Improving Your Return On Innovation
Don’t get carried away
We often get excited about Innovation, especially since most of it is fun. Some people can get carried away and forget that the name of the game is to make money. So how can we calculate and improve our return on Innovation? If we do make money then we should be maximising the amount that we do make. This is important both for stakeholders and to reinvest in future enterprises.
One of the major ways that we can improve the return on Innovation is to make sure that we have possible patents in mind during our research and prototyping phases. Do not leave this any later as IP that is in the public domain cannot be patented.
Don’t leave IP until last
Innovation teams are often isolated from a company’s patent ‘machine’. This can mean that innovation processes can move forward with little or no consideration of whether competitors can copy the resulting products. The innovation process itself is fairly well protected since what is kept in the heads of employees is hard to copy. The resulting ‘innovations’ can be somewhat easier to copy. They may not be a direct copy but they will result in customers going elsewhere to buy cheap imitations. If the IP contained is not patented then there are two major issues to consider:
- Competitors may simply work out how we have created a product and then copy it, reducing its value to us
- For high value items such as pharmaceuticals we lose the ability to licence products and hence generate revenue if we do not wish to take them to market./
Companies may then not attain expected returns because competitors can legally copy the innovation—be it a product, technology or otherwise—without incurring legal penalties.
Patents are not always necessary
It is not always necessary to protect innovation outputs with patents e.g if a product has a short shelf-life or where the company may desire to protect technology by treating it as a trade secret. However, for innovation programmes where business strategy assumes exclusivity, companies must usually seek patent protection.
Also, the absence of a function that provides patent expertise may mean that innovations are not properly audited for risks of potential patent infringement or other IP protection infringement until significant development effort and expense have been expended.