March 2014

Trade Secret Practices Changing Due To First-To-File Legislation

Organic Innovation, Open Innovation, Intellectual Property, & CXO Corporate Metrics Practices, July 23, 2013, described primary research that GGI conducted in 2013. The results were announced March 13, 2014 in a Business Wire press release. Here we address a piece of what we found on the subject of Trade Secrets.

The emerging OI and IP marketplaces, corporate enablers to monetize soft assets, continued to grow. Scouting and innovation intermediary firms achieved 15% penetration. Joint innovation ventures are reported by more than a third of respondents.  These collective data indicate the ability to monetize IP is growing.

If registered IP is increasing in value, and the ability to monetize it can have no other outcome, it stands to reason that unregistered IP is also increasing in value.  And, the value of a company’s Trade Secrets increases at a rate that is related to the growth rate in the ability to monetize IP, and the growth rate in value.  Now there is a deep subject, and we will certainly leave that for another day.

So what happens in the next few years?  GGI research shows that over a third indicate they have formalized processes for monetizing IP already.  Three quarters indicate that the financial impact of IP is positive, none indicated negative.   Seventy percent indicate that IP will be more or much important in the next five years. It perhaps is too casual a way to describe the landscape ahead, but it appears that a critical mass of companies currently exists and the next third of industry is about to get on board.  This is reinforced by our findings on the emerging marketplace of Open Innovation.

It is no wonder why thirty percent are changing their Trade Secret practices, now that First-To-File has become law in the United States.  Why not focus on the seventy-percent that are not changing, the clear majority?  In our global world, foreign companies have been practicing First-To-File patent processes for years – and now do in the U.S. too.  Implied by our findings is that there is a great deal of change for companies that do not have global roots or have not yet achieved a certain size, small and medium businesses.  Certainly some of the big corporations replied they are tightening as well, wishing to protect their appreciating asset.

Trade Secret Practices Changing Due To First-To-File Legislation? [Machine Design – April 10, 2014], summarizes selected GGI research findings in the area of Trade Secrets; and offers nine steps that companies may take to further protect and secure their Trade Secret assets.  [The article was posted March 18.  The URL for the magazine issue will be available April 10.]

Corporate Innovation Practices Align With Business Results

NEEDHAM, Mass. — (BUSINESS WIRE) — March 13, 2014 — Goldense Group, Inc. [GGI] announced the completion of its sixth primary research initiative on the strategies, processes, practices, and metrics used in North American R&D and Product Development Innovation. This study focused on R&D Operations, Organic Innovation, Open Innovation [OI], Intellectual Property [IP], and the Top 100 Productivity & Performance Metrics used by corporations.

Two hundred companies from the US, Canada, and Mexico participated in equal proportion to the relative R&D Spending of these three countries, representative of North America. The response rate was 6.5%. A typical respondent company had US$ 4-5B in revenues.

While the relative corporate activity in Basic Research, Applied Research, Advanced Development, and Product Development remained largely constant for the past five years, the infrastructure in these areas experienced significant growth. Growth will continue. Two-thirds indicated innovation will be more important in the next five years than in the past five. Half indicated the same for OI.

The emerging OI and IP marketplaces, corporate enablers to monetize soft assets, continued to grow. Scouting and innovation intermediary firms achieved 15% penetration. Joint innovation ventures are reported by more than a third of respondents. Corporate abilities to track revenues and profits lag abilities to track costs, this is especially true for OI.

Seventy percent indicate that IP will be more or much important in the next five years. Three quarters indicate that the financial impact of IP is positive, none indicated negative. Over a third indicated they have formalized processes for monetizing IP. Thirty percent are changing their Trade Secret practices, now that First-To-File has become law in the United States.

After fifteen years of little change in corporate metrics for R&D and Product Development, there has been a sea change in the use of metrics to focus on business results in the past five years. The “R&D sand box” is almost gone. Twenty-three of the Top 25 metrics now measure pipeline attributes, productivity, and results.

These findings are excerpts from two available reports on GGI’s 2014 Product Development Metrics Survey. Findings are also located in Driving Product Development™ and Tangible Innovation!™, and will be discussed at the 17th R&D-Product Development Metrics Summit being held April 15-17, 2014 in Norwood, Massachusetts.