Are You Making a Bad Investment?

Do you know what you are going to do with your patent?

 

Yesterday morning I sent the following tweet.

“All I hear is how expensive IP is.  Maybe you don’t understand its value; its purpose.  If you knew how to use it, you might spend more.”

This sparked a short twitter conversation with @ManagingIP about what aspect of IP is seen as expensive: protection, enforcement, or defense,  and whether IP spend is seen as a tax or an investment.

I think most companies see IP spend as a tax, and that the grumbles about IP being expensive are around protection, especially patent protection.  Maybe it’s because I’m listening to a lot of start-ups lately, and they’re short on money.

Or, maybe it’s because I’ve been doing this long enough to know that, even though IP enforcement and defense are expensive, the average company doesn’t really think about that aspect of IP protection.  The main event is protecting the invention or the brand, with little thought given to what they’re actually going to do with it once they get the patent.  (If I had a dollar for every time I heard, “You mean I have to enforce my patent?”)

The way I see it, many organizations in general view IP as a necessary evil.

Based on my 12+ years as an intellectual property attorney, I am under the firm belief that most companies protect their intellectual property out of habit.  They really don’t know why they want that patent.  They just do it.  And if these same companies just knew why they were protecting their IP and plan for its future use, they’d see a greater return-on-investment sparking more, and dare I say better, investment.  (Hence yesterday’s tweet.)

All of this got me wondering…

Why is the ‘getting’ so important?  I can’t think of any other business asset that people stockpile like patents.  Of course, I do understand that to use patents, organizations typically have to wait for a future event to happen, like an infringer comes along, counterfeit goods are being sold into your market, or someone wants to license your technology.  So, the stockpiling does make sense because you have to get it early for use later.

But what if you know that you will NEVER sue anybody for patent infringement?   Why do those companies still spend lots of money protecting their IP?

Is the amount of money companies spend on intellectual property worth it?

At what point is intellectual property protection a good (or bad) investment?  (And how do you know?)

If intellectual property is a business asset, that asset should bring the company value.  How do you measure the value IP brings to any given company?

Is it the amount of money the asset brings to the bottom-line?  If so, we’re most-likely talking about companies that engage in expensive licensing and litigation practices.  I would argue (based on the low number of patents that ever go to litigation) that’s not the average IP owner.

Or is the value in the portfolio size?  That strategy works for Japanese companies.

There is also value that is intangible, just like the asset itself.

There are a lot of factors that enter into answering these questions, like industry, type of technology involved, size of company, country of origin, risk tolerance, and 100 other factors I haven’t even thought about.

I have to admit that I’m not really sure how to answer these questions right now.

If you have thoughts, dear Readers, on what makes IP a good or bad investment, please let me know in the comments.

Big News from IP made simple

I am so happy to announce that I am offering a short guide with 10 helpful tips to get the most out of your intellectual property portfolio to all IP made simple Subscribers.

The guide is called 10 Things Every Business Should Do With Their Intellectual Property: A Quick IP Owner’s Guide. It is designed to give the typical IP owner a roadmap for how to best manage their intellectual property, and covers everything from knowing what the different types of IP are to how to plan and manage your intellectual assets.

Managing your intellectual property is not rocket science.  It is actually pretty simple.  It only requires that you to have a process or system in place (just like the systems you already have that manage your sales accounts, your finances, your customer service, etc.)  This Guide lays out the simple steps that every IP owner needs to take to create a great portfolio.

To get access to this free guide just go to www.ipmadesimple.com and type your email address into the box that says ‘email’ located in the big blue box on the home page. You will receive a welcome email with a link to the Guide as soon as your confirm your subscription to IP made simple.

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Be on the lookout for 2 new product offerings from me in the coming months.  Before the end of 2012, there will be two new ways to learn about intellectual property.

1.  I am in the process of creating a library of short tutorials on various intellectual property topics.  These short 10 – 15 minute presentations will allow you to learn everything you ever wanted to know about IP at your own pace.

2.  I will be also be offering you a chance to work with me one-on-one.  I will be offering a consulting option.  Under this program, on top of the 6 hours of IP training, I will conduct an IP audit of your business, review your contracts, and provide you with a plan to address your intellectual property issues.

More information on both of these products will be available shortly.

Websites, Webinars and Workshops. Oh My!

The Summer of 2012 has been the busiest on record for me and my business.  The new website is up-and-running, my first Workshop is scheduled for the end of September, and a FREE 4 part webinar series on IP basics will kick-off next Wednesday with a primer on trademarks.

I encourage you to explore the new website.  If you like what you see, sign up for the free webinar.  If you like what you hear, and want to learn more, please come to the IP made simple Workshop.

All the details are below:

My FREE 4 Part Webinar Series, Intellectual Property Essentials for Every Business, starts next Wednesday, August 29, 2012 at 11am EST with Trademarks 101: Protecting Your Reputation.  You can sign up for this free event at  http://www.anymeeting.com/PIID=E056DC85844F .

The rest of the series will take place as follows:

  • Wednesday, Sept. 5, 2012 at 11am EST, Copyrights 101: Protecting your Creative Works
  • Wednesday, Sept. 12, 2012 at 11am EST, Patents 101: Protecting your Innovation
  • Wednesday, Sept. 19, 2012 at 11am EST, Trade Secrets 101: Protecting your Know-How

 

The first IP made simple Workshop will be held on Thursday, September 27, 2012.

