IP assets in a post-pandemic world part II - What exactly is IP culture?
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In recent years, IP culture and its significance has become a topic of discussion in IP strategy work. The bigger the roles of innovation and brands are in a company's strategy, the more essential it is to understand the company’s IP culture. Namely, the saying goes that culture eats strategy for breakfast, and this is also the case with IP matters.
In the previous part of this article series, I addressed the IP filing activity of recent years, and concluded that it has remained surprisingly busy despite the pandemic. With good reason, this trend has led many companies to ponder over their IP issues and perhaps also from a more strategic point of view. Should we monitor our own trademarks or the IP filing activities of our competitors? Which measures should be taken now if we wish to license our technology in the future?
Traditionally, strategic questions related to IP assets are approached from the perspective of a so-called IP strategy. Within this strategy, a company defines its objectives regarding its IP assets and the means to achieve them, considering the company’s overall business strategy. Nevertheless, in addition to IP strategy, the organization’s IP culture and the way that it serves the company’s IP strategy has become, perhaps, even a more important question.
So, what exactly is IP culture and why should we you be interested in it? This is what I will look at in the following section.
Part II – What exactly is IP culture?
IP culture may sound like a fancy term, perhaps even fancier than IP strategy – so what exactly does it mean in practice?
To borrow the theses of a famous Finnish expert of organization cultures, Panu Luukka, IP culture may be defined as consisting of everything that is happening in the organization’s IP matters when nobody is watching. Thus, it does not only include the guided processes or concrete IP measures but more broadly all the conscious and unconscious values, structures and operating models related to IP matters. These, as well as their different embodiments, make an organization behave the unique way it does with respect to its IP affairs. IP culture is shaped during a company’s entire operation history through interaction with its different stakeholders. It may grow weaker or stronger or change depending on how the organization decides to act or not to act regarding its IP issues.
IP culture is especially evident in how management views the organization’s IP issues.
For instance, Rovio's executives Peter Vesterbacka and Mikael Hed once attracted plenty of attention when they, perhaps even a little surprisingly, praised the positive impact of counterfeit products on Rovio's business, which flourished at the time precisely due to large-scale IP licensing. Similarly, a couple of years ago, the founder of Tesla, Elon Musk, publicly promised that his company would not sue anyone who, in good faith, takes advantage of Tesla's patent protected inventions to promote electric cars. This patent commitment of Tesla has since ended up on the company's website - with appropriate clarifications, explanations and conditions, of course. Moreover, Juhani Mykkänen, the founder and chief technology officer of Wolt, also recently commented on the future of intellectual property rights, stating that “the current trend is that you are considered a little embarrassing if you make too much of an effort to guard what is yours”.
While the sayings and actions of corporate management have a big impact on a company’s IP culture, they rarely reflect the entire truth. For instance, Tesla and Rovio have both become known to the public for actively defending their IP rights. Tesla has even been assumed having abandoned its German battery plant project, and the public subsidies in the amount of over € 1.1 billion, to protect its innovations and trade secrets. The success story of Wolt also includes research into trademark protection and availability. Mykkänen, Chief Technology Officer, has stated that despite the modern trend towards transparency, IP rights will certainly still have their place in the future.
Why should you be interested in IP culture, then?
In short, because every business has its own IP culture, even if it is not very well understood.
A company’s IP culture has a notable impact on the company’s behavior and decision-making regarding its IP matters. For instance, if a company’s success is based on open source solutions, decisions to protect its IP assets may be difficult to make because of its IP culture - when transparency is in the company’s blood, why start acting differently? Similarly, if a company operating in the domestic market has not had to consider IP matters after registering its business name, it is natural to treat any similar competitor’s brands during the internationalization phase the same way as before. That is, by doing nothing, as no actions have previously been necessary.
How, then, can the company's IP decision-makers ensure that the company's current IP culture does not prevent it from achieving its strategic goals or solving other problems that may emerge in the future?
Hardly anyone would be able to provide easy answers to this question. But just as with corporate culture management, managing IP culture starts with understanding the company’s IP culture. There is need for a thorough understanding of the company’s current practices concerning IP matters and, above all, the basic assumptions that guide the IP thinking of the company’s staff. Which IP matters are important in your work? How does this show in your actions? Why do you act the way you do? Why could you not act in a different way?
If, judging from the answers, the organization’s decisions on IP issues are mostly made at random, achieving the related goals is also most likely to depend on luck. Therefore, the company's IP culture cannot be considered particularly strong. It is also possible that an organization imagines that it knows which decisions should be made regarding its IP matters, when in fact the decisions are wrong in terms of their goals. In this case, the IP culture may be described as dilutional.
In both above mentioned cases, conscious effort should be made to change the company’s IP culture. In this case, however, a truth that must be accepted is that this is a long process that cannot be achieved simply by copying the cultural elements of other successful IP companies. A young growth company for example will not instantly turn into a success story that licenses its patented technology globally, even if it was to acquire the IP processes, guidelines and contract models of large international companies or recruit the best IP leaders to secure its new strategy.
The desired IP culture must therefore always be built from the organization's own point of view. Those IP cultural elements that are likely to work should be selected for experiment, and accordingly, those that are not likely to become part of the organization’s routines should be discarded. Namely, the desired new IP culture may only come true by making right choices at the level of the entire organization every day. Only this way, the new IP culture will gradually begin to take root in the company’s values and ways of operation. But when that finally happens, more and more representatives of the organization will be able to act on IP issues in a way that is right for the organization, even when nobody is watching.
It is therefore worth striving to be aware of the company's own IP culture. Only a conscious IP culture can be nurtured, managed and, if necessary, changed according to your company’s strategy.
Sources:
Panu Luukka: Yrityskulttuuri on kuningas, Helsinki 2019
Elon Musk: All Our Patent Are Belong To You, Tesla, 12.6.2014
Tesla, Patent Pledge, 12.6.2014
Vin Gurrieri: 'Angry Birds' Maker Wins $2.7M Ruling Against Knockoff Seller, Law360, 4.5.2015
Tapio Nurminen: Saksassa aloittava Tesla varjelee innovaatioitaan, Talouselämä 44/2021
