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New IP Strategies for the Digital Economy
Andreas Iwerbac, Director Group Technology & IP Intelligence, Husqvarna Group
Companies of today need to think outside the box when it comes to IP protection and how it can protect its business. A new business requires new strategies, but there is no “one size fits all” solution. Patents need to be combined with trade secrets and other protection mechanisms.
We are entering a new digital world where data is more valuable than ever. It’s the key to the smooth functioning of everything from the government to local companies. This is the digital economy, Industry 4.0. Some call it digital transformation, and servitization/platformization are other ways to describe it.
This digital transformation also drives completely new business models, where some of the most typical examples are:
• Rolls Royce selling uptime of aircraft engines with the help of IoT, AI, and digital twins
• Grundfos is going from selling pumps to offering water-as-a-service. Which even meant for Grundfos to compete against its own existing business model!
The digital economy creates new opportunities and threats for IP; how do you protect a service with IP? How do you protect your platform with IP? How do you protect your ecosystem with IP?
Patents are good for protecting physical products and innovations. Business method patents some might suggest. Well, even if you succeed in creating a business method patent, which has turned to become very hard nowadays, it’s still only available in the US, so in practice, the rest of the world is open for copying.
Instead, patents need to be supported by other protection methods like trade secrets and trademarks. If your USP (unique selling point) is a smart algorithm, keep it secret, don’t file for a patent, and instead invest in your brand, as the brand is IP that can live forever. However, brand value needs to be upheld. It does not stay valuable by itself forever.
Are you developing services (popular now to offer “Anything-as-a-Service”), then make sure to patent protect the basis/ fundamentals for your service. Break down your business offering in components and identify protection methods for each component. For instance, if you offer “transport-as-a-service,”; then try to patent the vehicle and the vehicle planner’s route since the service itself is not patentable. Add with trade secrets, build your brand, and most import of all, be quick!
Even if you think your idea is unique, but you take too much time trying to figure out what/how to protect while building your service, you would still be facing that someone else can come up with the same idea and launch before you and grab important market shares.
This can be summarized in the controversial statement; Speed is the new IP [phrase minted by Frans Johansson]
Take electric scooters as an example – anyone can, with capital, launch an electric scooter service. But how would you go about and protect that business?
• Build and patent better scooters? - Maybe, but will take too long
• Speed, be the first, and build a customer base. - Yes, that’s what is happening now; most capital will win.
• Scale, with capital you can scale faster - Speed again
• Differentiate and protect your USP? Do you have an innovative sharing/subscription model? –Think of how you can protect it, or keep it a secret.
• Partner adds value; for instance, with hotels, restaurants, or public transport operators - Speed will help; first come, first served.
• Having a strong brand will help – compare “Joes scooter” vs. Uber scooter
This makes it clear that you must explore all IP protection methods options because just one of them won’t be enough.