Do You Have the Right In-House IP Legal Team to Successfully Execute Your Business Plans?

As a leading business strategist, you understand that your company must “innovate or die.” In embracing this philosophy, you realize that intellectual property (“IP”) strategy is critical to your ability to successfully execute your company's business plans. You also realize that your company's IP constitutes a business asset that can (and should) be monetized, traded and sold, just like any other asset. And, like other assets, the goal should be to maximize these assets. Accordingly, you consider IP to be a critical aspect of your company's business plans.
Unfortunately, the people that manage your IP assets, that is, your in-house IP legal team, may not be eager to introduce innovations into the IP management process that can significantly increase IP asset value. Your company may therefore be leaving significant “money on the table” because you do not have the right IP legal team in place.

I am now an IP Strategist and owner of an IP Strategy and Consulting Service (more info here: http://www.jackiehutter.com/). However, in my tenure as an in-house IP counsel at a multi-national corporation, I frequently experienced surprise and disappointment when my legal managers declined opportunities to introduce innovations that would indisputably maximize the value of the company’s intellectual property assets. I say “indisputably” because it was clear from benchmarking “best in class companies,” there was no doubt that inexpensive and fairly simple functional and process changes in the way our company managed and exploited IP would result in significant revenue return and efficiencies. Notwithstanding the clear benefit of introducing such innovations, my company’s IP legal management’s view effectively was “if it ain’t broke, don’t fix it.”

In the months since I left my in-house counsel gig, I have spent considerable time trying to figure out why the corporate legal structure pushed so hard against innovating in the area of IP management. It would be easy to say something disparaging about my former managers, but this would neither be productive nor appropriate. Rather, I will use the words of a brilliant innovation strategist and say that the corporate IP legal managers that I reported to were “stuck in the old model.”

What is this “old model” of intellectual property strategy and management? As discussed in a great article by Markus Reitzig of London Business School in the Fall 2007 Sloan MIT Management Review (abstracted here http://sloanreview.mit.edu/smr/issue/2007/fall/11/ and here http://www.gpatents.com/global_patent_strategy/2007/12/ip-management-m.html), the classic IP management strategy protects core research and development only. This “old model” effectively allows R & D personnel to (quoting Professor Reitzig) “automously follow their interests without paying attention to the future appropriability of their inventions.” In this traditional environment, corporate legal and technical units worked independently of the broader business, presumably to forward primarily the interests of the technical and legal personal in protecting inventions, irrespective of the value of the invention to the company's bottomline. Business people rarely became engaged with IP management because IP matters were not included in the company's business plans.

In the “new model” of IP management studied by Professor Reitzig, the importance of IP is recognized throughout the organization. Corporate IP stakeholders are no longer solely legal and technical personnel. In short, this “new model” decentralizes the management of IP so that business people and C-level management are engaged at all stages of the IP development and management process.

As should be evident, the decentralization of IP management requires in-house legal managers to cede significant decision-making authority regarding IP management to business people. For managers who have the best interests of your company in mind, such decentralization should raise few issues. For these forward-thinking legal managers, sharing control of IP decision-making authority will be the right thing to do for long-term success of the company and they will welcome introduction of a team approach to IP management.

However, not all in-house legal managers will readily accept this decentralized IP management model. There are a number of reasons for such reticence: for example, lawyers are often strongly risk adverse and, as such, tend to rely on methodologies that have proven to be successful in the past. (In my opinion, IP lawyers tend to me even more risk adverse than the average lawyer because of their scientific backgrounds, which imparts a higher degree of conservatism to their legal practice.)

This is not to say that your company’s in-house IP management team is not capable of innovating in the area of IP management. To the contrary, in recent years, as shown by the year over year success of best in class companies, many IP lawyers have been at the forefront of innovation in IP management methodologies. However, irrespective of whether your company has embraced the “innovate or die” culture, you should not assume that innovations in IP management will emanate from your in-house IP lawyers.

Admittedly, IP management is somewhat arcane and inaccessible to the non-IP professional. So you may wonder how, as a business strategist, you can discern whether your in-house legal managers are capable of and enthusiastic about introducing new IP management methodologies that will allow your company to maximize the value of its IP assets. Hard or not as it is to understand the world of IP, to make sure your in-house IP legal team is capable of executing your company’s business plans relating to IP assets, you must take the effort to find out if you have the right team in place.

A fairly easy way to gage the likely effectiveness of your in-house IP legal managers to innovate is to have a conversation with your legal team about how other companies, especially those that you know are at the forefront of IP innovation, manage and exploit their IP assets. This conversation will naturally lead to how such techniques can create value in your company. If your in-house IP managers display a lack of knowledge, or worse, a lack of enthusiasm for these benchmarked IP management innovations, you will obtain a clear signal that you may not have the right in-house IP legal team to lead your company into the new world of IP asset management and value creation.

As you know, the right team is critical to execution of your company's business plans. In today's world of IP, your business plans include your company's IP. Make sure you have the right IP team in place, or your company will fail to meet its business goals.