Surprisingly, the best piece of advice when it comes to intellectual property is the same as the advice I received as a teenaged driver. "Look ahead."
Like so many others, I was taught lessons throughout my childhood and adolescent years that were meant to pay dividends over time as I moved into adulthood. And like so many other kids, I ignored them, or did a half-baked version of the advice, or thought I knew better. Things like:
But one small tidbit that always stood out to me is “When driving, look 10 seconds down the road ahead of you at where you are going and not so much at the car(s) immediately in front of you”.
This one didn’t make sense to my 16/17-year-old brain. I’m surely going to smash into the car in front of me if I’m not looking at it, right? So, I spent my first year of driving ignoring this advice and staring at the trunk of the car in front of me. I also got into a couple of accidents that first year, smashing into the trunk I was staring at. Probably just a coincidence.
Over time I started getting better at looking ahead. In the car, in life, in business. And for my driving, I noticed that not only was I not getting into accidents anymore, but I was also driving more smoothly thus putting less stress on the gas, brake, and clutch; I was requiring less maintenance on my car and was getting better gas mileage. Maybe these people were on to something all along.
I’ve found that this lesson also rings true when it comes to intellectual property management. If you don’t look at what’s ahead, you may find yourself making urgent, jarring moves to avoid danger while putting unnecessary stress on the parts that make your IP portfolio go vroom.
To most, IP management is a reactive beast wherein you get an idea then try to patent it. You receive a rejection from the patent office, and you respond with arguments. You get the attorney’s bill, and you pay it. You are just staring at the IP trunk in front of you, waiting to smash into it. To be efficient and effective, you need to look ahead and anticipate- that is, be proactive and pragmatic about your IP.
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The first step towards being proactive is designing a comprehensive IP strategy. One of the many benefits of implementing an IP strategy is how it can guide you when you see perilous obstacles ahead of you. A properly designed and implemented IP strategy will guide you on things like culture and governance, disclosure and adjudication of ideas, global filing strategy, policies or best practices, and organization. One of the most important items is the frequency and depth for which you will review your IP including its operations and management. If the IP strategy is the guide on what to do when you see something nasty ahead then reviewing various aspects of your IP is the actual looking ahead.
Wait, what was that last one? Surprisingly yes, reactive companies often find themselves on the negative end of this question, and it’s a great example of an easy but important bar to clear. Inventors are the original owners of IP and must assign their rights to their employer for the company to legally own the asset. All companies should have clauses in their employment contracts that state all IP developed by the employee must be assigned to the company. But some companies forget, or don’t implement such clauses for the first few employees or forget to actually implement the clause. |
If you’re not reviewing your IP, you may find out too late that an inventor did not assign their rights, nor did they have a clause in their contract obliging them to do so. The employee left on sour terms and now refuses to sign over their rights. So, what now? Smash.
If you are not looking ahead, you will also find yourself scrambling and weaving to get off at your exit unscathed when it comes time to fundraise, divest, or go public. Hey, I’m really nailing these driving analogies!
In due diligence, potential investors or acquirers will not just be looking at your assets and making sure you own them. They want to see how good you are at looking ahead and being prepared for whatever is there. They want to see how organized you are, as it is often reflective of the quality of the IP portfolio you have assembled. They want to make sure you know how to adjust the mirrors and seatbelts and put gas in the car too, so to speak.
Some of these items include having open-source software (OSS) compliance policies and usage logs, performing regular audits, keeping a central list of executed NDA docs, tracking and forecasting IP activity and costs, trends, and appointing an executive to be in charge of IP oversight (typically the CTO or head of R&D). Getting an IP committee or council together for regular meetings is a good way to ensure these and similar items are addressed proactively.
So, get moving on that IP strategy, start organizing, and keep looking ahead; you’ll begin to anticipate the danger and steer clear of it. Enjoy the drive!
| Jordan Pynn is the Vice President at Stratford Intellectual Property, specializing in IP operations and M&A due diligence. He has overseen the IP component of several M&A and fundraising transactions valued between $10M-500M. A native of Ottawa for 34 years, Jordan now lives in San Diego, CA with his wife and infant daughter. |