WIPOD – Page Points: Transcript of Episode 26

Intellectual Property and its Strategy

Farnaz Massoumian: IP is at the nexus of business, technology and law. And a good IP strategy is one that is able to translate one to the other in the most effective way. I know that sounds a bit theoretical, but that's kind of how I would, to make sure that the three dots are connected, and there's a feedback loop. And that feedback loop will be different, depending on the business. And to create that, I think, is IP strategy.

Lise McLeod: Hello Page Points listeners. Today on the podcast we have Farnaz Massoumian, author of the book entitled ‘Intellectual Property Strategy, In-house Perspectives', that was published by Edward Elgar Publishing. Farnaz is currently the Lead Patent Counsel at Vodafone.

Welcome to the podcast.

Farnaz Massoumian: Thank you very much. Thank you for having me.

Lise McLeod: In the book you define IP strategy as more than simply filing patents. How would you explain the difference between an IP portfolio and an IP strategy? And why do organizations sometimes confuse the two?

Farnaz Massoumian: That's a good question. I guess IP strategy is more about what you do with your intellectual property, how you protect it, and what's the point of protecting those assets. And it all goes back to what the business wants to do with the IP and IP spans across different rights, and it's not just about patents. So, it's definitely very different to simply filing patents.

And also in the process of filing patents, the various decisions that govern that include things like, why do we need to protect a particular technology with a patent? Why not keep it as a trade secret? Or what technology is this patent going to cover? And, what's the commercial reason for filing this patent?

And then where do you file the patent? Where is your business? Where are the competitors? And also, periodically reviewing that portfolio of assets to see are they still aligned with your business? Because patents are expensive.

So while filing patents can be a part of an IP strategy, it is definitely just one aspect of it. So an IP portfolio is just a portfolio of assets. IP strategy is what you do with that portfolio, why you have the portfolio and how that serves the business. And I guess in the book, I point to this pyramid of IP strategy.

And depending on the maturity of IP in the organization, at the top, you have IP as a business pillar. So it's very much integrated with business. And at the bottom it is a bit like, as you said, just filing patents, because the organization may have just started looking at protecting their innovations.

And there are various layers in between. And depending on that maturity, there can be that confusion between, the first layer is just, it's just freedom to operate, let's just file. So at that level, your strategy is just filing patents. But organizations quickly move through that. And that's generally governed by the costs that build up and the business asks, you know, why are we keeping these patents? And that's when the team might start to think, why are we filing this?

And then that also brings about, more mature questions around IP. Is it still relevant? Should we be doing something different? And then as the organization moves through these layers, and then the questions around IP become a lot more strategic, and there's then a big differentiator between you know, what IP strategy is, and then the filing just becomes one aspect of that.

Lise McLeod: One of the recurring themes in the book is that IP strategy should begin with business objectives rather than legal considerations. What changes when an organization starts talking about ‘IP for business' in addition to IP law?

Farnaz Massoumian: I always like to think about IP management as three buckets, if you like. The first one is looking at IP capture. So talking to inventors, talking to business, figuring out what innovations are happening and trying to just capture that. The middle bucket is filing, prosecuting, getting a patent to grant if the IP is patent. And the third bucket is using IP. And sometimes it's IP being used against you. And the three buckets need to talk, there needs to be a feedback loop between the three buckets. The IP law bit is the middle bucket, talking to the patent office, making sure that you have the right sort of claims that map onto whatever it is that you want to protect. So that that's the IP law bit.

So that's just, one aspect of it. The main thing is that the there's this alignment between the three buckets that you start with the end. So what does, what do you want to use this IP for? What's the commercial reason for filing this one patent or two patents or a thousand patents and then feed that back to the first bucket of, okay, so what sort of innovations do I need to be protecting? Because there might be maybe lots of innovations happening in business and not all of them may be commercially relevant in terms of, you know, patent protection, it might be some other form of protection that's needed. Or you might want to open source it for whatever reason, again, goes back to what the business wants to do with it.

And then once you've captured it and decided based on business considerations, what you need to protect, then that becomes a question of the legal practice of actually, how do we protect this best legally? A while ago, I wrote this article called the Rosetta Stone and I talked about patent attorneys or patent counsel being like the Rosetta Stone that translates business and technology through the legal language. So, that's what it is. You kind of take business assets that are based in technology and protect it through the language of law. The three are kind of interconnected, but that's how I would describe interplay between business and law.

