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IP-Based Open Innovation in Multiple Industries
MPI Spring SymposiumMay 25, 2006
Michael Kayat
[email protected] 460 0366
© 2006 Michael Kayat UTEK-EKMS, Inc.
Innovate Or Else…..
World is becoming “flat” and populated with knowledge-based economies
Markets in most industries are becoming fragmented and segmented
Difference between products and services is “blurring”
Competitive strategy: low cost to differentiation
Innovation = invention + commercialization
“It’s not the strongest of the species who survive, but theones most responsive to change” – Charles Darwin
© 2006 Michael Kayat UTEK-EKMS, Inc.
Innovation is Hard
Only 1 in 10 enterprises experience acceptable innovation success rates but still hit/miss
Occasional spectacular innovation successes
50% of US enterprise R&D budgets “wasted” in failed innovations – about $100 billion per year
After years of cost-cutting to maintain profits, many enterprises have reduced “R” productivity
Increased competition puts pressure on “invent it ourselves” innovation to sustain revenue growth
Innovation needs “fuel” and “guidance”
© 2006 Michael Kayat UTEK-EKMS, Inc.
Innovation Value Gaps
Industry Average R&D Intensity
Innovation Value Gap Variations
Bio-pharma 17% 50 - 200%
Chemicals 3% 100 - 500%
Industrial Machinery
3% 100 - 700%
Medical Devices
8% 85 - 500%
Innovation Value Gap = Differences between amounts of R&D invested and market values created
R&D Intensity = Percentage of annual revenues invested in R&D Source: CPA
© 2006 Michael Kayat UTEK-EKMS, Inc.
Innovation and Strategic IP ManagementUtilizing effective Intellectual Property (IP) management can provide innovation with:
– Fuel– Direction– Coordination
IP assets comprise patents, trademarks, copyrights, technology know-how, designs, formulae, trade secretsIP analysis can provide quantitativeinformation on:
– Corporate strategy– Competitive analysis– New market and product opportunities
High value, high protection IP portfolio critical
© 2006 Michael Kayat UTEK-EKMS, Inc.
Product Creation Process and IP
Marketcompetitor& technologyintelligence
Product &
technicalmaintenance
ProgramManagement
Innovation & idea management
Technology resource development
Product/marketstrategy
Productplanning
Technologystrategy
Technologyplanning
Intellectual property properly leveraged throughout the Product Creation Process (PCP) can be used to attain competitive advantage.
Project Selection
IP
IP
IP
IP
IP
IP
IP
© 2006 Michael Kayat UTEK-EKMS, Inc.
Open Innovation Model
After Professor Henry Chesbrough, UC Berkeley
© 2006 Michael Kayat UTEK-EKMS, Inc.
IP Strategy for Open Innovation Cost centered Revenue centered
Value extraction Value creation
Limit competitors• Blocking patents• Picket fence patents (design freedom)• Create standards• Maintain exclusive position
Protect intangibles
• Blocking patents (avoid litigation)• In-license complementary IP
Leverage full potential of IP• Licensing (core and non-core IP)• Spin outs• Joint ventures• Strategic alliances
Establish income revenue stream• Licensing (non-core IP)
Proactive
Reactive
© 2006 Michael Kayat UTEK-EKMS, Inc.
IP ProcessIP Strategy
IP Process Improvement
IP Ideation & Invention
Concept patents
IP AnalysisPatent Mining
IP Landscape Analysis
Technology Valuation
Patent Analytics
Advanced IP Analysis Tools
IP Deal-MakingIP Commercialization
In-Licensing, Out-Licensing & Cross Licensing
Strategic Partnerships,Spin-offs, Joint Ventures,Mergers & Acquisitions
IP Portfolio Optimization
Methodology for Strategic IP Management
© 2006 Michael Kayat UTEK-EKMS, Inc.
TQM for IP Management
IP
R&D
Product Development
CorporateDevelopment
Technology Management
Business Unit
Division
DivisionIn-licensing
from Enterprise Partner(s)
Out-licensing to Enterprise
Partner(s)
In-licensing from University
or Small Company
Legal
© 2006 Michael Kayat UTEK-EKMS, Inc.
IP Management System
Obtain technology/IPinternally
Business strategy& tactics
-------------------------------Product/market matrix
Patenting criteria and decision process
InnovationProcess
Store Value
Extraction
Patent portfolio database
Competitiveassessment
Valuation of innovation opportunity
Value extractiondecision process
Obtain technology/IPexternally
Strategic Positioning
Assess need and sourcefor new innovation
Portfoliomaintenance
© 2006 Michael Kayat UTEK-EKMS, Inc.
Technology/Platform Portfolio MappingW
eak
Wea
kTe
nabl
eTe
nabl
eFa
vora
ble
Favo
rabl
eSt
rong
Stro
ngD
omin
ant
Dom
inan
t
BaseBase KeyKey PacingPacing
LowLow Competitive ImpactCompetitive Impact HighHigh
Low
Low
Com
petit
ive
Posi
tion
Com
petit
ive
Posi
tion
Hig
hH
igh
Current Level of Effort: 1 5 32
None Low Medium High
2
10
13
14
16
22
23
24
2526
27
1
3
4
5
6
9
12
15
182019
Add New Technologies
© 2006 Michael Kayat UTEK-EKMS, Inc.
Open Innovation in Multiple IndustriesIndustry CompaniesBio-pharma Amgen
MerckPfizer
Computers/Electronics HP LG Electronics
SonyConsumer Products Dow
Proctor & GambleUnilever
Semiconductors CiscoIntel
Philips
© 2006 Michael Kayat UTEK-EKMS, Inc.
Q&A
Michael Kayat, Ph.D.PresidentUTEK-EKMS, Inc.+1 617 460 0366 (cell)[email protected](AMEX:UTK)