“In the Halloween season and beyond, corporate leaders should take note when the IP department comes to the office dressed in these metaphorical costumes.”
Things are not always as they seem; the first appearance deceives many. ~ Phaedrus, ancient Athenian aristocrat
CEOs, general counsels, and other senior leaders in a corporation often take a hands-off approach to IP strategy and execution, heavily delegating these functions to in-house IP counsel and related team members. This isn’t surprising given the esoteric nature of many IP matters and the extraordinary demands on senior leaders coming from all corners.
The trust placed in corporate IP departments may be substantial, carrying with it largely unfettered discretion to set the IP agenda. Unfortunately, those outside the IP field may feel ill-equipped to verify that such trust is well placed. The worst-case result may be misaligned IP and business strategies, enormous spend, and missed opportunities.
Even if they lack IP savvy, corporate leaders should be on the watch for warning signs that their IP team may not be high-functioning. When they perceive such signs, leaders should investigate.
A deeper examination may reveal that all in the IP department is copacetic. Or, it may indicate the need for change, whether modest or transformative.
What are potential warning signs, and how does one spot them?
In the Halloween season and beyond, corporate leaders should take note when the IP department comes to the office dressed in these metaphorical costumes.
- A bushel of apples in an orange grove — plentiful and yet fruitless for the harvest.
An enterprise’s IP team may appear busy, expending money and energy on traditional focus areas of many an IP practice, such as the pursuit and maintenance of patents and trademarks, analysis of competitor IP to avoid infringement, offensive and defensive IP litigation, and drafting and negotiation of agreements.
In some cases, though, the veneer of IP activity obscures fundamental misalignment between that activity and the realities of the business.
For instance, patents may be of limited importance in industries in which (a) foundational technologies matured and fell into the public domain long ago, (b) trade secrets are primary value differentiators, or (c) consumer loyalty derives from aesthetics, not innovative technical features. Yet, companies in those industries may fund robust patent filing programs year after year at the behest of in-house IP counsel who rely on such programs to justify their jobs, or who don’t test fundamental historical assumptions.
As a result, prodigious IP activity yields fruits that are incompatible with the true needs of the business.
- A cardboard skyscraper — tall on quantity, thin on quality.
Like others in the general public, many businesspeople view patents as powerful property rights per se. They don’t appreciate that patents have varying scope and jurisdictional reach and are vulnerable to potential invalidation. Similar misconceptions apply to trademarks, copyrights, and trade secrets.
IP experts know full well that quality is key. For example, the value of one strong patent may eclipse the combined value of one hundred weak patents.
Nevertheless, IP departments commonly tout quantity-based metrics, such as total patents issued, total patent applications filed, and total trademark registrations, as proof of sound IP strategies. Further, they may make categorical pronouncements that can’t be readily disproved, such as: “We need our large portfolio for deterrence or cross-licensing with competitors.” Or: “We need a larger portfolio than our fiercest rival to woo investors.”
Absent a concerted focus on quality of IP assets, budgets may balloon over time. Precious monies may be diverted from more valuable uses.
- An IP tycoon — commanding and controlling.
As with any collective within an enterprise, an IP team rises, falls, or remains static largely as a function of those charged with leading it. Gifted leaders set audacious objectives and equip and inspire team members to achieve them. Mediocre leaders sink the ship, bringing down the crew in the process.
IP teams “led” by those enamored with building kingdoms, legislating from on high, and soaking up the spotlight with C-suite executives never deliver what a company, its investors, and its employees deserve. They’re too consumed by superintending their creation to nurture talented team members and think boldly.
- A dictionary minus the definitions — versed in big words, shrouded in mystery.
The domain of intellectual property is richly complex. Its specialized nature and intersections with other complex areas inevitably may be confusing to those outside its walls. Even IP practitioners dedicated to one area of IP may not be conversant with concepts in another practitioner’s bailiwick.