Lise McLeod: Your book spans companies as diverse as ARM, Nokia, IBM, Siemens, Okado, Biotech firms, startups, and research centers. After studying all of these organizations, what characteristics did the most successful IP strategies have in common, regardless of industry?

Farnaz Massoumian: I guess an IP strategy is successful if it serves the business. I think in all of my case studies, IP was serving the business in a different way. And for some of them, IP, for example, and some large IP centric organizations, it's very much, you know, business driven.

IP strategies aside of that board level. And, it's a big profit center for some businesses. And so that's success for that business.

For some of the businesses that I looked at, it was very much of a defensive thing of like, you know, you want to have a portfolio so if you're attacked, you can basically have a portfolio to defend with and that defensive strategy is successful, even though they may not make much money from their IP.

So I think the theme was there is no one size fits all. It really depends on the business and in large corporations, I looked at one large corporation that had lots of different business units. And what was interesting that, each business units, defined their own. There wasn't like at corporate level, at individual business units had their own IP strategy because they had different competitors, they had different products, they had different services. And so, although there was like a central IP function, each business defined their own IP strategy.

And that was kind of a recurring theme that it just depends on what the business needs, what the budget is, and what it wants to do with their IP. And I guess, with startups and nonprofit organizations, that the business model is quite different. They're also companies where there isn't a product, you're not actually putting anything on the market.

It's for research centers, they don't actually have that ecosystem of customer suppliers, etc. So that's that's very different. And startups have lots of budget constraints. And then, you know, there's different levels understanding of IP in the business. So there are considerations around that.

So I think I can talk about startups in a different context, but yeah, that was kind of the recurring theme that success just means different things for different businesses depending on where IP sits in the business.

Lise McLeod: So one company wouldn't necessarily look at another company and copy their strategy?

Farnaz Massoumian: I think it depends on how similar the business models are. So for example, if you are, say, a technology licensing company where you don't have a product and your product is the intellectual property that you're licensing out and if another company comes along and their business model is also technology licensing, then they may actually have similar sorts of IP strategy.

Or if there are two pharma companies, that have certain products, etc. work on certain platforms, and they may have similar IP strategies. There's definitely a certain element of learning from each other, but ultimately, it just depends on the business model and what IP means.

Actually something I would say is that strategy is like seasons, you know, they change and businesses are constantly changing. So it doesn't mean that's because there was a certain approach to IP last year, the same approach needs to be adopted this year. Because companies' strategy may change a particular business unit strategy may change.

And so you need to adapt to that. And, you may want to look at another company who's like successfully doing X, Y, Z. You'll want to be doing the same; there's definitely learning to be had there, but copying without the context, I don't think works.

Lise McLeod: You introduce both a risk-based approach and a data-driven approach to IP strategy. How should organizations balance quantitative data with strategic judgment when making major IP decisions?

Farnaz Massoumian: I would say data, it's great for informing certain decisions, but commercial decision and the business context isn't something that data can provide. You can have a risk-based approach or that's kind of one particular approach that you can have because a lot of other legal considerations are risk-based. So if you put IP in that legal bucket, then you can have that risk-based approach. What's the risk of losing that IP or what's the risk of enforcing that IP, et cetera.

But in terms of data, to have good data, it's quite difficult and it's quite resource intensive and companies that do it well, do it really well. I think it makes sense if you are in a highly competitive environment and that data can really inform and also internal data.

External data can inform commercial reasons for filing, etc. Internal data is quite helpful in capturing things around, you know, where innovations are happening, where there should be innovations and that you're not capturing, etc. some data, depending on, you know, what you want to use it for, is important, but things like data from outside the company can be sometimes inside the company can be quite difficult to capture and analyze and companies that I've talked to they've got really good processes for capturing, they use data in a very efficient and very interesting ways.

Also for communicating to the C suite, this is what we're doing, this is what the competitor is doing, this is what you know, the landscape is going to look like in three years, five years, whatever. So but it's not something that everyone can do because it is quite resource intensive. So you basically need a team or people who can always monitor that. But I think there should always be a minimum level of data capture, at least internally to provide that feedback clip of where things are going right on where things are not going right necessarily.

Something that I found quite interesting in one of the interviews was that there was one business that they were tracking where innovations were coming from, with particular focus on understanding why there weren't many female inventors in the company. They were capturing all sorts of data around, when communications went out from the patent team, or when there were like all female teams, you know, were they getting more proposals from them. And so that was like a really interesting use of like internal data.

