High-impact innovation drives the discovery of new technologies and life-changing solutions, improving the way we live while benefiting a company’s bottom-line. As a follow-up to the Derwent Top 100 Global Innovators 2018-19 report, we held a webinar featuring notable speakers from Microsoft, Dow, and 3M. The discussion centred around the ways these industry leaders push boundaries to bring new ideas to market and foster a culture of innovation, and how IP and R&D teams work together to drive commercial success.
Below are the top ten takeaways from the discussion. The full webinar recording is available here.
#1 The IP department is an innovation enabler
Innovation is a costly and risky business. The uncertain proposition of turning an invention into a product that provides a return, if any, could be years away. The role of the IP department in that process is as an enabler, to help facilitate the process, to identify innovation no matter where it might come from and protect it where the company has business interests to do so. The IP rights help secure investments and provide comfort that the fruits of those investments can be protected.
The traditional view of IP as providing rights of exclusion is certainly alive and well but that’s only a slice of the pie. The most innovative companies are viewing intellectual property rights as part of the toolkit to advance the business and the objectives of the enterprise. The rights can be used in a lot of non-traditional ways beyond the simple right to exclude others.
#2 People and culture are the best assets for innovation
Our three panellists agreed – of all the innovation assets available, people are by far the most important coupled with a culture of collaboration and sharing that unleashes the creativity and innovation of those people.
Successful innovators hire the most talented creative people who are continually encouraged to generate fresh new ideas and to engage with customers and value chain leaders to understand challenges and opportunities in order to solve problems in novel ways and provide solutions that help customers succeed.
#3 Innovation is not just the province of R&D
Innovation is not just the responsibility of the R&D group – it comes from across the board, from the IP department, engineering groups, and product groups. It’s important to have a culture which is focused on continual learning and not being afraid to fail.
Danielle Johnston Holmes described how innovation lives within the IP department as well as across Microsoft. “I think it’s important as a legal department that you also being innovative and thinking about new ways of doing things. Are we embracing the latest technology to serve our clients in the most efficient and effective way? One of the things we talk about all the time is the digital transformation. Legal departments and law firms have not historically been known for being the most innovative places around. We’re really trying to break that mould by setting an example by going through digital transformation ourselves and talk to the industry and talk to our customers about how they can do that too.”
#4 Collaboration is a driver of innovation
At 3M, collaboration is the foundation of the innovation ecosystem both internally and externally. For their laboratories around the world, they have 46 different technology platforms that are corporate assets that are not owned by a particular business unit. Any researcher around the world can draw on these assets and combine them in new and unique ways to create new inventions and new products and businesses.
For Dow, collaboration is essential to innovation. They take inspiration from the rest of the world recognising that they can’t do everything. They have a network of technology scouts around the globe who look for new opportunities at universities and other small companies. They also fund research at leading universities as a way to extend their lab bench and to connect with creative academics.
#5 Customers drive innovation
Dow describes how innovation is customer centric: “We work with our key customers at their design tables and we find opportunities where technology solves customer problems and where applications of Dow technology is an enabler.”
A lot of innovation at 3M is also customer focused, working with them to try and meet their needs, to provide solutions to the problems they are facing. That helps to guide and prioritize both innovation investments and IP investments.
#6 Focus on quality, not quantity
For the most successful strategic innovators, the days of simply counting the number of patents are long gone according to Danielle Johnston Holmes. “We are moving out of the phase when companies are measuring themselves on how many patents they can get. When we look at strategy and what impact innovation will have on the company and how we are building up a valuable asset we focus on the quality of the patents. We are very selective about what we file patents for. We reject over half the ideas we get from the inventive and engineering community at Microsoft. We set a very high strategic bar in terms of what can be patented.”
Dow is focused on enabling high impact innovations that are really aligned to megatrends from urbanization where they have silicone sealants for glazing in modern skyscrapers, to energy efficiency with silicones for efficient LED road lighting, to weight reduction in modern vehicles with enhanced PU foams. Dow seek projects that result in products that impact at least 10% of the world’s population – high impact initiatives that move the world forward.
