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  • Writer's pictureJustin Rerko

Three mindset shifts for aligning IP and the business: Product centricity, proactive involvement, and “buying optionality”

Even though we’re an AI company, we at Tradespace are evangelists for first principles, namely, building IP that creates business value. In my experience, IP is often under-resourced. It’s a limited number of people struggling to keep up with the day-to-day demands of managing an IP portfolio, leaving little time for strategic and higher-order thinking. And this is exactly the promise of AI: it won’t tell you what to do, but it can automate a lot of the processes that consume your day — hours that can be invested in all the strategic thinking and planning that so often eludes us.


Extra time on its own however, often isn’t enough for teams to start being truly strategic. For IP teams to be smarter about meeting company goals, they have to work differently too. Through my work as an in-house IP attorney and advisor to IP organizations, I’ve found three mindsets that are the most impactful for IP teams to embrace when making this transition: Product centricity, proactive involvement, and “buying optionality.”


Mindset #1: Product centricity - Strategic IP starts with putting — and keeping — company products at the center.


The root of delivering business value through IP is making and keeping your IP product-centric (more on the “keeping” part in Mindset #2). As a first principle, patents protect products and the revenue they generate. Yes, patents hedge against litigation risk, create monetization opportunities, and provide other benefits, but their primary purpose is to leverage a government-sanctioned monopoly to maximize R&D’s return on investment. IP can’t do this to the maximum effect without putting what their companies sell at the forefront.


Simple nudges can facilitate this transition. Imagine this: if a VP came to you and asked you to quickly identify every patent in your portfolio that covers a certain product, could you do it?  It’s very easy for patenting to take a life of its own, for the patenting of a given technology to slowly separate from the product for which that technology was intended.  Being able to manage your IP portfolio by family, by taxonomy, and by product association is an important step.  


Product-centric IP is a mindset shift because it uses IP as a means to an end. It means setting your company’s current and future final products up for success versus letting IP be an end in itself. Market exclusivity for these products is the treasure, and IP is only the map.


As it happens, this vision of business and product-led IP is where business leaders’ expectations are going anyway, because of the current economic and technological climate. The budget to support a patent volume-maximizing operation is hard to get today. However, merely striving for a large volume of patents has never guaranteed success or value, and the days where quantity is a sufficient indicator of IP health are gone. IP is now an outcomes game, similar to the one licensing giants are playing.


Mindset #2: Proactive involvement - Business, product-centric IP requires active and early involvement in the invention process.


It’s often the case that inventors don’t give legal a call until they’re done inventing, or at least until their inventive concepts are fairly mature. If this is the regular pattern in your organization, focus on closing the gaps in what I call “information hygiene” first.


Start as early as possible in the innovation journey. Don’t wait for inventions to mature or markets to be validated to begin protecting. Acting too late on inventions is what leads to problems, like triggering a patent bar — when an invention has been publicly disclosed, like say by an excited inventor presenting at a technical conference. Lack of early IP involvement also runs the risk of getting beat to the patent office, or the risk of forfeiting trade secrets. Cleaning up your company’s information hygiene deserves to be a top priority even if you don’t adopt a product-driven IP strategy, and early intervention allows you to make good decisions later among the IP options.


An easy way to get started: maybe your company produces an annual R&D strategy or similar document that outlines the company’s innovation goals for the year. Find the team who creates this document and read it. It will tell you exactly where you need to focus, and then develop a strategy for each important project. It need not be extensive, but you might implement some controls that preserve trade secrecy, and also agree on milestones when a patent decision may be relevant.  


Aside from avoiding mistakes, if IP is involved early in the innovation cycle, innovation can be improved too. To me, the sweet spot of innovation is something that has strong demand from the market and qualifies for strong IP protection. People can love and buy something, but if you don’t have any patents on it, your competition will eat away at your profits fast. When you have time to understand the patent landscape of what your R&D team is working on, you give your inventors access to information that lets them make more informed decisions on where to invest.


Mindset #3: “Buying optionality” -  Use the tools at your disposal to give yourself the most flexibility you can for the future.


How you protect an innovation will change as it goes from idea to reality, and perhaps pivots. “Buying optionality” is what I call protecting early innovations in a way that preserves both budget and future flexibility, something I always recommend.


As such, it’s my basic philosophy that it’s a good idea to designate important innovation efforts as trade secrets as early as possible. Doing so “buys” you the ability to pursue patents later and at a nominal cost (the primary cost being people’s time investment in maintaining secrecy). What’s more, you can go from trade secret to patent, but not the other way around. It’s also helpful to encourage other low-cost/high-optionality patent features, like provisionals, continuations and PCTs. These all allow you to make a small bet that can be harvested later if business conditions merit. 


Obviously this thinking should be applied carefully based on your environment — the rate of technological change or competitive dynamics might place a premium on filing patents early. There are more ways to “buy options” later on in the IP lifecycle, but the important thing to remember is the general principle that you should only “spend” as much on protection as the maturity and market receptivity of the innovation warrants at the time so you can change course later.


Advancing from mindset to concrete action: How to create and execute a strategic IP plan


Understanding how IP must think to contribute to the business paves the way for strategic planning and execution, the process by which IP applies these mindsets to actual IP. For guidance on what strategic planning looks like and how to do it, read our upcoming 5-step guide.


IP embracing product centricity, proactive involvement, and "buying optionality" are key mindset shifts for becoming more aligned to company strategy and business value. By focusing on product-led strategies, engaging early in the invention process, and matching protection to invention stage, IP teams can evolve to become partners to the business — a relationship that is necessary for both companies and IP teams today.


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