A primer for business managers on the whats and hows of intellectual property protection
NEW DELHI :
Q&A | Rodney D Ryder & Ashwin Madhavan
Intellectual property (IP) is the biggest asset class on the planet in terms of value, estimated to be at least $5.5 trillion in the US alone," write Rodney D. Ryder and Ashwin Madhavan in Intellectual Property And Business: The Power Of Intangible Assets.
Ryder, a technology, intellectual property and corporate lawyer, is founding partner at the New Delhi-headquartered legal consulting firm Scriboard. Madhavan is co-founder and director of Enhelion Knowledge Ventures Pvt. Ltd, an online education company with a focus on law, management and engineering programmes.
In an email interview, Ryder and Madhavan explain why it’s essential for businesses to learn which intellectual assets to protect and how. Edited excerpts:
You write that “IP is not for lawyers alone". Why must businesses understand the different types of IP protection available?
Madhavan: IP does not only mean your company logo. There are several intangible assets that hold immense financial value if used properly, such as copyrights when it comes to book publishers, trade secrets when it comes to restaurants and fast food joints, and one area which is often neglected—domain names, the online trademark for any business enterprise. Companies should understand that protecting domain names is crucial in the online sphere.
What are some of the factors to take into account?
Ryder: The IP system allows for monopolies over original creations. All IP strategy must be based on the needs and strategic objectives of the corporations. In the present era, wealth flows to those who can acquire and direct intellectual capital. Knowledge is not limited by scarcity—deployment is the key.
A famous example is IBM taking its patent portfolio “out of the attic" and creating IBM Global Licensing.
What are the non-traditional forms of IP?
Madhavan: Trade secrets, domain names, plant varieties, circuit layouts for semiconductors, confidential information, designs and domain names—such forms have been introduced in the past 14 years. Let’s take the example of industrial design. Earlier it could only be protected under the Copyright Act, but after the enactment of the Designs Act in 2000, an industrial design will get protection under the Designs Act.
Facebook has applied for 60 trademarks in China—how does this “blitzkrieg strategy" compare with other forms of trademark protection?
Madhavan: We need to understand the background: Large companies have invested huge amounts of time and money to fight legal disputes related to trademarks because of poor trademark strategies. Let’s take the example of Apple Inc., which has fought various trademark disputes with local Chinese companies on Apple-related trademarks such as the iPad. This happened because Apple did not protect its vital brands across various classes in China.
Although Facebook has not yet been allowed to enter the Chinese market, it is not taking any chances and has registered across various classes. We use the term blitzkrieg—“lightning war" in German—to make people understand that in the corporate world it is essential to take swift and carefully planned actions. Similar to what the German military did in the early part of World War II. Swift and decisive trademark strategy would help an organization avert trademark-related legal troubles in the long run.
How does the idea of open innovation fit into this culture?
Ryder: Companies that use open innovation are open to the use of external IP through licensing. Open innovation is the need of the hour. Corporations are willing and wish to source and use external knowledge, ideas, intellectual assets, and technologies to complement their internal capabilities. Needless to say, a critical look at IP audits is integral to open innovation.
Facebook’s deployment of the API platform is a prime example of open innovation and Mark Zuckerberg’s genius—it allowed for important industry partnerships, like the partnership with Zynga.
Open innovation creates a proverbial “win-win" model. IP is crucial to open innovation as the “platform" company needs to have a solid IP protection strategy. Larger companies have problems continuously innovating, and must partner with the smaller companies to bring innovation. IBM, Google and Microsoft are prominent examples of how to leverage their IP to protect their alliances.