Founders and Investors: Check your IP Culture

No matter how excellent an IP strategy or policy you will implement to make sure your IP remains under your control, brings value to the company, or otherwise supports the company’s wider strategy, it will most likely not work in the long run if your corporate culture is not up for it.

A good example of a company’s IP culture is how founders and senior managers personally view or speak of IP matters.

Think Elon Musk for example. While Musk no doubt has said a lot of things, the fact that he openly told CNBC’s Jey Leno during a tour around the SpaceX Starbase facility that ‘patents are for the weak’ will most certainly guide the other decision makers within the company as regards. Another example are the founders of Rovio, the home of ANGRY BIRDS, who once commented their counterfeiting issue by saying that ‘piracy may not be a bad thing: it can get us more business at the end of the day’. Probably so, but will this motivate the company in its fight against piracy? Probably not.

So, if IP rights are perceived as the necessary evil, the thing that no one understands, or otherwise neglected or de-prioritized, it is natural for the company to struggle when trying to take advantage of them, even if it suddenly wanted or had to. And situations where IP rights might quickly turn relevant are endless in growth companies whose next strategy reform or new market area might be just around the corner.

Take branding for example. A company having won clients because of its technological supremacy might think that branding is not their priority, so why invest on trademarks? When the business grows, the company enters new markets with its product but is suddenly approached with a legal letter from another tech company claiming trademark infringement. To avoid court action, the company comes up with an alternative product name, but soon finds out that operating a split brand is practically difficult and costly, and causes confusion among the clients. And so the company decides to rebrand itself, this time investing on trademark clearance and brand protection too.

Another example is licensing: the act of giving others a permission to use your IP which is often seen as a great mean to increase sales and business potential of the company. However, building an IP portfolio worth licensing to others requires not only various internal and external efforts – such as making sure your technology is patented or otherwise protected and your IP rights enforced against those not respecting them – but also willingness “to walk the talk” in the company’s everyday life. If the team is inexperienced in IPRs or worse still not willing to accept that IPRs are in fact helping the company, the efforts to build a solid licensing business may quickly wither away.

So how do you then build a successful IP culture that supports the company’s strategy?

By first of all appreciating that there does exist cultural elements that will guide the company’s decision making in IP matters, and second by recognising what those elements are within your company. If hard to grasp at the given moment, try exploring what key persons think of IP in general, what kind of assumptions they have, and if they have prior IP experience – either good or bad. This is because where people are coming may often imply where they might go in the future, if given the opportunity to decide.

The next steps towards the desired IP culture will then be about changing the unfavourable cultural elements and fostering the ones that support the company’s strategy. Easier said than done, of course. However, if the ones making the decisions understand the basics of IP law, are willing to seek expert advice when needed, and are not giving bad examples for others to follow, the desired IP culture will most certainly begin to take root in the organisation, and gradually guide the entire organisation in making the right choices for the company.

So, to summarize, if you are a founder or an investor of a growth company where brands, innovations or other intangible assets play a crucial role, or will do so in the future, be conscious about the company’s underlying IP culture and prepared to manage it to the direction required by the company’s strategy.