Ownership, Exclusivity and wanting it all

🏖️ Daydreaming of a vacation home you'll see twice a year? Here's a reality check. And yes, we will still be talking about IP.

Ever fantasize about owning a vacation home you'll visit as often as a dentist appointment? Sure, you might be able to swing the mortgage, but there are smarter ways to spend your hard-earned money. Crashing at a friend's place? Priceless (assuming they don't charge rent in the form of questionable cooking experiments). Renting a cosy cabin? Fantastic! Timeshare? Eh, maybe for the adventurous soul who enjoys a roulette wheel approach to their vacation décor. The point is, you wouldn't buy a house in every city you visit, right? Unless you do... and in that case, we need to chat (and maybe compare beachfront property listings).

Hey there! Welcome to The Innovation Matrix newsletter! 

Innovation: we all want to do something with it, but how to tame the beast? 

We’ll capture the essentials of innovation management through the lens of collaborations, intellectual property, commercial strategy, sustainability, and impact.

💸 Let's talk about owning stuff (and why sometimes you shouldn't)

This whole "ownership" thing? Overrated. Just ask my overflowing sock drawer. The same goes for intellectual property or IP. The problem is that oftentimes, many are focused on ownership or exclusivity. They want it all! But perhaps that is not even necessary and is therefore a mistake. What choice you make between ownership and license depends on your business interests and your business model. In many cases, a license can be a much smarter move than full ownership.

Here are a few reasons why:

• Cost-Effective: Licensing lets you access valuable IP without the hefty upfront cost of acquiring and maintaining it. Think of it like renting a Tesla instead of buying one - you get the thrill of the ride without the long-term financial commitment (and the potential for a surprise battery replacement bill). 
• Flexibility: Licenses can be tailored to your specific needs. Need the IP for a limited time or specific project? No problem! This allows you to adapt to changing market demands without being locked into ownership. Think of it like borrowing that fancy new power tool from your neighbour instead of buying one that you'll use once and then trip over for the next decade.
• Expertise: Sometimes, the people who create the IP are the best ones to manage it. Licensing from an expert can ensure your project benefits from their ongoing innovation and support. Plus, they'll be the ones dealing with any pesky patent trolls who come knocking, leaving you free to focus on conquering your own business Everest.

Of course, there are situations where ownership might be the right call. But before you dive headfirst into owning and managing IP, consider the advantages of a well-crafted license agreement. This move frees you up to focus on what you do best, without the hassle of becoming an accidental IP landlord (which, let's be honest, sounds about as exciting as managing a vacation home you only visit twice a year).        

Challenge the exclusivity obsession - use the Wedding Cake model for smarter IP licensing

Exclusivity in intellectual property (IP) often holds an almost mythical allure in business negotiations. It sounds impressive, but for many, the understanding of its true value remains limited.

The good news? Negotiations for a license don't have to be a binary choice between absolute exclusivity or complete openness. Exclusivity is just one piece of the licensing pie, and a skilled negotiator can craft an agreement that grants the licensee(s)  the rights they need while reserving valuable rights for the licensor (or owner of the IP). Savvy negotiators can leverage a powerful tool: the Wedding Cake Model of IP distribution. 

Think of a license agreement like a vacation rental, not owning the whole house. Exclusivity is like having the entire place to yourself for your trip, but there are other options! A skilled negotiator can craft an agreement that gives you access to the parts of the IP you need, just like renting a specific room or floor in a vacation home. This way, you get what you need for your project, and the licensor (the owner) can still rent out other parts of the IP to others. It's a win-win, and way less commitment than buying the whole beach house!

Slicing the IP pie: The Wedding Cake model explained

Imagine your IP as a delicious wedding cake, with each tier representing a distinct set of rights. These tiers can be further divided into:

• Geographical Reach: Where can the IP be used? This could be a specific country, region, or the entire world.
• Application: In which application will the IP be used? In what market?
• Duration: For how long is the license valid?
• Exclusivity: This tier focuses on the specific context of IP use. Who can exploit it? Is the IP still licensable to others or not?

