Process 3: Choosing Commercialization IP Strategies
As explained in Chapter 8, commercialization IP strategies can be either passive, reactive, or proactive. Though proactive commercialization strategies should be encouraged in most cases, a mix should be maintained between passive, reactive, and proactive strategies. This is because in cases in which the use of a certain group of IP assets as competitive weapons is not certain, a passive strategy should be adopted. Exhibit 13.7 provides a guide on when each of these strategies should be used by reference to the primary form of IP. Again, it is noted that trade secreted material should be considered in connection to each of the primary forms of IP.
Generally speaking, passive strategies are used whenever it is competitively harmful to offer the IP for commercialization. When competitive conditions are clearer, reactive strategies can be used to build the business value of the IP, while proactive strategies should be used once the value of the IP is more ascertainable. Proactive strategies should also be used whenever the organization aims to establish the new technology as a market standard. Hence, as the IP identity moves on the continuum, from being a competitive weapon to becoming a business asset, commercialization strategies should get increasingly proactive.
Processes 4 and 5 relate to IP portfolio management where the building of the portfolio in a way that enhances the organization's competitive performance is entrusted to strategic planning units at the business unit level. The emphasis is on the function, which may also be performed by senior management of the business unit or any other strategic planning department. Process 5 relates to leveraging the part of the IP portfolio where IP commercialization doesn't jeopardize the competitive position of any of the business units. IP synergy teams should be formed to leverage such of the IP as are cleared for proactive commercialization. As outlined in Chapter 8, the same function may be performed by a licensing, or business, unit provided its perspective is multifunctional. These teams can also be formed as communities of practice (CoPs) with strategic business focus directed to a technological area or market segment.
This process involves the creation of IP strategy units at the business unit level, to oversee defining and managing the IP assets that are the basis of the unit's competitive advantage. These units are mainly responsible for operationalizing the competitive IP strategies and applying them to their business needs. Each unit should:
1.
Examine the IP portfolio to identify groups of IP that are at the basis of its competitive advantage by reference to scope of use, market share, and business unit growth rate.
2. Devise a plan for the development and augmentation of the IP identified under 1 above through the use of the appropriate competitive strategies.
3. Address in the development plan the use of value transference strategies for sustaining the competitive advantage relating to the identified IP group. This should be a multifunctional exercise.
4. Align the various IP plans with the business strategy and objectives of the strategic business unit division, or the whole organization. This can be done with the central business development or growth department.
5. Determine the situations where litigation will be used as a competitive weapon to defend the market position established by the IP. Exhibit 13.8 provides a guide as to when to settle, litigate, or offer a license.
6. In cases of litigation, the following factors should be also considered:2
The organization's position in the market
The effect that enforcement could have on the organizational image or reputation
Any legal or other ramifications (e.g., adverse effects on working relations, or retaliatory measures)
The effectiveness of the enforcement action
The probability of success and expected awards of damages
The costs involved
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