Our second article on IP management (first article here) in open innovation explains some of the common practices and agreements that companies use in order to protect their IP rights and ensure confidentiality.
The parties engaged in open innovation might decide to sign a consortium agreement, establish joint ownership or to engage in knowledge transfer via licensing and other contractual mechanisms.
As explained by the European IPR Helpdesk, consortium agreements are usually signed when large companies, SMEs and research and technology organisations (RTOs) decide to openly innovate together. The agreement identifies the IP owned by each party before the project, allocates IP ownership generated during the project and defines the IP access rights necessary for project execution.
On the other hand, joint ownership is usually put into practice in joint ventures and it identifies the following essential IP issues regarding jointly owned assets:
Licensing can be carried out in two ways: licensing-in and licensing-out. In the first scenario, a company is granted access to a third party’s knowledge, and in the second case, a company puts its own knowledge at the third party's disposal.
Another form of knowledge transfer is assignment of IP. The assignment occurs when a company that owns the IP (the assignor) transfers the ownership of an intellectual property right to another party (the assignee).
In any type of knowledge transfer, it is essential to evaluate the economic value of the IP rights owned by partners in order to conclude a fair agreement. In order to do this, partners might conduct an IP audit process which helps them set the IP development strategy, evaluate risks of their partners’ IP assets and reduce the risks of infringement.
European Startup Network
As more and more companies openly collaborate and innovate with third parties, the question of proper intellectual property (IP) management arises. The companies have to rethink their innovation models and strike a balance between what knowledge they share with partners and stakeholders and what they can gain from collaborations with them.
If a company manages poorly its relations with external stakeholders, it can be at risk of distributing confidential information related to its intellectual property and losing profits from innovation.
According to the European IPR Helpdesk, open innovation can be carried out in various forms, such as:
In order to protect their assets and maximize future gains from open innovation, companies should implement internal IP protection measures in the early stages of collaboration. This can be accomplished by:
When collaborating, parties often disclose know-how and technologies that have not been protected yet. To avoid potential misuse of such information, it is highly recommended to conclude a non-disclosure agreement (NDA) that establishes the conditions of collaboration and sharing of sensitive information between partners.
European Startup Network
The EU funded project UpskillingLab 4.0 kicked off in Sofia in December 2019. The main project goal is to provide skill improvement opportunities to companies’ staff (managers and employees) in order to connect international start-ups, scaleups, and established companies operating in specific verticals with focus on modern technologies and innovation (Industry 4.0).
The consortium delivering the project is composed of:
● Bulgarian Industrial Association (BIA), leader of the consortium
● Knowledge, Innovation and Strategies Management Club (KISMC), from Bulgaria
● Chamber of Craft & Small Business of Slovenia (CCSBS), from Slovenia
● University of Deusto, from Spain
● European Startup Network (ESN), from Belgium
● Inqubator Leeuwarden (INQ), from the Netherlands
The two Bulgarian partners Bulgarian Industrial Association (BIA), represented by Lora Lyubenova, and Knowledge, Innovation and Strategies Management Club (KISMC), represented by Milena Koleva, in the video below share the achievements of the project to date and what could be expected in next project period.
Despite the disruptions and challenges caused by COVID-19, the project is being very well implemented due to the experience of all international partners and the actions taken to mitigate any risks associated with the pandemic and other external factors.
Watch the video now for updates on the Upskilling Lab 4.0 project:
For more information about the project, please read here.
START UPS (NGO and economic ones) TO FIGHT PANDEMIA
Nearly 21.000 participants gathered at the EUvsVirus Hackathon, an initiative led by the European Innovation Council during the 24-26 weekend of April to fight the effects of COVID-19. “Over 2,150 solutions were submitted in areas including health and life (898), business continuity (381), remote working and education (270), social and political cohesion (452), digital finance (75) and other challenges (83). Germany (389), Italy (320) and Spain (315) submitted the highest number of solutions, which range from a ‘modular micro factory’ to a ‘natural language processing system for medical reporting.”
Several mentors from University of Deusto had the opportunity to take part in the initiative.
MATCHING START UPS AND COMPANIES
Later on, a Matchaton was being hold during a 22-25 extended weekend of May to join start ups and investors.
One of the tools that we have had the opportunity to know during the EUvsVirus Matchathon is the Co-Innovation Builder Toolbox designed under the Corship-Corporate edupreneurship.
This is the first prototype of the tool that offers a model of relationship to startups and existing companies to foster open innovation, simple and effective canvas:
Both sides clarify expectations and goals, define roles, contributions and resources and in doing so they can easily define the agreement under 5 variables: goals, format, outcomes, risks and KPIs.
Corship also offers a free MOOC to train users of the canvas.
Collaboration between start ups and companies could be more effective for the whole ecosystem (quicker and cheaper) if done properly.
Upskilling lab 4.0 is developing the main skills that both sides should exert for a successful collaboration.
Industry 4.0 enabled by the Internet of Things (IoT) allows for the integration of people, assets and applications within a company. It also contributes to the integration of a company with its wider ecosystem, which probably consists of customers, subcontractors, suppliers and R&D partners.
Major trends that encourage Industry 4.0 are shorter product and service lifecycles and therefore the need to speed up time to market. Thus, the need for innovation will be increased. It might bring organisations to their limit in terms of innovation capacity and capabilities internally. Open Innovation can be an approach to master the innovation game and to stay competitive in fast-changing markets.