Time: 5 – 8pm

Location: The Accidental Gallery

300 Summer Street, #14

Boston, MA  02210

Cost: $297

You can check out details about the Workshop at my new website www.ipmadesimple.com.

Sign-ups for the Workshop are at www.ipmadesimple.eventbrite.com.

Houston, We are Go for Launch!

INTRODUCING

On a mission to end IP ignorance forever.

 

 

Trade Secret Theft is a Real Crime

And those found guilty go to a real jail cell.

Now you know that Trade Secret theft is on the rise and costing US companies billions of dollars in revenues.  You’ve also learned 10 important things about trade secrets and how to protect them.  Now, let’s look at three recent examples of trade secret theft that have made the news.

1.  Sanofi Aventis – Research Scientist.

Who stole what?  A former Sanofi research chemist stole thousands of chemical compounds (a company trade secret) from Sanofi.  The research scientist, a 30 year old Chinese national named Yuan Li, had worked for Sanofi for 5 years developing compounds for use in future drugs.

How did she do it?  Yuan Li downloaded the trade secret information and used personal e-mail or a USB thumb drive to transfer it to her home computer.

What did she do with the trade secrets? She tried to sell the compounds through, Abby Pharmaceuticals, the U.S. unit of a Chinese company.  Yuan Li was a 50% owner in Abby.

What happened to her?  Last month, Yuan Li was sentenced to 18 months in prison by a New Jersey Court.  She must also pay $131,000 in restitution.

2.  Akamai – Finance

Who stole what?  Elliot Doxer, who worked in Akamai’s finance department, contacted the Israeli consulate in Boston in 2006, offering to spy on Akamai and pass secret information to them.  The Israeli government informed the US government, which set up a sting operation.

What did he do with the trade secrets?  Mr. Doxer delivered numerous secret files to an undercover federal agent posing as an Israeli intelligence officer over a period of 18 months.  (No information ever made it into foreign hands.)

What happened to him?  Mr. Doxer pled guilty to foreign economic espionage and was sentenced to six months in prison, six months home confinement, and a $25,000 fine in December, 2011.

3.  Intel – Design Engineer.

Who stole what? A former Intel computer hardware engineer stole 13 secret documents from Intel’s facility in Hudson, Massachusetts. The documents are worth over $1 billion in research and development costs that described Intel’s new microprocessors.  Biswamohan Pani, an Indian national, worked for Intel from May 2003 to June 11, 2008.

How did he do it?  Mr. Pani resigned from Intel in late May, 2008, saying he was going to work for a hedge fund, and took his accrued vacation time until his last official day on June 11.   However, he started working at Advanced Micro Devices, Inc. (AMD), an Intel competitor, on June 2, 2008.  That’s right…he worked for both companies for more than a week.  From June 3 to June 11, 2008, he remotely accessed an encrypted system at Intel, and downloaded the documents to his hard drive.

What did he do with the trade secrets?  Nothing.  Intel discovered the breach very quickly, contacted the FBI who acted fast to stop any information from being used.  It is thought Pani intended to use the information to advance his career at AMD.  It is important to note that AMD denied knowledge of Pani’s wrongdoing, did not ask him to steal the information, and has cooperated fully with federal investigators.

What happened to him?  Mr. Pani pled guilty to 5 counts of wire fraud in US District Court in Massachusetts.  Each count has a possible sentence of 20 years, as well as a $250,000 fine.  The prosecutors are recommending that the judge sentence Pani to six years in jail. Sentencing is scheduled for August 8.

When I see these stories, part of me says “Really, you thought you would get away with this?”, but then I remember that trade secret theft is a real crime.  These are the people who were caught.   How many more are out there have been successful?

Obviously, the examples here involve big name companies with thousands of employees, but don’t think that trade secret theft is merely a problem for big business.  The risk exists for big and small companies, as well as universities, research facilities and non-profits alike.

If you want to protect your organization’s trade secrets, you must be proactive.  Identify them early.  Have a plan to keep them secret.  Educate your employees about intellectual property and what it means to you.  Don’t assume everyone who works for you has your best interests at heart.

I Have a New Role Model

It’s Spanx Founder Sara Blakely.

What do I love about her?  Her passion for her “crazy idea”.  She lets nothing get in the way of building her business.   She learns what she needs to know to move her business forward.  She rolls with the punches.  She thinks outside the box.  She’s an amazing problem solver.  (Heck, that’s how she came up with a product that’s made her a billionaire!)  Her energy and spunk amaze me.   (If only I had half her gumption.)  She just has the right attitude to be a successful entrepreneur.  She is a great combination of a great idea, passion, and a willingness to just go for it.

Check out her story in these videos on Inc. Magazine’s website.  For those who are unfamiliar with her and her product, Ms. Blakely is a self-made billionaire (yes, that’s with a ‘b’).  She made her fortune selling her unique line of women’s shape wear.  I first read her story in an article in Forbes Magazine last month.  Then, I found the videos.

To top it off, she tells 2 great intellectual property stories on video 1.  First, she talks about how she wrote her own patent(!) and second, how she came up with the name Spanx.  She actually did IP research.  I just about fell of my chair when she talks about her experience on the US Patent Office website.  If only all entrepreneurs could be this IP-focused.

She inspires me to be a better business woman.

I hope you enjoy these videos as much as I do.