IBM, Ceres and Mereo give tips on building strong IP department

Creativity and innovation were not words used exclusively to describe inventions at this week’s Managing IP patent conference in Paris . Panellists also emphasised that in-house teams should be as inventive in how they protect their IP as their innovators are when they discover the newest high-tech invention for their company.

Although the panellists came from very different industries, one common theme they emphasised was the need to put IP front and centre in their companies. Whether it was deciding how to protect a product or technique with trade secrets, or signing a royalty agreement with a much larger firm, speakers agreed that IP plays an essential role in the survival of their company.
“We’re a small IP licensing company for an exciting new fuel cell technology – clean electricity generation. IP is our lifeblood, not just an asset. It means the IP department is absolutely vital. And we’ve been doing some big deals,” said Clarissa de Jager, general counsel and director of IP for Ceres Power in the UK.
She began by telling the audience about her transition from working for a large company to a small one with a limited budget for IP. “Having a limited budget meant we had to be creative,” she said.
“There is more and more technology being driven by innovative people. But what are private practice or in-house doing differently? Do we have a fresh approach to meet the needs of new innovative tech companies? Or is it ‘same old’? Ceres Power has been doing business with the big boys; we have learned creativity,” she explained.
Working at a small licensing company, de Jager said she needs to get creative with how she negotiates with bigger partners. Addressing the audience she said that classical methods of negotiating might be outdated and she advised everyone not to be afraid to walk away from the negotiating table.
“The traditional legal model and contracting methodology doesn’t work. We needed to create a contract that nobody has created before. It’s like two porcupines in matrimony: they have very strong portfolios; so do we. We both have something to win but the approach is different. The IP department and the lawyers had the opportunity to do this. Old meeting new was challenging but we got there,” she said.
De Jager emphasised the important role trade secrets play in building a strong IP department. It is easy to estimate the worth of a patent portfolio when making a deal with a larger entity, but trade secrets play an important role at the negotiating table, she said.
“Trade secrets, it’s about time these have proper legislative recognition. In the deals that we did, they had of course seen all our patents as public information, but could not replicate our technology.  That was because the glue that held it all together was trade secrets and our clever, clever engineers. The value of the deal lay as much – if not more – in our trade secrets and people. The patents were a stepping stone,” she said.
Fiona Bor, head of IP at Mereo BioPharma in the UK, advised in-house teams to scrutinise chains of ownership. As the life sciences industry is shaped by heavy collaboration between different research institutions, it is essential for those in the industry to know exactly where their patents are coming from.
Further complicating Bor’s position is her company’s relatively small size compared to other pharma businesses. As the company has limited funds, she has to weigh carefully where she allocates her resources. 
“Small biotechs have less money. We need to make decisions on what we invest in compared to a big pharma that can throw money around. We have to be selective and hope for the best. IP is really the main asset for a small company, so everything about the company where I work is the IP,” she said.

Choosing the best

Small to midsized companies with limited IP budgets also have to be very selective when choosing external counsel. Instead of going with one well-known City law firm, de Jager told audience members that she tried a new approach of building a team of external counsel with mixed individuals across different firms, and also different countries.
“I think law firms are about people. When you find somebody you like and can work with, that is more valuable than the reputation of the firm. We handpicked a team we could work with, drawing from various firms across the world. 
“We had a mixed team and forced a collaboration with our external advisors. This is tough because they aren’t trained for that – our training is in an adversarial system and collaboration is something others do! Our counsel performed better for it. The pricing was interesting. You have to look at value and performance-based pricing – a foreign concept for most traditional law firms, although some pretend,” she said.
For a company like IBM where 2% of turnover comes from licensing, it is particularly important to build a strong IP team. Bruno Leduc, director of licensing and IP at IBM in Paris, said choosing the best IP team also means making sure there is a strong culture of IP throughout the company.
One way to do this is to be sure that creative people in his company understand that their progress depends on carefully recording their inventions.
“For many years before I arrived there was the idea that if somebody was good at their job you should make them a manager. This is not logical, so we changed it and made it more important in the evolution of your career for technical people to base it on their innovations,” he said.
A final piece of advice given by de Jager is to always strive for the best but also keep in mind that being innovative in your approach is good enough even if you are not being transformative.
“Innovation and transformation are different things. Defining it in our teams is hard. When you do an IP risk audit for your board, how do you present that?” asked de Jager.
With the rapid rise of artificial intelligence and inter-connected industries that rely on similar inventions for their survival, the role of IP departments is changing just as fast. How companies use their IP departments will become an important factor in their evolution.
De Jager ended her discussion with some wise IP life advice: “We need to apply our minds and be creative, starting with continuous improvement and working our way to innovation and then … transformation; even if we are the last industry to get there.”

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