And they're kind of they were tracking everything like, you know, the times that the time of the day when proposals are submitted and things like that, and, when teams had changed or like different countries, etc. so that sort of thing, depending on the objective, if you want to promote, say, female inventorship, what seems to be the driving factors behind prolific female inventors and people who are actually doing a lot of interesting work, but they're just not talking to the patent team. Does it matter that there's, for example, a female patent attorney in the team, that sort of thing. I found that quite an interesting use of data.

Lise McLeod: In your experience Farnaz, why do organizations struggle to identify valuable inventions early on? And what practical approaches consistently improve invention capture?

Farnaz Massoumian: I always give the example of the Amazon one-click patent that the engineers behind that invention probably didn't think it was massively interesting or groundbreaking. And it probably involved good communication and teams of people who were responsible for invention capture, to identify that valuable invention.

And the recurring theme when I talk to inventors is that they come to me and say, if they're first-time inventors, you know, I thought you had to build a submarine to file a patent. Engineers who are experts in the field often overlook the importance of some valuable inventions.

I remember a couple of years ago, I had two inventions submissions from a team and they said one of them is pretty obvious the other one, potentially patentable. And when we did prior art search, we found nothing and then the patent office found nothing on either of them. So, both were quite foundational inventions, but the team just didn't think it was massively clever where it was.

And so I think that's where leaving it to the engineers. So I think good gateway measures where anything that goes out of teams, in terms of product and services, is looked at by the patent team just to make sure nothing's been missed. But I think generally, education is probably the best solution for capturing inventions and it's easier said than done.

Sometimes, especially in big organizations, it's difficult to know who you need to talk to or to reach out to. So identifying teams, innovative teams is maybe the first step and then having this kind of constant drumbeat of patents and having various outreach programs that go and educate the teams, for example, at some point, we ran drop-in sessions, patent drop-in sessions where people would just come with their idea. And then we gave them a little badge when they brought an idea they could put on their lanyard. Anything like that really helps people, even if they don't think their idea is massively clever to bring it forward. And then we always say, you know, let the patent team decide if it's clever or not. You just submit it. And that's worked quite well, to the point that we're pretty overwhelmed sometimes with the number of submissions, which is a good problem to have.

I know that with lots of remote teams we don't get to connect with people as much as, maybe we used to. But I do find there is something about being in the room with the technical people with innovators. And that is especially important because a lot of IP teams tend to sit in legal.

We have different buildings, and that generates that sort of artificial divide, if you like. And I think I found it very beneficial just to spend a day or two, a month maybe, just physically sitting in a different office. And people just didn't come to you like, you know, I've had this idea, and then they would never come with that idea if I wasn't there in person. I do feel that there is something to be said about proximity to innovators as well, in the office.

Lise McLeod: One message throughout your book is that communication is just as important as legal expertise. Why do you argue that psychology and storytelling are essential skills for IP professionals today?

Farnaz Massoumian: I think we all connect with a good story. Again, talking about children, there's this great parenting book that says connection before correction. And I think you do need to connect with people before you ask them to understand your message and do what you ask them to do. Especially for in-house counsel.

We spend our days talking to business talking to legal talking to technology. And it's important to be able to talk to different stakeholders in a language that is relevant to them. And you have all the outside counsel to rely on for legal expertise, if there is a legal question, but if you can't communicate that message, there's nobody who can help you to connect with that stakeholder who wouldn't talk to you.

So I think for that reason, communication is, obviously you do need to have some legal technical knowledge to be able to talk to whoever it is that you need to talk to. But using the right language is key to bring people on board so that people start listening because ultimately, what you would like to do is that people start talking to you and stop talking to people who they shouldn't talk to maybe if they want to disclose their invention. You know, get them to behave in the right way, basically.

Lise McLeod: Getting back to the startups. The startup chapters highlight challenges such as limited budgets, investor expectations, and freedom to operate. If you were advising a technology startup with limited resources, what would you suggest should be the highest priority investment in its IP strategy?

Farnaz Massoumian: Interestingly, I was talking to a private practice practitioner about this and something that they said that really resonated with me is startups if they can't afford to have an in-house counsel, it pays to hire a fractional patent counsel who can sit with them two days a week to talk to the owners to various stakeholders about capturing their IP, what they should be doing and really help to build up a good foundational IP strategy that moves because startups are a bit different to, they're like speed boats, as opposed to a big corporations, are tankers and take a very long time to move and sometimes a product has moved on and patents from a previous product hasn't even been granted yet, that sort of management where you might actually be losing money by prosecuting a patent, that doesn't matter, or you may actually be able to protect what you want to protect with a simple design filing, you don't actually need to pay for a patent, you know, that sort of thing. It pays to have, at least a fractional in-house counsel who can connect the dots to the business. Because sometimes what you find is that everything is done by outside counsel and they may not have that business insights in a way that an in-house counsel may have. So I think that would probably be the best investment in my view.