Tailoring exclusivity for your needs: an example for those yoga addicts!

Let's say you've invented a revolutionary new type of yoga mat that plays calming whale sounds when you achieve a particularly challenging pose (because, why not?). A major sporting goods company wants a license, but they're only interested in selling it in North America.

The Wedding Cake Model to the rescue! You can grant them an exclusive license for North America while reserving the rights to manufacture and sell the same mat (with dolphin noises, perhaps?) in Europe and Asia. This allows you to maximize your profits by catering to different markets with different preferences.

🎮 Before you negotiate, think about your Freedom to Operate!

Before diving into the specifics of your licensing agreement, it's essential to consider your "freedom to operate" the intellectual property (IP). This simply means having the legal right to use the IP without infringing on any existing patents, trademarks, or other intellectual property held by others.

Why it matters: By carefully defining your core and non-core technologies and market areas – both currently and for the future – you can ensure your licensing strategy aligns with your long-term vision. This analysis helps identify any potential conflicts with existing intellectual property that could restrict your ability to freely use the licensed IP.

Remember: A well-crafted licensing agreement takes your freedom to operate into account alongside the specific rights you'll be granted. This ensures a smooth and successful partnership for everyone involved.

So, ditch the vacation home fantasy (unless it involves a moat and pet dragons) and consider a smarter approach to both your getaways and your IP. Ownership isn't the only option. IP licensing empowers you to access valuable intellectual property without the burden of full ownership. The Wedding Cake Model lets you craft a license agreement well-tailored to your needs. 

Share your thoughts and experiences! We're always eager to learn about creative solutions to IP challenges.

Until next time,

Mirjam and Deepika

Join the Discussion: Collaborate & Adapt in a Changing Landscape        

Our work focuses on supporting our clients to create as much value as possible in their co-creation activities and building strong ecosystems in the market of their choice.

Our latest posts explore news impacting ecosystems and value chains, proposing collaborative projects to address these changes. We invite you to join the discussion and connect with us if this resonates!

1. On the importance of having a business savvy IP strategy instead of a generic one-size-fits-all-IP-policy, seeking expert advice timely, and the benefits of a ‘use it or lose it’ clause.
2. A call for universities and startups to improve IP agreements, business acumen, and design and use simple and visual collaboration contracts for win-win innovation.
3. Insights from the ‘Future of Flight: a Runway to Sustainable Aviation’ symposium organized by the Study Association for Aeronautical Engineering V.S.V. Sipke Wynia of the Inholland University of Applied Sciences in Delft.

Ready to level up? Our innovation management consulting and support is all about practical results. Let's cut through the noise and build a strategy - for innovation, collaboration, or intellectual property - that works for your business. Efficiency, creativity, and success – that's the game plan. Let's chat and make innovation work for you. Your next move starts here. Get in touch with Mirjam and Deepika on Linkedin! 

Who Benefits from Our Expertise?

• Companies small to large: Whether you're part of a large corporation, an SME, a nimble startup, or a growing scale-up.
• Visionaries and Builders: Investors, incubators, accelerators, and those shaping the future of business.
• Knowledge Hubs: Government entities, academic institutions, and tech innovators.

Our focus areas: We dive into Innovation Strategy and Management, Collaborations & Partnering, Intellectual Property Management, Contract Management and Contracts Negotiations.

What we bring to the table: We offer Workshops, Lectures, Strategy Consulting, Coaching, Commercial Advice, Negotiation Support, and Contract Simplification and Visualization to empower your innovation journey.

Who do we empower? We are here to boost innovators, founders, decision-makers, and leaders in their quest to transform brilliant ideas into real-world solutions and impactful results.

Why The Innovation Matrix? Learn more about our story and work here.