The Intellectual Property Guide: IP Literacy and Strategy Basics for Supporting Innovation

By Myra Tawfik and Karima Bawa

Intellectual property strategies to power your bottom line

In the innovation economy, intellectual property is among the most valuable assets a business can have. IP strategy isn’t just incidental to success, it’s a key driver—research shows that IP-intensive small- and medium-sized enterprises are 60% more likely to achieve high growth.

Myra Tawfik and Karima Bawa, two noted experts in the field of IP law and strategy, want to help you achieve greater success through the strategic deployment of your business’s IP.

More than just patents, IP encompasses confidential information and trade secrets, industrial design, copyright, and trademarks. Understanding the unique IP portfolio of your business and how to leverage it for maximum benefit can pay huge dividends. A strong IP strategy can allow you to command higher prices for your goods and services, increase your market share, generate new revenue streams, improve brand recognition, attract new investment, and lower your costs. You can also avert threats from your competitors by using your IP both offensively and defensively to protect your market and drive up your competitors’ costs.

Perfect for entrepreneurs, innovators, inventors, expert advisors and investors, this primer will sharpen your knowledge and help you make informed decisions about IP strategy to drive your business forward.

• Language: English
• Publisher: Brush Education
• Release date: Nov 4, 2019
• ISBN: 9781550597981

Myra Tawfik

Myra Tawfik is a professor of law and the EPICentre Professor of IP Commercialization and Strategy at the University of Windsor. She is also a senior fellow at the Centre for International Governance Innovation. She is an expert in IP law, especially copyright, trademarks, confidential information / trade secrets and industrial designs.

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The Intellectual Property Guide

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The Intellectual Property Guide

IP Literacy and Strategy Basics for Supporting Innovation

MYRA TAWFIK

KARIMA BAWA

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Myra Tawfik would like to dedicate this book to her mother, Ida Tawfik, and to the memory of her late father, N.H. Tawfik.

Karima Bawa would like to dedicate this book to her parents for encouraging her in her studies and to her husband and daughter for always being so supportive.

Table of Contents

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Preface

Part I: Introduction to IP and IP Strategy

1 Introduction to IP

2 Introduction to IP Strategy

Part II: The Different Forms of IP

3 Patents

4 Confidential Information / Trade Secrets

5 Copyright

6 Industrial Designs

7 Trademarks and Domain Names

Part III: Basic Concepts for IP Strategy

8 Common IP Legal Agreements and Contractual Provisions

9 IP Licensing

10 IP Enforcement Strategies

11 Using Different Forms of IP to Grow and Scale

12 New Technologies and New Opportunities

Conclusion

Appendix A: Suggested Online Resources for Further Information on National, Transnational, and International IP

Appendix B: The Primary Forms of IP

Glossary

About the Authors

Index

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Preface

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We met in 2014 when we were both appointed senior fellows at the Centre for International Governance Innovation (CIGI), an independent think-tank based in Waterloo, Ontario, Canada. We soon found common cause in our concern that Canadian innovators were not sufficiently equipped to leverage their intellectual property (IP), especially in a global context. Together, we have been working to address this concern by developing e-learning tools on IP strategy, presenting at conferences and workshops, offering university courses, and establishing experiential projects to educate innovators and a new generation of lawyers and business consultants. We are the co-creators of the online course Foundations of IP Strategy (https://mooc.cigionline.org). This book is our latest collaboration.

We are so grateful to the many individuals and organizations that have supported us in this project. We would like, especially, to thank Jim Balsillie for his leadership in advancing the public discourse on the role of IP in an innovation economy and for encouraging us in our efforts to make IP strategy accessible to innovators. We are also very grateful to Sandra Draiybe, Jim Hinton, Shawn Langlois, Rohinton Medhora, Neve Peric, and Jordan Vaeth for their insights and comments on the text, and to Laura Robinson for providing early background research and first contact with Brush Education. We would also like to express our appreciation to Kay Rollans, from Brush Education, for her skillful copyediting.

