Editor’s Note: This article is part one of a series entitled “Building an IP Aligned Enterprise: A Guide for Corporate and Technology Leaders” in which we will focus on developing an understanding of IP alignment as a strategic priority within technology-driven companies.

Building an IP Aligned Enterprise: What is IP Alignment and Why Does It Matter to Your Technology Enterprise?

 

One of the fundamental questions facing technology business leaders today is how to effectively build and execute a truly competitive strategy for the enterprise — one that will bring strategic value to the organization in an increasingly crowded, competitive and consolidating marketplace.

The components that go into that seem clear: research and development; product innovation and introductions; marketing and positioning; and channel or direct sales execution into carefully selected target market segments. These are all, indeed, essential components and they set the stage for successful rollout of new innovations — and yet, they are not complete.

Rather, there is a missing ingredient in traditional business strategy that is mission-critical for technology enterprises. This missing ingredient is often sorely lacking from most strategic planning models, and yet it can mark the difference between success and stagnation.  That ingredient – IP alignment.

Considering that over 70% of the value in today’s technology enterprises is derived from intellectual property, most notably patents, trademarks, and trade secrets, but also in other intangible ways such as data, know how, and customer lists, it’s clear that one of the most powerful ways that technology companies can improve market share and enterprise value is by more effectively creating, identifying, managing, and leveraging their intellectual property. Doing that effectively and repeatedly through an IP-aware culture is the heart of the journey toward IP alignment for the enterprise.

 

What is IP Alignment?

The concept of IP alignment is, at its core, about developing an organizational mindset that recognizes, strategizes and executes around the valuable intellectual property assets and processes at the core of the innovation enterprise. In order to achieve this, we must build an IP aligned culture — one that is well-informed about the strategic value of IP and operates cross-collaboratively. IP alignment involves all corners of the enterprise. One reason this is historically challenging is that intellectual property is about identifying, capturing and protecting assets that are intangible and, often, not easily recognizable or even valued.

If we think about the innovation process, though, it may help us clarify what IP alignment looks like. For example, we can start in the research and development lab where new innovations are being explored. IP alignment informs, clarifies, and manages the processes by which innovation is incentivized, conceived, identified, captured, and protected.

Surprisingly, innovators themselves often are not well-equipped to perform these functions. A researcher may struggle to recognize which innovations are significant or protectable, and which are not. And they may perceive the process of documenting innovations as time-consuming and tedious.

Managers and executive leaders often discuss innovation in the abstract and tend to understand it more clearly when contextualized around a specific new product. These leaders may need to be educated regarding analysis of innovations and how they are prepared and turned into new products or solutions as well as the strategic defensive value of those products or solutions and monetization potential they offer. Those who manage budgets could particularly benefit from understanding how IP spend is a long-term investment rather than a line-item expense.

The four key functions of innovation at the enterprise — research and development; corporate leadership; product managers; and in-house counsel and legal personnel — represent the core teams who need to align together in order for innovation strategies to be successfully formulated and achieved. In order to do this, they will require education, awareness, and engagement in identifying, capturing, and protecting the organization’s intellectual property and understanding how it relates to its overall business strategy.

 

Who is Involved in IP Alignment?

The journey toward achieving IP alignment involves all four core functional teams described above, each of which is a critical stakeholder in the process.

The first team is corporate leadership. The role of corporate leadership is to develop and maintain a strategic understanding of IP; develop and lead implementation of an IP strategic plan; and set in place the appropriate processes and protocols to incentivize, capture, and protect intellectual property in ways that positively impact market share, revenue, and the bottom line.

The second team is research and development. The R&D team is tasked with developing and supporting a dynamic strategy that incentivizes innovation within the team; building an innovation committee that harmonizes business, legal and R&D goals; optimizing the invention disclosure process; and committing to continuous improvement around IP’s delivery to the company’s ultimate product development efforts.

The third team is the legal team. For smaller companies, this may primarily consist of general inside counsel and an array of outside resources, whereas for larger enterprises it may involve a comprehensive in-house legal department. Either way, the key is to recognize that IP is not just a legal function — it is, rather, a strategic function that involves both intangible assets that the legal team protects, and the value of those assets that is identified, quantified, leveraged, and monetized in partnership with the other core innovation teams. The point is that the IP legal team should be regularly engaged in strategic and process advisory work with the other teams who are central to the IP alignment journey.

The fourth team is marketing and product development. Their role in IP alignment is to understand how IP strategy and research shapes competitive opportunities or challenges; the interplay between patentable inventions and marketable trademarks; how they can align brand strategy and protection with the innovations at the core of new products; and what they can do to tighten the pathway between new R&D discoveries and actual go-to-market innovations.

 

Why Does IP Alignment Matter to Technology Enterprises?

For technology-driven businesses, IP alignment is the cornerstone of the company’s ability to innovate in the marketplace. Since IP alignment involves the identification, protection, and effective management of the company’s most unique and potentially pace-setting intangible assets, it is clear that IP strategy and its successful execution can provide the greatest competitive value to a company.

In summary, IP alignment brings together the strategies, assets and processes necessary to take IP from being a ‘checkbox’ priority (e.g. “Did we file a patent on that discovery?” or “Have we trademarked that brand?”) into a proactive competitive advantage that has the potential to powerfully supercharge the go-to-market strategy of the company.

The next article in this series will explore the three essential components in IP alignment, and how they connect together in order to create competitive advantage across the technology enterprise. As we continue this series, we will also explore indicators that your technology enterprise may lack a unified IP strategy; how to assess the current state of IP alignment in your company; and more steps on the journey toward IP alignment.

Thomas DeFelice

Image credits: Photo by Mindandi on Freepik.

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.