(Editorial note: This is a repost from this blog over 2 years ago, but the content is more relevant than ever. On January 20, 2010, I am participating in a Yet2.com webinar with Ben DuPont and Jason Lye where we will be sharing our thoughts about marketing technology to “non-traditional” technology buyers, many of whom come to the table because they are adopting Open Innovation into their product and technology development processes. I thought this “classic” post would be a good overview for anyone of my viewpoint for those who find my blog as a result of this event. For regular readers, well, I hope you enjoy this too. I will post a link to the recorded webinar when it is available. )
Open Innovation is unquestionably becoming a “hot” area of focus for U.S. companies, especially in the current economic climate in which businesses are more than ever focused on smarter ways of doing business. And, why wouldn’t Open Innovation be an intriguing business model when companies can fill their product and technology pipelines for significantly lower cost and with more variability of ideas than typically is possible from their own R&D infrastructures? As a result, more and more business leaders are today viewing Open Innovation as a necessary direction in which to move their company’s innovation efforts.
A fundamental premise of Open Innovation is that good ideas can come from anywhere, even when a company operates in a very specialized core business. Moreover, innovations that come from outside of one’s core business, such as in packaging or transportation, are better left to those who specialize in those areas. Perhaps more controversial is the assertion that by relying only on the ideas generated from within, an organization’s core business innovations can become self-limiting because the pool of knowledge and idea generation may become somewhat myopic. When properly deployed, Open Innovation methodologies not only can be the source of ideas generated outside of the organization, but can also serve as a catalyst for the existing R&D infrastructure to become more creative. In its best forms, Open Innovation becomes a source of new products and technology, as well as a means to spur the creativity of one’s own people.In seeking to capitalize on the promise of Open Innovation for modern business, many companies are developing internal expertise or engaging consultants to assist them in meeting their goals. These efforts are no doubt critical for Open Innovation success. However, I believe that a missing piece in today’s existing Open Innovation methodologies is actionable knowledge regarding how patent information and analysis can be used to improve and accelerate the quest for promising ideas developed outside of one’s organization. This belief emanates from my substantive client experience, as well as discussions with innovation professionals from many organizations.
In the aggregate, most innovation professionals conceptually understand that patent information should serve as a source of Open Innovation subject matter. Nonetheless, few of these professionals fully appreciate how patents can be used to improve the efficiencies and successes of innovation processes. Moreover, few patent professionals possess the business competency to translate their specialized patent legal knowledge into a form deployable in the innovation context. As such, a disconnect currently exists between patent information and Open Innovation methodologies. Failure of organizations to fully capitalize on the information available in patents necessarily results in substantial reductions in the payoff obtainable from the adoption of Open Innovation methodologies by a company.
Why do I believe patents are a critical piece to Open Innovation methodology? Put simply–patents can serve as a vertiable “shopping list” for a company seeking to identify innovations available for adoption from outside the organization. By its very nature, a patent sets forth the fundamental basis of the subject matter that the patentee wishes to exclusively own. If the patentee developed a product or technology and later decided not to introduce it into the market, then that subject matter could be essentially market ready (or nearly market ready) for a significantly less cost than to develop a similar technology from scratch within one’s own organization. Continue reading