We also want to thank the Centre for International Governance Innovation for introducing us in 2014, and for the friendship and collaborative research relationship that has ensued. Our thanks as well to the University of Windsor, especially the Faculty of Law and the EPICentre, for facilitating our continued collaboration.

Finally, we can’t thank our families enough for their encouragement and good humour in helping us stay on task by, among other things, providing meals and airport pick-ups and giving us the space and time to write. For their unwavering support, we both want to thank Karim Bhimani, Alia Bhimani, and Ian Coffin.

Myra’s Perspective

I have been teaching law students a variety of different IP law courses since I began my academic career in 1991. Over the years, innovators have often consulted me about their IP, and time and again I’ve been frustrated by the absence of appropriate legal resources to which to refer them. In 2004, I developed a project, the Intellectual Property Legal Information Network (IPLIN) to train law students to provide IP informational services to the start-up and entrepreneurial community. This project really brought home to me both the gaps innovators have in their legal knowledge of IP and the fact that appropriate IP-related legal services are often hard to find and prohibitively expensive, especially for start-ups.

One of the problems, which I identified early on, is a weak IP ecosystem. In other words, I’ve noticed that the relevant IP expertise is lacking or, where it exists, it is not delivered in a timely way in the life cycle of an innovative venture. Following the IPLIN initiative and in an effort to further address these gaps, I have developed a number of projects and programs to offer basic IP literacy skills to the various players within the innovation ecosystem. For example, a colleague at our business school and I established a program for law students and business students to offer consulting and legal informational services to start-ups and entrepreneurs. I also established the first student run IP law clinic in the country to provide no-cost IP transactional services, including patent and trademarks searches and IP legal opinions, to innovators. Through these and other initiatives, I have witnessed first-hand the benefits of embedding IP legal knowledge at the very early stage of an innovative business idea. I have continued to build multidisciplinary projects and programs of this kind, informed by my research and policy advocacy on IP literacy.

My goals are two-fold. First, I am acutely aware of my responsibility to teach and train a new generation of IP lawyers to be more in touch with and responsive to the legal needs and strategic interests of Canadian innovators. Second, in step with this, my aim is to teach innovators and intermediaries within the innovation and commercialization ecosystem, including business development and technology transfer professionals, how to identify various IP legal issues at the outset. I want to empower them to make informed decisions about whether to protect their innovative ideas, as well as how, when, and where to protect them, and to have the necessary IP literacy skills to work collaboratively with their IP legal advisors to achieve their commercialization objectives.

Karima’s Perspective

I left Research In Motion (RIM, now BlackBerry) in 2012 after spending a number of years as their General Council and Chief Legal Officer. Since then, I have had the opportunity to work with other technology ventures, and one of the most striking differences that I have seen between RIM and these other ventures lies in their different approaches to IP. For RIM, IP was central to its DNA, right from its inception; this is not necessarily so for other companies.

RIM’s very first in-house lawyer was a patent lawyer. This is because, right from the outset, the company knew it had to have patents to succeed. RIM was also very deliberate about fostering a culture of innovation throughout the company. It did this by encouraging everyone to contribute ideas that could lead to patents and other forms of IP. For RIM, its IP portfolio had value in and of itself, in addition to improving the functionality of its products and services. The company rewarded and acknowledged inventors who filed for patents. In 2012, when I left RIM, the company had a vast patent portfolio. Today, it has grown to over 35 000 patents and patent applications, globally.

However, RIM did not just focus on patents. It impressed on all its employees the importance of confidentiality and protecting valuable trade secrets. RIM was also very conscious of protecting its industrial designs and its trademarks.

RIM used its IP, in all its forms, to prevent others from copying its products and services through targeted enforcement strategies. It also capitalized on its brand to attain a significant market share and to charge a premium for its products and services. RIM’s brand became so valuable that, in 2011, it was valued at over $6.4 billion. The value of the brand was, in fact, more than the market capitalization of the company itself. RIM even leveraged its brand to help scale globally, making deals for the sale of its products and services in hundreds of countries around the world.

