Episode 25: Is your IP future-proof? How to think like an in-house IP counsel

Lisa Desjardins (Lisa): You're listening to Canadian I.P. voices, a podcast where we talk intellectual property with a range of professionals and stakeholders across Canada and abroad. Whether you are an entrepreneur, artist, inventor or just curious, you will learn about some of the real problems and get real solutions for how trademarks, patents, copyrights and industrial designs and trade secrets work in real life.

I'm Lisa Desjardins and I'm your host.

The views and opinions expressed in this podcast are those of the individual podcasters and do not necessarily reflect the official policy or position of the Canadian Intellectual Property Office.

Big firms—really BIG firms like Bombardier, Huawei, BlackBerry, Ericsson, have something called in-house I.P. services to manage their I.P. portfolios. In here, you'll often find a group of lawyers—some of them patent and trademark agents, paralegals… It's like a well-oiled I.P. powerhouse, ready to identify and protect corporate I.P. worth billions of dollars. But, contrary to what you may believe, these powerhouses are not about cranking out as many patents as possible. Of course technology is a big component here, but as you will learn from today's guest, the way to become that I.P. powerhouse is by staying laser focused on the future and having a plan for how I.P. will get you there. I.P. strategy. I.P. culture.

But for small companies, the focus is often on the technology at hand and getting professional assistance to apply for a patent or 2—all this using very limited funds. So what lessons can small companies learn from I.P. giants? How can you learn to think like an in-house counsel?

Robert Guay, you have a law degree and an impressive track record of setting up and managing I.P. departments at a handful of multinational companies including Bombardier, BlackBerry, and currently you are the director of I.P. at Shopify.

Robert Guay (Robert): Hi, glad to be here.

Lisa: I'm so happy to have you here. I know we had a lot of interesting questions for you. First of all, thanks for coming to Canadian I.P. Voices. Can you talk a little bit about yourself and the kind of work you do at Shopify?

Robert: Yeah, absolutely. So I'm a patent lawyer by trade. This is what I do at Shopify. This is what I've always done for the past, probably 22 plus years now working as you said in a lot of different places, mostly Canadian conglomerates helping those companies grow patent portfolios. And helping them grow them in a way to meet business goals and those goals obviously can range depending on the firm from you know, protecting innovations to building innovative credibility of the company out of the marketplace, building out licensing programs, building out defensive assets that can be used in case of a patent assertion threat. So I mostly basically just try to help companies think very strategically about how they build their portfolios for what they need.

Lisa: We're going to talk about small companies now because they're often not in the same situation with respect to resources to manage their I.P. So can you explain to someone managing a small firm what the main differences are between hiring, say, a third party to apply for I.P. versus having someone in-house to help you with this?

Robert: Yeah, I think there's a lot of companies throughout their journey that have to think about this at some point in time. So when it comes to the nuts and bolts of the I.P. services themselves, I don't know that there's much of a difference in terms of how that the scope or the nature of the services that are rendered. You know you could have somebody drafting a patent application and they could do that in an in-house setting or they could do that externally at a law firm I'm saying it's true also for preparing and filing a trademark application. So when it comes to the mechanics when it comes to execution there isn't really much of a difference. There is a difference though in how those services can be rendered and how much value-add those services can have. This isn't really so much in relation to who performs the services and the quality of those underlying services. It has to do more with how related or relevant they could be the business objectives, so in other words, when you work in house, you're a lot closer to the business. You're a lot closer to its objectives, the goals that it's pursuing. You're a lot closer to the product. You're a lot closer to leadership team and so all of that proximity really gives you the added advantage of being able to tailor how those I.P. services are rendered, therefore potentially increasing the value out of those services.

Lisa: As an entrepreneur, it's hard to stay close to both business objectives and I.P. if you don't quite understand exactly I.P. and how you're going to use it long term. You're currently setting up or have set up your 7th corporate I.P. department and so you've probably seen hundreds of patent applications go in all sorts of directions, from dead on arrival to big commercial success. As an I.P. counsel, what lessons would you share with someone who's considering to file for their first patent application?