#7 Innovation is global
The emergence of mainland China companies is consistent with the proliferation of high-technology wares designed and manufactured in China for the global market. Dow established an R&D presence in China decades ago and today China is home to one of the best equipped innovation centres in Dow. In 2018, over 15% of Dow’s priority filings were in China, and that is second only to the US.
The vast majority of patents that Microsoft file are not just filed in the US – they file also in China, Europe, India and other countries as well. Their focus is very much multinational, which changes the strategy and processes used to manage their portfolio and how they deal with the different laws around the world to take advantage of some of those differences.
3M are certainly witnessing China moving from a manufacturing to a knowledge-based economy and they are also participants in that. They too have a large R&D investment in China and are generating IP as a result of those investments and looking for all the legal tools available to protect that intellectual property.
#8 Patent landscaping is as important as patent prosecution
According to Microsoft, the responsibility of an inhouse patent department is to identify and understand the innovation that is happening in the company and to make sure that’s protected in an adequate way. But the IP department also has a unique role it can play in identifying white spaces and identifying gaps where the company is not doing R&D that may be important and would help if they had assets in that area through strategic acquisitions and the like.
The IP group at Dow also gets involved with both patent landscaping and procurement. Although heavily weighted towards patent procurement, they are always involved in landscaping, working with R&D and intellectual capital management groups to try and figure out what’s next and where the right place to go is.
In 3M’s view, it’s increasingly important to have an external view. Being the best, most efficient generator of IP originating from within the organization is only part of the equation. It’s also essential to know the markets you play in, the IP landscape, and where white spaces might exist in those markets. That has become increasingly critical as the pace of innovation has increased. Some hot new technologies have incredibly fast development and product lifecycles, so being aware of the external environment and what the competitive landscape looks like is an essential part of a strategic IP function.
#9 Have a framework to measure the value of your innovation
3M have established a framework for ranking innovation which aligns around the distinguishing factors of their most important inventions. The factors look at how the invention fits internally within their own portfolio and priority technologies or R&D programs, but there’s also an overlay of the external valuation. How does the potential invention fit in with what the customers will value? The ranking system is therefore based on a combination of internal and external considerations – how it fits internally and the perceived marketplace.
Microsoft also has a similar type of framework which applies some metrics to different things around the patent filing decision. But timing is also important. If you are filing early in the life of a new technology, you’re really trying to predict the future and you’re not always right. It’s very important to look at patents at different points in the lifecycle to validate decisions about where to file, what fees and annuities to pay. There is a framework and a determination, but it is not a static one-time determination, it changes over the life of a patent.
For Dow, choosing where to apply R&D and protect intellectual property that results from it is one of the most important aspects of decision-making conducted by R&D and IP leadership teams. With finite resources, it’s important to prioritize where to spend time and money from both a corporate perspective and also on a business by business basis. The R&D must generate successful, profitable and sustainable new products. Dow choose to build on their strengths and focus on technologies where they have deep technical knowledge and advantage, and work closely with those in the value chain to target real market needs.
#10 Challenges of global innovation
Microsoft have large R&D centres outside the US in China, in India and in Europe. Managing the complete IP portfolio from one location is very challenging, so investing in having people embedded in those sites to help identify innovation and educate people is very important.
Dow manage IP with the same care and attention across the globe. The digital nature of data means being careful and vigilant all the time. Scientists and researchers have access to technical reports and data sets everywhere which is essential for them to do their jobs and most efficiently and effectively meet customer needs. Global access and usage of these valuable assets is carefully monitored whilst also managing cyber security and things like that. It’s challenging, but a standard part of doing business in a global industry.
For 3M, there is a very nuanced calculation to be made with respect to whether an invention is protected with patents or with trade secrets. Depending on the nature of the invention and the ability to protect it as a trade secret and at different points along the innovation life-cycle as you move out to a manufacturing setting, there are opportunities to create and hopefully protect trade secrets. There is a geographic component to that and assessing the maturity of the legal system and the ability to protect as secret information that is subject to that system.
For further insight and additional discussion of what makes a great innovator, listen to the full recording of the webinar available here.