There were downsides to rapid global expansion, however, and the company experienced problems that companies that expand into other jurisdictions commonly experience. For one, RIM had to contend with the phenomenon of patent trolls. Further, once it was very successful, it also became the target of competitors. These competitors tried to extract exorbitant royalties to compensate for their declining revenues by virtue of RIM having outpaced them in the marketplace.

While these challenges were daunting, facing them made everyone in the company smarter about how to manage IP. RIM became an even more prolific patent filer. Even though having a strong patent portfolio did not address the patent troll problem, it served as a deterrent to those who were trying to knock off RIM’s products. RIM’s patent portfolio also helped the company deter competitors from suing it for infringement, as well as reduce the royalties it paid to others by increasing its opportunities for cross-licensing agreements.

My experience at RIM and other, smaller companies has led me to appreciate how important it is for business people and the advisors who support them to be IP literate. I firmly believe that if business people and their advisors, mentors, and expert consultants had more of a profound appreciation of the impact that IP can have on their businesses, and if IP were more accessible to them, they could better use IP to their strategic advantage. IP rights can be very valuable business assets and, when properly managed, can provide considerable competitive advantages and new revenue streams.

Our Shared Objective in Writing This Book

Armed with these insights from our experience, we are writing this book to address two key issues in today’s IP ecosystem that require dedicated attention:

1. Building greater IP literacy skills among innovators

2. Building greater awareness of IP strategic thinking, especially in relation to the global innovation economy, among innovative ventures, and the commercialization intermediaries who support them

This book is intended for a very diverse group of innovators and intermediaries that include technology transfer and business development professionals, IP agents, and other nonlawyer IP consultants. It will also be of use to IP lawyers who are looking for a primer on IP strategy. The strategic ideas we provide are applicable to innovative ventures of all stripes, whether they be in their start-up, scale-up, or mature stages. Throughout the book, we will speak to you, our audience, directly.

Our hope is that this book will help you:

1. Increase your IP literacy.

2. Spot IP legal issues and identify next steps before they become big problems.

3. Develop an IP strategy that is in sync with your overall business growth strategy.

While the information in this book will be a valuable starting point for anyone seeking to learn more about the intricacies of IP today, nothing in this book is intended to be legal advice. We fully expect that you will need to consult IP lawyers and other skilled IP professionals as you develop your IP strategy. Our hope, however, is that this book will arm you with the knowledge necessary to ensure that you and your IP legal professional can, together, develop meaningful IP solutions tailored to your strategic business goals.

Before we jump in, there are a couple of stylistic elements to keep in mind. Because of Karima’s background with RIM, now BlackBerry, we use the company frequently as an example. To simplify things, however, we will refer to the company as BlackBerry throughout the book, including when we give an example that occurred before the company’s name change, which occurred in 2013.

As well, we will frequently be speaking about trademarks as a form of IP and providing examples of specific trademarks to illustrate our points. We will use SMALL CAPITAL LETTERS to identify these trademarks (instead of using the ™ or ® symbols that denote, respectively, unregistered and registered trademarks). For example, Dyson Ltd. manufactures many products under the trademark DYSON.

With all of that in mind, let’s begin.

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PART I

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Introduction to IP and IP Strategy

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1

Introduction to IP

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The goal of this book is to help you develop IP literacy and the knowledge and skills to deploy IP strategically. Part I will introduce you to the basic concepts of IP and IP strategy. Part II will tackle the most common types of IP rights that are used in today’s innovation economy. Part III will take a close look at the practical skills and considerations necessary for developing and implementing an effective IP strategy.

What Is IP?

Intellectual property (IP) is an umbrella term that refers to protection over certain creations of the mind. These include paintings, pieces of writing such as books, or manufacturing processes, secret recipes, eye-catching designs, distinctive symbols, or names used to market a product or service, among other things. The commercial value of these creations of the mind is derived from the legal protection they are afforded through copyright, patents, confidential information/trade secrets, industrial designs, or trademarks. That is to say that the actual commercial value of these creations does not belong to the idea or its expression itself, but to the legal regime that protects the idea or expression.

