Safeguarding intellectual property is possible even when patents are not stringently enforced, according to James Nebus, associate professor and chair of the business department at Suffolk University’s Sawyer School of Business. He discussed the topic at this year’s annual Innovation Research Interchange conference back in June. The IRI is a division of the NAM dedicated to advancing innovation management and creating best practices in the industry.
Protecting IP: In his keynote speech, Nebus outlined several actions taken by well-known companies to defend against patent infringement in “weak-enforcement countries.”
Raise barriers: One of the most successful strategies was raising the barrier to imitation, Nebus said. Companies that have used this method to guard against what Nebus called “product knowledge leakage” include DuPont and Dow. They have taken the following steps:
- Installed information technology defensive shields.
- Appointed trade secret managers.
- Conducted employee IP training.
Try a different barrier: Another way that companies have kept imitators at bay is to “bundle imitable products with complementary inimitable products,” according to Nebus.
- This is a strategy IBM began to employ many years ago. “When computer hardware first became a commodity, IBM … transformed themselves from a computer hardware company to a solutions and services company,” Nebus said.
- “And by doing that, they changed the parameters of the customer ‘buy decision’ from the price of the hardware to the value of the solution to their business.”
Advanced manufacturing: Another way to raise the “barrier to commercialization,” as Nebus calls it, is to use advanced manufacturing techniques that are not easily copied.
- Apple Inc. did this well in 2008, when it came out with its ultra-light, ultra-thin MacBook Air to compete with lower-cost Asian PC vendors, Nebus said.
- “The packaging technology that enabled that design … started with CNC, computer numerically controlled milling process, which at that time was really used for low-volume prototypes. They invested in manufacturing R&D to transform that process … to high-volume production,” he explained.
- “The imitators really couldn’t make that big investment, so Apple separated themselves.”
Parting thoughts: Nebus ended his talk with three takeaways for the audience.
- First, “an effective strategy consists of implementing the protection mechanisms necessary to raise one of the barriers above the abilities of the imitator.”
- Second, companies may require different strategies for different countries, especially if some are developed and others are developing.
- Finally, companies should decide where to locate headquarters not just “on economic factors. [Remember] to take IP risks into consideration.”