The term Open Innovation was coined by Henry Chesbrough, a professor at UC Berkeley`s Haas Business School. In his definition it is “the use of purposive inflows and outflows of knowledge to accelerate internal innovation and to expand the markets for external use of innovation”. This is based on the acknowledgement that knowledge and experience within an organisation is limited and that internal regulations/processes might even cause further limitations to evoke innovation.
The most prominent challenge that comes along with Open Innovation is how to handle the intellectual property (IP). The collaboration with third parties in innovation could create conflicts about IP ownership and raise the question of which part of the innovation will be owned by whom.
Thus, it is a good idea to have a contractual regulation between the organisations for the processes of open and connected innovation fostered by Industry 4.0. There could be also a framework agreement between the organisations, that will set the rules under which joint innovation will take place.
Since 2008 the Slovenian Enterprise Fund has been offering financial support for newly established innovative enterprises with a high growth potential. The focus has been at enterprises at the beginning of their business journey and are developing innovative products for the wider market as well as processes and services with a high added value.
These incentives provide financial support to young enterprises in the first development phase, which covers the setting up of an enterprise, the creation of a minimum viable product (MVP) based on own development, the creation of an entrepreneurial team, a direct transfer of knowledge and knowledge institutions into the business environment.
This is the most extensive group of newly established young innovative enterprises that show potential for rapid growth and need the most favourable financial sources at the beginning of their business journey. The call for proposal is composed of two phases: pre-selection and complete project proposal. The successful startup can gain up to 54k euro in grants funding.
In addition to financial suppport, the startups can benefit also from free consulting services, provided by eminent mentors and coaches. This measure »Startup Incentives« is the first part of the comprehensive Support Programme for young enterprises in Slovenia.
Chamber of Craft & Small Businesses of Slovenia
Several domain leaders are looking to collaborate with start-up companies that are more open to novel approaches and flexible in their approach towards manufacturing. These start-ups usually focus on creating new technologies that can enhance the capabilities of existing organizations by leaps and bounds.
Another major benefit of partnering with start-ups is that they are smaller in size and it is easier for them to adapt to the changing business ecosystem. Finally, services offered by start-ups that are just beginning to gain scale in the market are usually priced low and are easily affordable. Thus, organizations can save huge amounts by opting for start-ups instead of established companies for their collaborations.
Moreover, start-ups usually come armed with a variety of new-age entrepreneurs that are skilled in several cutting-edge disciplines. The exchange of novel thoughts and ideas between individuals who have worked on and with leading technologies is always a huge plus for evolving companies.
Things to Keep in Mind While Collaborating for Innovation
Keeping in mind that digitization will be at the heart of these collaborations, here are some key factors that can lead to a successful collaboration between organizations:
Currently, rapidly evolving trends and multitudes of challenges exist in the manufacturing industry. Along with widespread technological uptake, companies will have to go through complete mindset shifts in order to survive in the 4th industrial revolution. Organizations carrying out business alongside each other will be required to become one unit, to share digital technologies and infrastructures and remain competitive in this ever-evolving business landscape.
Different from the traditional R&D business model that keeps all the information internal, companies who embrace Open Innovation let the door open and ask for external ideas to solve their current business challenges more efficiently.
According to the article Could Open Innovation save the world? (Fitzgerald, 2020), there are few aspects that Open Innovation can bring benefits to the company:
However, not merely more companies are participating in the Open Innovation programme because the payoff is not always clear and also it is difficult for companies to identify which business solutions can create value for all the stakeholders. The author in the article suggested that companies should focus on the overall ROI created by open innovation rather than the individual return of each solution.
Responding to the title of the article, can Open Innovation really save the world” our answer might be yes, but the problem lies in how to make it happen.
In the Upskilling Lab 4.0 project, we will develop a robust model of collaboration between startups and corporates, the skill development network to make more Open Innovation and collaboration happen.
European Startup Network
The World Economic Forum is providing a manual to help startups and corporates work together.
The White Paper illustrates the Benefits for each side, going through Risks they should be aware of, and it finishes with the Challenges they both groups are facing when working together. The main conclusion is that they have to develop a common understanding of collaboration.
It offers a good deal of FAQ that each group has to clarify before entering the collaboration and through its life cycle (Startups: Budget, Economic Buyer, Amplifier, Metrics, Target for the Corporate; and Corporates: What, Why, Which and Who).
Moreover, the document offers several Collaboration and organization models for corporates when working together with startups. Few snapshots from the White Paper are available below, but for more extensive understanding we recommend a review of the paper here.
1. Direct Sourcing
2. Internal Innovation Unit
3. Corporate Incubator Model
4. External Subsidiary
5. Entrepreneurial Co-creation Model
University of Deusto
The European Data Incubator (EDI), a Horizon 2020 project, backed by the European Commission, is entering its final round.
The University of Deusto, project partner in the Upskilling Lab project, co-funded under the Erasmus+ programme, leads a consortium of experts in Big Data and Incubation of startups. “Only 2 out of the top 20 companies changing lives and making money from Big Data are European”. So this virtual incubator is linking startups with data providers (hopefully, some of them will become customers) to solve a challenge that the latter place on the table.
EDI will help those startups and data providers jump this hurdle providing:
(1) a free infrastructure with open source tools
(2) training on the most known off-the-self solutions
(3) support and business services to develop their business idea
(4) equity-free funding.
The European Data Incubator is a three-phase incubation programme (more details in the picture below):
The project is entering now Evolve phase of the second call and in March the new call for startups and data providers will be opened again.
So far, 70 startups have profited from the different services and grants provided by EDI. And, the aim of this project is to help 120 startups by the end of the third round.
University of Deusto