Laying the Groundwork for a Reflective IP Strategy

“Without a strong healthy business nothing else really matters–not even IP.  A successful IP [plan] is one that follows the business and strategizes to meet its goals,” says Cynthia Raposo, Senior Vice President of Underarmour. The questions that need to be answered that go into formulating an intellectual property strategy–like when the company wants a profit, whether it is interested in attracting investors or academic collaborations or buyers, whether it will become a public or global company, what its niche in the market is, how fast developments in the field are– can’t be fully answered without not only consulting the business people, but being on the exact same page as them.

Instead of trying to warp business around IP or thinking about why and when IP might make incentives for business, as has been the case in the scholarly literature, we should start shifting the focus and instead discuss IP strategy in the context of business growth and development. This year at the AIPLA Mid-Winter Institute, the panels allowed us to take a detailed look at seven companies (Underarmour, RedHat, GlobeImmune, Cubist Pharmaceuticals, Harley Davidson, Ventana Medical Systems, and Global Partner Holdings) who have done just that and have progressed from small start-ups to well-known, profitable companies. Their successes emphasize why and how IP strategy should change as the business changes.

Setting Up the Company

It’s not news that many business actors simply don’t think about IP protection in their day-to-day work. For example, construction workers are frequently thinking of inventive on the job solutions to problems that could be covered by IP protection, but most people in the construction field, even architects and engineers, either have no clue what remedies are available to them, don’t know how to protect copyrights, or don’t understand why they may want copyright protection, says Scott Ryan, Executive Vice President of Global Partner Holdings. Sure you can distribute documents to train and educate people on what IP is and how it works, but this isn’t really going to transform their way of thinking and it’s not going to get that two way communication that is essential to informing the IP strategy.

You need to develop an IP strategy that anticipates the progress of the business going forward. “To do that is to really understand the business,” says Paul T. Parker, Partner at Perkins Coie. The dialogue shouldn’t just be about flooding business people with information about IP but also about informing IP attorneys about the business. To develop an IP strategy the attorney needs to be able to know things like the deadlines of decision making events, when the product launch is, whether the ultimate goal for the start up is exit, acquisition, or IPO, and so on. For example, you may not be sure where to invest the money, but the business person will, says Robert Gomulkiewicz, professor of law at University of Washington School of Law and author of Licensing Intellectual Property: Law and Application. To be able to answer all those questions, IP attorneys should develop a structure that enables them to work with the business people at the moment of conception of an idea and speak with them in a language they can understand to develop trust and foster innovation.


Although the setup is different from company to company, all seven companies had a formal internal structure that ensured IP people really understood the business and vice versa..

At Underarmour, they established “patent huddles.” Much of the company’s earlier success had been due to marketing and branding strategies, so when it came to branding and marketing the business people understood importance of trademarks. “However, when it came to the role of patent filings, building an IP portfolio, and understanding how those filings could impact business, it [the understanding] didn’t go as deep,” says Raposo. The legal team found itself making decisions on what to patent and not to patent without sufficient input from the business. To fill this gap they established patent huddles: once a quarter team of business leaders at the vp level and above gets together to decide which of the invention disclosure forms submitted by employees merit patent investment by the business. They provide each leader a scorecard that highlights the key evaluation criteria. The inventor makes a presentation and answer questions, and at the end of the huddle, scorecards are reviewed. As a team, the leaders decide which inventions to patent, what kind of patents are required, and the scope the patent should cover. “As a result of huddles, we succeeded in developing company awareness of patent process and merits of patent protection…and [Underarmour’s] patent filings increased worldwide,” says Raposo. Additionally, members of the patent huddle continue to encourage employees to file invention disclosure forms and seek advice from legal team. Informing just the business people isn’t enough. Raposo tells her legal team to go to meetings to learn what the business priorities, concerns, and motivations are. “I cannot emphasize enough how important this two way collaboration has helped me to build a really strong legal team at Underarmour,” she says.

Cubist took a totally different approach. “We don’t do patent meetings; that didn’t work for us,” says Timothy Douros, Chief Intellectual Property Counsel & Head of Litigation at Cubist Pharmaceuticals. In fact, they don’t try to push IP onto the business people in a conspicuous way at all. They don’t do awards for patent filings or numbers of patents awarded or even talk about them. The idea is to create the subtle message that this is just part of an employees job. They shouldn’t be rewarded for doing something that in the pharmaceutical industry is essentially required. To bridge the gap from the other side, they have a chief IP counsel for each product and that person sits in on the project team meetings with business development folks to gauge what the business priorities for that product is, enabling them to allocate the appropriate resources accordingly.

Doerfler from Harley Davidson sits in on the marketing team’s brainstorming sessions. It’s difficult to talk someone into changing their idea once they’ve already invested just to work around some legal strategy they don’t really understand. Unfortunately, they’re invested in the idea almost instantaneously, but being there right at the start gives you a chance to chime in as the idea is being formed. “It takes time to sit through all that brainstorming, but the benefit comes from avoiding a situation down the road where you have to steer through ideas with a greater burden, “says Doerfler. Of course sometimes you’re not able to get in front of the problem and mistakes happen. But even in those situations, Harley Davidson has a formal structure for making sure those mistakes don’t get repeated and ensuring that they deliver better practice moving forward. Doerfler keeps track of all these mistakes, and every two years he presents these mistakes as a reminder.

Doerfler also had a formal structure to discuss IP when he worked at Singer Corporation, American manufacturer of sewing machines. “We had 4 R and D facilities, and every other year I would take global tour and give the basics on IP for new employees and for those that needed a refresher to keep IP forefront in their minds,” he says. It helped him create a dialogue with all the business people and let them know that they could access him whenever they needed.

Sebor from GlobeImmune stresses that in companies with extremely technical products, its not only important to connect IP and business but also IP and technical. Getting the IP person a seat at the business table and the tech table enables a proactive and responsive IP strategy that can move in flux with the company’s development. (Additionally getting the IP person at the tech table gives them a chance to inform innovators on what they can do to help or hurt IP strategy.) The main idea here is that the IP person needs to take into account all the different goals of each group when creating strategy, even external stakeholders like investors, academic collaborators, and corporate partners. “[Maximizing IP strategy] does not mean you sitting alone with your pile of papers it means creating a good valuable IP team developed with many different stake holders,” she says.

Besides allowing each of the teams to really understand each other, having mixed teams can help foster innovation. “You need to have an engineer, an attorney, a business guy all on the same team to spur innovation. You can’t just have a bunch of attorneys sitting in a room,” says Margaret Hagan, Stanford Institute of Design fellow.

Building an infrastructure and talking in terms they understand will help you become that trusted business advisor and get the best information to craft the most tailored IP strategy. After all, the thing you do have in common is you both care about the product and the company as a whole. So know that company through and through. Doerfler who worked at Elvis, Singer, and Harley says he always got asked whether he bought company products while he worked there. “I can name almost any Elvis song in two notes, I own 5 sewing machines and one surger, and I’m debating between two bikes to buy this year,” he says.


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