CENSIS white paper: Intellectual Property in Business

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Intellectual Property in Business: IP basics, IP management, IP strategy Business IP Canvas - Merging IP with your business model (continued) It is worth remembering also that IP strategy requires an entrepreneurial spirit to kick in and seeks space for creativity and novelty. It should not be forgotten that IP forms only one part of your overall business strategy. Nestle has obtained a competitive advantage achieving a great growth in the midst of recession, between 2009 and 2012. This success is not only due to technology and patents, because they have had them for more than 20 years. Despite the fact of the first failure, Nespresso has created a competitive advantage that mixes product, marketing, segmentation, manufacturing and distribution, making it impossible of very difficult to copy. 94 ‘Business IP Canvas’ (see Appendix 1) The IP-related adaptation of Osterwalder’s canvas, the ‘Business IP Canvas’, includes various questions under each of the key blocks of the Business Model Canvas. The number of questions might appear overwhelming; therefore it is recommended to start with two blocks: value proposition and market segments (customer segments in the Business Model Canvas). These may also be the most challenging blocks as they require extensive information gathering and analysis. I have created a separate table to help you define your IP assets based on your VP (see Appendix 2). The starting point of this analysis is the definition of your VPs, i.e., the value that you create for your customer. As in the heading, the first column relates to the ‘job to be done’: what problems you need to solve, and which needs you must satisfy. The second step is to name products and/or services that ‘do the job’. You should specify which product(s) or service(s) are to be assigned to a particular VP. In the third step, you should list the technical components (tools) that make it possible to ‘do the job’. This step requires you to look into the technology aspects, and this can become complex if you choose to be very specific. However, this will help you work on other blocks of the canvas. The fourth column covers the IP protection behind identified technical components. This could be patents, trade secrets, copyrights or open-source licences. The fifth column asks about the ownership and the exploitation rights of the IP indicated in the previous column. It is extremely important to have clarity about this matter as you approach the commercialisation phase. Value proposition Defining your value proposition (VP) is the focal point of the business model canvas. VP is equally important when it comes to identifying and understanding your IP-related potential. As suggested by Osterwalder et al., try to rank your VPs in order of importance. 95 This will support you in decision-making in relation to the design of your IP portfolio. Through doing this ranking, you can gain valuable information on the importance of IP right(s) assigned to a specific feature of your VP. 94 Patricia Ramos Quirante, ‘The Nespresso competitive advantage’ (Cases in Strategic Management, November 2014) accessed 2 December 2022. 95 Alexander Osterwalder, et al, Value Proposition Design: How to Create Products and Services Customers Want (John Wiley & Sons, Incorporated, 2014) 32. 50
Intellectual Property in Business: IP basics, IP management, IP strategy Business IP Canvas - Merging IP with your business model (continued) Market segments (see Appendix 2) In the ‘Business IP Canvas’, the ‘customer segment’ block is renamed as ‘market segments’, moving the focus away from the customers and users your company aims to serve and reach. This section asks for a wide range of information about IP practices common in the target market. Your knowledge and understanding of the IP activities of your direct and indirect competitors, potential licensees and the general acceptance of IP in the specific market are other key elements in developing an IP strategy. For example, in the biotech market, IP rights are highly recognised and respected. In contrast to that is the coffee industry where patents do exist (see Nestle’s patents for the Nespresso machine and caps), but the industry is not particularly bothered with IP litigation despite a number of unauthorised copies of IP-protected products. And yet, as it is reported some companies choose to expand their IP portfolios for strategic and not enforcement purposes. 96 When it comes to learning about the IP practices of your competitors, it’s not so much about doing the same thing as about understanding how they play their game and how their IP-related activities correspond with their business model and strategy. The better you know the target market, the clearer perspective you will have when it comes to IP strategy. Other blocks of the Business IP Canvas (see Appendix 1) The remaining canvas blocks ask more diverse questions relating to IP matters. The questions are intended to cover as many business activities as possible and to indicate IP issues that, if unsolved or neglected, could lead to bigger issues affecting your commercialisation plans. Key partners: You build partnerships to gain resources or reduce risk. You should record IP information from this block, firstly, to track the (co-) users of your IP and, secondly, to have clarity about any third-party IP implemented in your solution. Key resources: This block covers your company’s IP assets. The entry should be a list of all identified IP rights relevant for your solution (owned by your company and/or from third parties). If you are already recording your IP rights in a more formalised way – for example, in an IP register – only indicate the location of the IP register. Key activities: This point covers other critical IPrelated tasks that are not covered under other canvas blocks, such as applying for new IP rights, acquiring IP rights from third parties or reviewing your obligations resulting from R&D projects. Customer relationships: To maintain strong customer relationships you may decide to involve your customers in technology/product development, just as in co-creation. This query focuses on IP aspects of such customer engagement, be it in B2C or B2B relationships. Channels: Distribution channels create another IP challenge. You may sign distribution agreements including IP licensing or utilise online content generated by third parties. It is important to check the ownership of the content and the scope of exploitation rights. The questions under this section guide you in how to cover these various aspects. Cost structure: IP management (with the diverse tasks it involves) incurs costs. You should consider these costs in your cost structure and pricing policy. Equally important is to determine your budget for applying and maintaining IP rights. It is advisable to include costs relating to measures for trade secret protection. Revenue streams: Technology licensing is often named as one of the revenue streams which you should consider as your business model. When you license your technology, you license your IP rights that cover a specific solution. You could license a complete solution or selected modules – this depends on the market response. 96 Jenn Chen, ‘Intellectual Property In Coffee: A Global Game Of Clones’ (Sprudge, 10 October 2018) accessed 2 December 2022. 51
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CENSIS white paper: Intellectual Property in Business

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