Robert: Yeah, that's kind of an interesting question because. You're right, I've seen a lot of patent applications, and I've seen applications developed by small firms, applications developed by large players and stuff like that. And what you know, there's one thing that I've seen several times being done, and that is folks just basically going through the motions without really thinking much about the underlying, like how the patent application is prepared and the underlying value of the patent application or the resulting patent.

And what often ends up is if there is a disconnect between who is seeking patent protection and who's performing that service. You might end up with a patent application that doesn't fulfill the goal of whoever is looking for that protection. And by that I mean somebody could approach an I.P. provider, saying, hey, you know, like I've created this new service or this new product and I just heard that it might be a good idea to get some protection here. Can you help?

And then depending on who's offering the service, they may actually give you something, they'll give you a patent application. They'll file it for you, they might get you a patent as well, and then years later the owner of the patent might look back and say, oh, you know, like I've got this killer patent on my product and now I want to use it. And then often realizing that they can't really use it, and they can't really enforce it just because of the way that it was drafted because of the way that it was, you know, the claims were written because of that disconnect between whoever drafted the application and the business goals.

I've seen that disconnect happens so often that what I often recommend firms, you know, somebody who's doing this for the first time is to try to really avoid the possibility of that disconnect. And that's a hard thing to do, but a good way to think about it is: if you're going to go and consult and get somebody to help you out; an I.P. expert to help you out in this field, make sure that you don't describe a product in your patent application, that you don't describe it in terms of an offering. You describe it in terms of a  technical solution to a technical problem. Because really, the purpose of a patent is to get protection for something that is patentable and often obviously like the criteria for patenting, things are different from jurisdiction to jurisdiction, but we used to think about it usually like a common theme is that has to be technical, it has to be a solution that fixes a technical problem.

So for folks that are new to this world, really have to have this frame of mind as opposed to thinking, "I've got a new product, I have a new service and I just want to patent on it." Because if you do that, that's probably a recipe for failure. And the way to mitigate as I said the disconnect, between what you have in mind in terms of how you've come up with, what the patent ultimately will cover, is to really think about it more in terms of a technical solution to a technical problem.

Lisa: You're saying the mindset. I wanted to ask you, could you share what do you think is the most important mindset then for entrepreneurs to maintain in the process when it comes to I.P. protection?

Robert: Yeah, so thinking more broadly about this issue, technical solution to a technical problem, I know it may sound like you'd end up narrowing the scope of what it is that you developed in terms of product or service, but really you don't. What that analysis or that mindset will get you is, it'll get you to think more in terms of how the patent will be used in the future. And so by focusing on that technical solution to technical problem, it will divorce what it is that you're trying to patent, from the product or service that you develop.

The reason why that is important is a patent becomes valuable only years after it's been filed and a few years after it's been granted. Usually nobody worries about the patent, and the technology will not have caught on to things that have been patented, until like 8 or 9 or 10 years into the tenure of the patent. So that means whatever you patent now is likely not going to make it to market. Broadly speaking like meaning others will not be looking to maybe do similar things until eight or nine or ten years later down the line. And that means that things can change over time, right? So one of the very important things to think about for entrepreneurs, when it comes to I.P. protection, patent protection specifically is to try to future-proof what it is that they come up with.

And the best way to do that is you divorce your new product and your new service from what it is that you're going to try to patent to the extent you can. Meaning, if you hone in on the problems that you solved with your solution, if you think about it that way, it's going to allow you to think about, well, what else could you change? What else could you tweak? And still solve the same problem and still not be too far removed from what it is that you've come up with in terms of a technical solution, but you'll end up with a much stronger patent now because you will have future-proofed your patent for whatever might hit the market 8 to 10 years down the line and it's important to do that because in my experience I've rarely ever seen a patent for an idea where the patent has become valuable later on and where the ideas that were targeted where the commercial implementations were targeted by that patent later on, were the same as the original idea. Ideas always evolve.

So in a patent is only as valuable as the uptake in the market later on, meaning a lot of people think that the value of patent is proportional or correlated to how exclusive your solution might be out there, but at least in the high tech and the software space, the reverse is true, meaning you want your idea become ubiquitous in the marketplace. You want your idea to be copied by others, because when that happens that's what gives a lot of value to your patent, and that's how professionals or experts a value patent.

