With the exponential growth of game-changing technology, it is
easy for an incumbent industry player to be caught flat-footed.
Suddenly, the business model has evolved dramatically and the
incumbent finds themselves playing innovation catch-up. The usual
response is to become a 'fast follower'. This seems like a
viable strategy until the incumbent finds out that the new
innovators have laid a minefield of patents in their way. In some
cases, the incumbent may either be completely blocked or be faced
with paying an exorbitant royalty to stay in business. How can an
incumbent level the playing field?
To win in the high stakes world of rapid technology advancement,
you need to have bargaining chips. The good news is that you may
have more chips than you realize, such as:
Market access can be a good bargaining chip,
at least in the short term, if the new innovator is also a new
Having access to the next best competitive
alternative to the new technology may also improve your
negotiating position. This next best competitive alternative may
either be proprietary or licensable from a third party.
Another way to change the balance of market power is to
secure valuable complementary intellectual property
rights that the new innovator will want to cross-license
to augment their own technology.
Some questions to consider as you assemble your complementary
technology portfolio are:
Have you done an audit of your existing intellectual
property portfolio to see if there are valuable assets you
can cross-license with the new innovator?
Are there valuable market white spaces
relevant to the new technology where no one is pursuing
intellectual property protection yet? Do these white spaces line up
with your existing innovation programs? Can you obtain intellectual
property protection in these white spaces?
Are there ancillary technologies, like test
methods, research protocols or equipment upgrades for which you can
obtain intellectual property rights?
Are there portfolios of valuable patents that you can
acquire or license from third parties that can be
traded with the new innovator?
The new innovators tend to be highly intellectual property savvy
and will likely be upping their game to sustain their market
advantage at the same time as you are playing catch up. You need
act swiftly and invest in a robust intellectual property strategy
to get ahead of the game.
A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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