IP is fundamental to today’s economy, and its importance is growing. Why? IP is big business. Over the last thirty years or so, IP has become the mainstay of domestic economic health and growth, shifting the entire economic structure from one based mainly on goods manufacturing to one that depends on innovation and commercialization of new ideas. This means that IP literacy—that is, knowledge about IP laws—is necessary to a successful business strategy today.

IP and the Innovation Economy

The innovation economy is the global market that trades in new ideas. Today’s innovation economy differs from a goods- or manufacturing-based economy because ideas are intangible. In other words, they aren’t physical objects. You can’t touch them or hold them or keep them physically secure. Unlike a factory, which can be fenced off and protected by armed guards, it is very difficult to protect ideas in the absence of IP laws. For example, when someone has invested a lot of money and effort in trying to come up with a unique idea for a product, that person can do very little to physically stop a third party from copying and selling a product based on that same idea unless the law steps in.

The concepts of innovation and IP are not synonymous, but they are intextricably related. IP is a by-product of innovation in that it is one way—arguably the primary way—of commercializing, or bringing to market, innovative ideas. IP laws were developed to provide incentives for people to create, experiment, invent, and innovate without fear of free-riders or copycats. IP laws provide IP rights holders with the exclusive rights to do certain things with their IP for a certain period of time. IP protection is, therefore, typically a government-granted, time-limited monopoly. In this book, we use the term intellectual property or IP to refer to the various legal regimes in place to protect creations of the intellect. When we use the term IP rights or IP protection, we are speaking specifically of the rights afforded to you under those legal regimes.

While the legal protection IP affords is not new, it has increased significance and is leveraged in a different way in today’s economy. In the past, IP was primarily used to enable someone to grow a business around a protected, tangible output, most commonly a consumer or industrial product. In that model, the value of the business was centered more on physical manufacturing capabilities and job creation. The IP itself was not central to the value of the business and its operations. Today, IP is being developed, used, and commercialized by businesses beyond the purview of their core product or service line. It is a valuable commercial asset in itself, which can be bought, sold, or used as collateral independently of the tangible products or services the business offers.

For example, IP licensing is an important revenue-generating model. An IP license is a legal agreement in which the IP owner or licensor gives someone else permission to do certain things with the licensor’s IP in return for some form of compensation. Licensors are not necessarily original inventors or creators and do not have to engage in a business that actually employs the inventive or creative ideas they license. In some cases, parties who license IP may not even engage in a business that involves products or services. Their only business may revolve around securing revenue through IP licensing. Such businesses are called nonpracticing entities (NPEs). While this strategic use of IP can be legitimate in certain circumstances, it is often referred to disparagingly as trolling. We will discuss this and other aspects of IP licensing in part II of this book.

We are also starting to see new strategic practices in the context of patents, where companies are acquiring large patent portfolios as a form of mutually assured destruction. In other words, these companies aren’t making or selling the inventions that are included in their patent portfolios. Instead, they hold them as leverage to defend against or prevent litigation. This is a new strategic use of patents that we will explore in more detail in later chapters.

In the context of trademarks, trademark licensing is increasingly being used for the purpose of brand extension, which means that trademark owners are entering into strategic partnerships to extend their market outside of their core products or services. Brand extension as a strategic use of trademarks will be discussed in more detail in later chapters.

Despite this shift in how IP can be strategically and commercially leveraged, IP is still not generally well integrated into most companies’ overall business plans. We have often heard entrepreneurs say that they are too busy trying to manage payroll, marketing, and other aspects of their business to pay much attention to IP. They will only deal with IP issues when a problem arises. Others see IP only as a means of keeping their investors happy. In other words, these entrepreneurs aren’t proactive in protecting their own IP or in making sure they aren’t infringing on someone else’s IP. Instead, they wait for the cease and desist letter to arrive in their inbox, or operate under the assumption that IP is only good for satisfying funders. These are not sound IP strategies.

This kind of thinking about IP needs to change. These days, IP can be good for a company’s bottom line in a multitude of respects and everyone within the innovation ecosystem—inventors, creators, entrepreneurs, investors, expert advisors, and others—needs to understand this new IP reality and develop greater IP