So they'll look to see. Is it ubiquitous in the marketplace? Does it cover things that a lot of players do, and if it does, then we'll value it accordingly, the value typically goes up. So the whole idea is to try to future-proof your patents as much as possible and the best way to do that is really to think about your new products and services more in terms of technical solutions to technical problems so that you can really maximize the breadth and the scope of the protection that you'll get with your patent.

Lisa: I really like the idea of the future-proofing of your application and what you're going to do in the future. It brings me to another topic that we often try to explain and it's about I.P. strategy. To some people it's a document, to some people, that's more of a mindset. You've been working with so many big companies. In your words, what does I.P. strategy mean to you? Is it a document? Is it a mindset? What have you seen in terms of I.P. strategy? Someone creating an I.P. strategy, what are they creating?

Robert: Yeah, oh gosh, I've heard that word so many times before and everybody got their own take on it, right? But to me what it means to have an I.P. strategy, it simply means to have a plan, right? How do you plan to use I.P.? How do you plan to leverage those I.P. assets, right? It could be it could have many forms it could. It could be in the form of a document, could be in the form of a of an approach or a mindset, as you said. All of these. Incarnations would work. The important thing about having a plan is really to have a set of guideposts to guide you in how you're going to grow those I.P. assets, and the reason why that's important is because seeking I.P. protection isn't cheap. And it isn't for the short term.

It is usually a long term play that is not cheap, and so that's why having a plan is important. And also, that's why communicating that plan to the business is important. So a lot of people will bark at costs. They'll say look yeah, it's all well and good that you're telling me that I need to protect so many inventions year or I need to do XY and Z and file these trademark applications. That's but at the end of the day you want to be able to communicate why you need to get that protection and how getting that protection will help support the business objectives. You need to be able to articulate that clearly, and the way to do that is by having what a lot of people call an I.P. strategy, or in more layman terms, having an I.P. plan.

Lisa: You mentioned guideposts and the importance of articulating why you're doing certain things. If you're someone who hasn't been thinking too much about an I.P. strategy, what do you think are some of the key factors that companies, small or large, should keep in mind as they decide on an I.P. strategy?

Robert: Well, you really have to look at the business objectives. You have to go back to square one and say well where is the business at in terms of its growth? What products or services does it offer? What are the key short term business objectives that it has? Where are the key long term business objectives that it has? And then, once you've outlined all of these things, then you have a starting point to start thinking about, "okay, well, how does I.P. play into it?" One of the threads that I like to look at is company growth stages. So for example, are you a or just a startup that has only 2 employees with a killer idea, but without any investments and you're just looking for capital? I mean, that would be like one stage of a company that would be extremely relevant and how much money you decide to spend on I.P. protection versus like a more established player that isn't necessarily looking for investment but is looking to fend off competitors. And potentially mitigate patent assertion threats, right? So these are 2 very different growth stages that you really have to consider and take into account as you lay out an I.P. strategy. Another stage that also is different is are you looking to eventually go public with your company, right? A lot of investors are looking for signs that you are taking measures to obtain or maintain a certain level of exclusivity in your product offering or in your service offering. And so they will look to signs of the existence of an I.P. plan, for example, or an I.P. strategy, or the development of an I.P. portfolio in order to support that initial public offering, right? So, that's an example of looking at the business setting, you know, the growth stage of a company looking at the business imperatives there to basically fuel or to basically determine what elements of an I.P. strategy you will need at that particular moment in time that will best serve the business objectives.

Lisa: Thank you so much Robert for coming to Canadian I.P. Voices and sharing those very important insights with entrepreneurs and probably other I.P. counsels out there. Thank you so much.

Robert: You're welcome!

Lisa: You've listened to Canadian I.P. Voices where we talk I.P. In this episode we heard from Robert Guay, director of I.P. at Shopify. Robert has built and managed in-house I.P. departments within many multinational companies and says I.P. strategy isn't all about getting patents for the specific product or service; it's about future-proofing your I.P. by protecting the technical solution to a technical problem. This mindset can help you get I.P. protection that will serve your business well in the future. Robert also talked about I.P. strategy and this should reflect your firm's current growth stage. If you're curious to learn more about different kinds of I.P. strategy, look for the link in the description of this podcast.