Lise McLeod: Your book discusses both patents and alternatives such as trade secrets, open source software, and contractual protection. How should organizations decide when not to patent an innovation?

Farnaz Massoumian: Again, for example, if you there's a technology that you want others to adopt, and you might want to open source it so that you can then build on that and once the market adopts that particular technology, then you can start building on that and everybody uses your platform so that might be a good approach if you want to open source a particular innovation.

And it also depends on, again, it goes back to what the business wants to do with the IP. For example, trade secrets are specific forms of IP that really work for some businesses like I don't know, chip manufacturers. But if you live in an ecosystem where, you are constantly contractually getting IP rights from suppliers, passing them down to customers. A lot of them need to actually be pinned on something or if your business is technology licensing, it may not make sense to have certain IP rights and not to have other IP rights.

So it just depends on what your ecosystem looks like. And I was talking to a particular industry where, the products live for tens of years, 50, 70 years, a patent lives for 20 years. So actually patent protection may not be the best form of protection for some of these things. You want to still protect the IP that went into building something, so in that sense, maybe contractual knowledge transfer is probably better than telling the world how you do something.

Again, it just goes back to what it is, on the opposite side, it is the fast moving consumer goods, things where it might be relevant for three, five years, it may not be. So by the time a patent is granted, do you actually want that or do you just want a quick, was a design more important, do you just want to get quick IP protection on a particular design rather than wait for a patent to be granted by which time it may actually not be covering the product anymore. So I think it just depends on.

Again, on the business and the product and the service and what you want to do with it.

Lise McLeod: After interviewing so many experienced IP leaders from around the world, what surprised you most? Was there a lesson or a pattern that challenged your own assumptions about effective IP strategy?

Farnaz Massoumian: I would say not surprised, but was humbled by how generous people were with their time and in sharing their experiences. And, so open to discussing, passing on that knowledge, because I think there's a huge wealth of knowledge and experience built through, different industries, different experiences. And, what I found is that people are willing to share if you just ask, how do you do this? And if you're stuck and you don't quite know, you know, it's okay, as long as something is not confidential, so that was something that I was really humbled by during all these interviews.

And when I started out, I had this kind of almost theoretical approach to what's good and what's not in IP strategy. If you're making lots of money from my IP, and your board understands IP, then that's really good. And if you're kind of at the bottom layer of that pyramid, then not so good. And that really challenged me because I think about what I found out was that no, not everybody needs to be at the top of the pyramid and being at the top doesn't mean good and being at the bottom doesn't mean bad.

And again, just depends where your business sits and it's okay if IP is not central to your business. And then you need to figure out what IP you need and what you don't need. And you maybe don't need thousands of patents in your portfolio, maybe a handful will do.

So I think that was the biggest takeaway for me. And you also learn how businesses do things. I think although businesses are different, there's no one size fits all, there's some common themes that I think work well for everybody. Things like, approach to communication, approach to, how you talk to business, different considerations, what sort of questions should you be asking when you think about your strategy.

So those things, I think they're definitely common threads that I found and across different businesses that the great learning experiences, for example, you know, how you track data, how you may use a risk-based approach, and that actually can probably be translated across different businesses and adapted. So yeah, definitely some commonalities, but lots of differences as well.

Lise McLeod: If readers were to remember only one lesson from the book, what would you hope it is?

Farnaz Massoumian: That IP is at the nexus of business, technology and law. And a good IP strategy is one that is able to translate one to the other in the most effective way. I know that sounds a bit theoretical, but that's kind of how I would, to make sure that the three dots are connected, and there's a feedback loop.

And that feedback loop will be different, depending on the business. And to create that, I think is IP strategy.

Lise McLeod: Well Farnaz, I would like to thank you for your time spent in sharing the contents of your book – a copy can be found in our knowledge repository. Listeners will find that this practical guide serves as a valuable resource for students and scholars of IP studies, business law and innovation policy. Its actionable frameworks are demonstrated through practical examples from different industries. Be sure to check it out.

Farnaz Massoumian: Thank you for the opportunity, Lise. Really great to talk to you.