The protection of intellectual property, or IP, would seem to be at odds with the pursuit of open innovation, or OI — companies’ use of “external ideas as well as internal ideas, and internal and external paths to market, as [they] look to advance their technology.”1 The selective use of research carried out elsewhere can bring new ideas and capabilities to a company, render it more productive and profitable, prevent the company from having to reinvent the wheel and save it a good deal of money as well. While many companies struggle to align these two approaches, often finding that their IP strategy is a disabler of their OI efforts, this need not be the case. Companies that know how to use IP strategically2 actually make it an enabler of their OI activities and an enhancer of those efforts’ returns.

When an IP Policy Can Be Toxic

If your IP department is calling the shots about when and with whom you should cooperate, your OI strategy will be seriously limited. Many large companies essentially have a “no patent, no talk” policy: They will not collaborate with another party if it does not at least have a patent application in place. While this approach may prevent them from being accused of stealing technology, it also means they miss out on a range of potentially valuable external ideas that are as yet unpatented, or unpatentable altogether. Such a “one-size-fits-all” approach to IP is generally unhelpful to OI. (See “When IP Disables, or Enables, Open Innovation.”)

Large companies are not alone in this potentially misguided policy. Increasingly, universities around the world are insisting on their own IP terms prior to working with industry. Such approaches present a major barrier to collaboration with some of the brightest minds, choking off a critical input to OI. For example, Rolls Royce plc finds that it takes 18 months to negotiate a research collaboration agreement with a university partner; having routinely experienced such delays, the company is considering whether to terminate its extensive network