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Posts Tagged ‘IP’

The Tech Start-Up’s IP Dilemma

September 4, 2016 Leave a comment
When it comes to tech entrepreneurship, a good Intellectual Property (IP) strategy will often play a critical role in the difference between unbridled success versus failure-inducing infringement lawsuits. How should technology entrepreneurs and start-ups approach the difficult task of balancing IP protection vs. commercialization considerations in the dynamic, financial and geo-political landscape of today?

In the face of recent global financial meltdowns, migrant refugee crises, global terrorism and regional upheavals (e.g. BREXIT), things may become exponentially more complicated. In terms of IP, the key question for many high-growth start-ups is how to negotiate the daunting landscape of protocol, jurisdiction and regulatory compliance requirements for each new market that they penetrate.

3 key factors, in my opinion, need to be taken into consideration when attempting to address these particular challenges as follows:

Pay to play – The digital world has ushered in a shift from transactions to a more interaction based economy. According to Constellation Research Principal, Andy Mulholland, three distinct types of time-zone based interactions can be recognized in this new environment. They comprise of: reflex interactions (e.g. autonomous machine to machine interactions); service based interactions (i.e. multiple, coordinated services interacting to deliver value to customers / subscribers / end-users); and finally, cognitive interactions (delivering enhanced value as part of a ‘smart’ system and ecosystem).

Changing of the Guard – IP is a moveable feast, and sooner or later any proponent of “free-to-use” IP soon become vigorous advocates of IP protection once they start producing their own. Nations that were once net consumers of IP, with scant regard for anti-piracy measures, will often become rabid defenders of international IP laws when they start producing more IP than they consume. The same applies to start-ups who initially think nothing of appropriating other people’s IP in other to create or enhance their own products / services, but then go on to spend oodles of funding money with top IP lawyers to protect or defend their IP as they mature.

Caring, sharing, gig economy – The last point is very much about the real cost of freedom and flexibility. The so called “Gig economy”, which offers short term roles for hordes of contingent workers (aka ‘micro entrepreneurs’), has been popularised by the likes of Uber, Airbnb and Deliveroo, because they promise a greater degree of freedom and flexibility than traditional employer / employees models. The new gig economy players typically provide a platform for exchanging goods and services, but sometimes this can verge on the traditional ’employee’  domain, (e.g. wearing uniforms with the platform providers logo), instead of an independent provider. This blurring of lines could be interpreted by many as an attempt by platform operators to have their cake and eat it, and this has contributed to the recent spate of high profile law suites and demonstrations by irate contingent workers. Such disruptive business practices bring to mind the threat posed to traditional content industries by file sharing platforms such as: Naptster, Grokster, Pirate Bay and Megaupload, who all got sued to smithereens. The sad thing is that such repercussions, if unchecked, can serve to dampen the innovative vigour of said ‘gig economy’ platform operators. A middle ground must be found where it will be possible to explore the frontiers of the new gig economy without trampling over the rights of its participants. The promise of freedom and flexibility alone may not be worth the pixels through which it is displayed.

In conclusion, when it comes to startup entrepreneurship in today’s world, it takes a certain level of awareness to negotiate the myriad challenges facing new innovative / disruptive entrants to most markets. One of the key criteria for success, (in addition to having the right ideas, resources, team and opportunity / timing), is the presence of a good strategy for intellectual property and how it can be employed to the benefit of the organisation. It is no accident that California USA, with its high concentration of IP based industries, is the 6th largest economy in the world, therefore it goes without saying how important it is for startups to identify and protect any IP assets, right from the start.

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Disclosure: The above post is derived from a soon-to-be-published article in the next edition of BCS Digital Leaders newsletter. Also the topic of start ups and IP will be the focus of the next BCS Entrepreneurs speed mentoring event which I’ll be chairing in the next few weeks.
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An IP System Fit for the 21st Century

Last week, I attended a breakfast meeting at the House of Commons to discuss and reflect on practical issues around implementing recommendations of the Hargreaves Report, as well as ways in which the IP system can be evolved to better enable the benefits from 21st Century business and technology opportunities.

UK House of Parliament

UK House of Parliament

This event, organised by the Industry and Parliament Trust, featured brief talks by Professor Ian Hargreaves (author of the IP Review report & recommendations – download it here), Ben White (Head of IP at the British Library), and Nico Perez (co-founder of startup, MixCloud), plus Q&A style discussions with the attending group of politicians and business people from relevant industries. Some key observations and comments are:

  • London has the largest cluster of IP related start-ups, as well as the biggest hub for VCs, in Europe
  • There has been a lot of international interest in the Hargreaves report and recommendations (the good professor regularly gets calls from interested observers across the globe). Also, the review findings and recommendations had good traction with the UK government.
  • Digital economy versus creative economy; are they one and the same (i.e. is there and/or should there really be a difference)?
  • The larger creative industry players (e.g. publishers), and their lobbyists, are not in full agreement with the review findings and / or recommendations, and remain firmly resistant to change
  • According to one attendee, the interests of creative stakeholder (e.g. content creators) were not well represented or served by the review findings and recommendations
  • Collecting societies act like de facto monopolies, which can make life difficult for some more innovative start-ups
  • Broadcast TV players are trying to innovate and catch up with what consumers are already doing in their homes, but the current IP system is not sufficiently geared towards enabling such initiatives.

Note: Further information, comments and observations can be found in the IPT blog post about this event.

The upshot of the above points, in my opinion, is that a new / evolved IP system must really be geared towards dual targets, i.e. to help simplify and facilitate the use and reuse of IP works, especially in the digital realm. Such a focus would undoubtedly go a long way towards addressing the legion of non-technological challenges faced by most innovators, entrepreneurs and investors in the creative digital industries. For example, according to an article (see: The Library of Utopia), published by MIT technology review, “the major problem with constructing a universal library nowadays has little to do with technology. It’s the thorny tangle of legal, commercial, and political issues that surrounds the publishing business.”

These are pretty much the same issues to be found in similar ventures within publishing and other major creative industries, e.g.: Music (think cross border licensing for the much vaunted Celestial Jukebox), or a global film and image library (e.g. a mash-up of Hulu, Netflix, Corbis and Getty Images). In all cases, technology is not the stumbling block, because the bigger challenges lie with any combination of: business strategy, commercial models, legal / political / cultural mindsets, encountered along the way.

Having said that, it can be argued that such hurdles are not sustainable, for various reasons, not least of which is that individuals (or customers, casual pirates, consumers, freetards etc. – take your pick) are already way ahead of the curve in terms of digital content / technology, and will often use it exactly as they see fit.

This means that established incumbent players in the creative industries are forever playing a reactive / catch-up game, instead of pursuing or encouraging discovery of the next big thing. As a result, most disruptive propositions will invariably have a high impact on established business models, especially if and when they harness the natural instincts of individual users. An interesting example could be the recently launched Google Drive, complete with built-in OCR capability (which will enable users to digitize and search scanned content). Could this ultimately lead to a user generated version of Google Books?

To conclude, an IP system worthy of the 21st century is an urgent necessity, but there is also pressing need to keep in mind the big picture, which is that the Internet is a global enabler / platform, therefore any new IP system must likewise be global in scope. The UK, with its wealth of creative talent, plus such efforts as the IP review and recommendations, may be in a unique position to provide some leadership on the best way forward for IP in this 21st century.