The Aberdeen Group recently released a new study titled, The Protecting Product IP Benchmark Report: Safeguarding Design Intellectual Property in a Global Market. Aberdeen argues that with the globalization of innovating activity, guarding against misappropriation of IP assets has become a focus for firms as they try to secure their bottom-line.

Of the firms Aberdeen surveyed, protecting IP in the innovation cycle has become a top priority for 63% of firms. Further, 48% of firms lost market share due to compromised IP, 44% lost product sales, 30% faced commodification of a product and 27% met lower margins on new products.

A central insight of the report is that the globalized reach of technological innovation, and the nature of digital products, increase the risks of IP misappropriation. Protecting IP should be done with the modern landscape of innovation in mind, thus, the Aberdeen recommends a set of practices called “IP friendly collaboration” between different parts of the innovation chain, where firms can minimize IP misappropriation but continue to activities central to their innovation efforts. These "best practices," currenty leveraged by respondents, include:

*81% use general IT security solutions, such as network monitoring and other safeguards.
*71% use DRM solutions, which focus on securing design data in documents and files by controlling access to and actions on information based for individuals, often based on role, function, and/or company.
*67% employ design collaboration tools – such as tools for visualization in neutral formats –that allow modifications level of detail to protect IP.
*59% adopt PDM systems, which frequently also have mechanisms to control access to information and actions taken it.
*56% employ design translation/degradation designed specifically to reduce the precision and content of product designs to protect IP.

First, firms must protect IP at the firm level when working internationally. In nations with weak IP protection, danger of misappropriation does not simply come from competitors and potential free riders; but also partners and subsidiaries that may not take special precautions to guard against external leakage of IP. Legal oversight becomes more important for the innovation cycle in nations with weak IP laws. While large firms may simply place overseas counsel, such costs could hamper smaller firms.

Second, firms with globally distributed R&D centers must account for different IP regimes when mapping their R&D allocations. In nations with weak IP protection firms have several options to guard their work (see here, and here). However, those nations may be diminishing important knowledge flows to their societies and limiting the amount of foreign investment by forcing global firms to take extensive precautions to protect their IP.

Third, IP can facillitate R&D collaboration In nations with strong IP protections. Firms can pursue more sensitive R&D, and not have to rely on quasi-trade secret protection to guard their IP assets. Thus, firms will share more important information with partners and subsidiaries, thereby increasing the likelihood of successful R&D.

The global innovation economy, where firms distribute R&D over wide geographical locations, leverage decentralized inputs via licensing of external knowledge and collaborate with other entities in commercializing technologies, raises new challenges for IP management. IP becomes more important against this backdrop because it is often the primary value in commercial exchanges. Firms can undertake private measures to protect their IP, however, without public protection of IP through strong IP laws, firms will be limited in innovating activities and contributions to local technology industries.

posted by Noel Le @ 4:30 PM | International

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