succeed. It is easy to decide when to start something full of promise, but it is hard to stop something that falls short of that promise.  What are the metrics that will tell us when to stop?”

World-class organisations are open to adopting new practices and new tools that show promise to deliver tangible benefits.  But they also have the discipline to know when to stop.  This can occur at all levels and in all areas of IP operations.   For example, inventors want their inventions patented.  But, depending on the industry, more than 90% of patents granted ultimately have little or no commercial impact or value. And less than 5% ever have significant value.   So, when do we decide to stop maintaining them?

This is where ingenuity and openess to new ideas comes in.  I am intensely curious about the use of technology to improve efficiency.  The more we can shift to a world in which machines can perform the basic work, the more time true experts have to spend on the more critical fine tuning when making critical decisions. 

World-class IP organisations must be not just receptive to, but actively seek, new initiatives - and must be equally attentive to stopping activities in which continued investment is wasteful, such as:

• Maintenance of low value patents.
• Excessive patent filings that given past history are unlikely to be justified.
• Litigations that are not progressing as expected.
• Organisational structures that have not adapted to changes in the IP ecosystem. 

Knowing when to stop - and having the courage to do so - is perhaps even more important than knowing when to start a new initiative.

In conclusion, world-class is best defined by a commitment to building relationships; ensuring diversity, equity and inclusion among employees, suppliers, law firms and the entire IP ecosystem; and promoting a culture in which creativity, experimentation, and flexibility is encouraged.  And in which failure – especially a recognition of early failure – is celebrated as a necessary element of an innovative culture. 

Implementation of these practices, while still maintaining a superbly performing engine- room executing IP tasks with passion and precision, guarantee world-class ranking.

This is an edited version of a plenary speech entitled What World Class Looks Like made by Dan McCurdy during IPBC Connect 2020 on 29^th September