Unless their IP departments communicate clearly and completely with stakeholders, companies risk blindly venturing into places they ought not go. They may end up with very little to show for their investments in IP, or far less of a return than should be reasonably attainable.
- A brick wall on a busy street — arbitrarily obstructionist.
A central mission of high-value IP teams is to partner with internal clients to enable business success as expeditiously as possible. Such teams offer solutions, articulate relative risk of available avenues, and help guide clients to final decisions. They humbly recognize their role as facilitators.
Once in a while an IP professional comes along with a diametrically opposed philosophy and actions to match. He or she believes that the principal function of the IP department is that of gatekeeper. Lawyerly weight is to be thrown around; risks are to be avoided at all costs; and business advice is considered the sole province of businesspeople, not IP counsel.
Likeminded individuals or teams constantly say no to clients, make mountains out of molehills, impede progress towards finish lines, and otherwise hinder more than they help.
- A decadent layer cake — hierarchical and bloated.
Under ineffective leadership, a corporate IP department that isn’t subject to meaningful outside oversight increasingly may come to embody a host of negative attributes, with significant detriment to the corporation. Examples include bureaucracy, autocracy, inefficiency, low morale, lackluster performance, and the absence of innovation.
In such cases, it typically falls upon change agents, such as general counsels or executive business leaders, to call for an assessment and accounting and, if warranted, to break the cycle of dysfunction and underperformance.
- A firefighting robot — tactically expert, strategically unimaginative.
Day-to-day tactical execution is bread-and-butter activity of IP teams. When undertaken expertly, important outcomes can be accomplished, such as the securing of strong IP based on employee invention disclosures, the invalidation of competitor patents, the winning of infringement lawsuits, the taking down of third-party websites that infringe company copyrights or trademarks, and the negotiation of technology development agreements.
However, a singular focus on blocking and tackling prevents a company from maximizing the use of IP as a lever for competitive advantage. IP teams should look holistically at their company’s business, both in the present and futuristically, and architect and execute on-point strategies. They also need to keep a close eye on operational aspects of their practice and continuously improve delivery of services to internal clients.
- Sleepy (from Snow White and the Seven Dwarfs) — passive and seldom on screen.
In some enterprises, the IP department seems to fly habitually under the radar, interacting primarily with pockets of client stakeholders, such as R&D personnel and marketing teams. Top executives only hear from the IP team situationally. For example, touchpoints may occur in connection with an IP dispute, at an annual patent awards ceremony, or when prompted by such executives, such as to address shareholder queries or to comment on news releases about competitor activities.
Infrequent, reactive engagement from the IP team may reflect an outsize focus on the here and now, rather than a broad visionary approach in which the team seeks to lead the company down highly impactful, nontrivial paths.
Spooked by the Costumes?
If you fear that your corporate IP team is comfortably wearing one or more of the above costumes, don’t rush to judgment. Consider it a wake-up call to begin a consequential engagement with the team, as well as to educate yourself more generally about IP strategy and execution. Seek out others who can furnish fresh, neutral insights, including individuals within and outside your company.
Shine critical light on the IP team and its performance. Ascertain: (1) how the team views its role, (2) what it focuses bandwidth and budget on, (3) how its members perceive the effectiveness of the chief IP counsel and other department leaders, (4) what the team is accomplishing now, and (5) what it aspires to accomplish in the future.
You may be pleasantly surprised by what you learn. Or, you may discover that your fears are well-founded: It’s time for a costume change to best serve your company’s short- and long-term interests.
Join the Discussion
7 comments so far.
xtianNovember 1, 2021 10:20 am
@Cortrone: Very astute insight.
Paul F MorganNovember 1, 2021 09:26 am
All too true about some IPL in-house counsel [but not providing a solution]. Also, management over-dependence on advice of only an outside counsel having an inherent self-interest in litigation billing instead of getting an independent second opinion is an at least equal such management problem.