In case there was any doubt, this New York Times article of July 22, 2008 shows that Open Innovation is “hot”. And it is not just consumer products companies that have jumped on the bandwagon: companies such as HP, IBM and Microsoft have reportedly embraced the Open Innovation model. But, did you also know that, if your company is not careful, you could end up sharing patent rights to any inventions resulting from your Open Innovation collaborations?
If you are going to play in the Open Innovation game, you must also understand how to prevent collaborators outside your company from owning the fruits of your company’s innovations. This is a very easy issue to address on the front end of the Open Innnovation process and should be standard procedure for any innovation professional. However, as detailed by Greg Daines in his Ideanomics blog, intellectual property strategy is not a subject that is covered in business school. As a result, simple issues such as this will often be overlooked by innovation professionals because they are not recognized, often with disasterous business results. With this blog post, I hope to provide innovation professionals with a bit of learning that could prevent them from making a huge mistake in their Open Innovation efforts.
When your company collaborates with someone who is not an employee, that person jointly owns any patent resulting from that collaboration. Moreover, that person can use the jointly patented product or technology without payment to the company. Perhaps more significantly, your collaborator can freely license the jointly patented product or technology to a competitor of the company.