Does IP Strategy Have to Cripple Open Innovation?

  • Oliver Alexy, Paola Criscuolo and Ammon Salter
  • October 01, 2009

How your IP strategy might be killing your open innovation activities — and what you can do to make it an enabler, even a builder of industrial ‘ecosystems,’ instead.

Courtesy of Siemens

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.

The Leading Question

How can companies make IP an enabler rather than a disabler of open innovation?

  • Companies need to balance the use of open and proprietary innovation strategies.
  • IP can generate licensing revenue while also fostering collaboration.
  • Companies must drop the one-size-fits-all approach to IP.

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.