The Musings of Metis

Upon the Shoulders of Giants

The time comes in every organisation where the leader needs to step down and pass the reins to another. In Apple Inc. this event could not have had greater focus with the world’s business press headlining on the resignation of Steve Jobs as CEO.

What the event has highlighted is the importance of a company to ensure its brand and reputation are not tied up with one individual but have anthropomorphic characteristics with the company appearing as a “living, breathing thing”. The jury may be out on Apple, with the sudden drop in share value followed by a bounce back recovery. Was the recovery as a result of confidence in Tim Cook, Jobs’ successor or was it as a result of share acquisition during the dip? What is noticeable is the increase in shareprice of Apple’s competitors. Is this the time for them to gain valuable ground?

At Metis we insist organisations look at the association between the personal brand of their key people and the company’s own brand, between the individual’s know-how and how this impacts on the company’s reputation. By identifying exactly where the balance exists and identifying what drives real competitive advantage, we can help the organisation plan for continuity during transition and develop knowledge transfer to support the succession of future leaders.

Are your key people single points of contact? Will your brand competitiveness be impacted if they move on? Have you sufficient know-how transfer policies in place to mitigate the risk? What actions have you taken to ensure successful succession? What will the market make of it and what might be the impact on customers or revenues? Interested to know.

Innovation is?

The cover story of the May edition of “CNBC Business” took a critical perspective on innovation and its relevance to business. The article, contributed to by a number of high profile commentators including Chris Barez-Brown, Kjell Nordstrom and Vijay Govindarajan claims innovation is at the top of business agendas right now because everything else has been done: cost cutting, customer relationships, engagement.

But what is innovation? It is suggested few companies have a firm grasp on what innovation really is or means for their enterprise. Leaders often confuse innovation for creativity. “Innovation is not creativity” says Govindarajan, “it is commercialising creativity”.

“Creativity is messy and intense, while most executives prefer order and predictability” contributes John Hagel, co-chairman of Deloitte’s Center for the Edge based in San Jose in the heart of innovative Silicon Valley. Yet often in the tech industry, Chief Innovation Officers are appointed, put in a corner and told to innovate.

These statements support Nordstrom, economist and author of “Funky Business” claims that “innovation is a form of creative destruction” and when big companies acquire smaller, innovative firms, after a few years only a brand is left, “the innovators have either been shackled or they have moved on”.

So how can this be addressed? Nordstrom refers to Novartis as a good example and outsourcing of innovation as the answer. In return for a stake in the company, innovative collaboration is shared: whilst one party does the research the other focuses on its core strengths - the application of the innovation and exploitation of economies of scale in the marketplace.

Here at Metis we value innovation as one of the ten key areas of hidden company value, areas where IP assets are often under-exploited. Innovation, as the article suggests is not a standalone activity: it relies on each of the other areas including brand, relationships, processes and most importantly strategy. Where we see value being created is in collaborative IP development: one company licensing its IP assets to another who in turn can give the former the market traction or way through barriers to entry it cannot breach on its own.

Have you looked outward for innovation? Are there synergies to be developed in your relationships or are you committed to doing on your own?

Electrical giant Dixons calls on Metis Partners to market two of its best-known brands

Glasgow-based intellectual property (IP) asset specialist Metis Partners has been appointed by Dixons Retail plc (Dixons) to market and sell the IP assets, of two of the multinational electrical giant’s best-known and longest-established brands, Saisho and Miranda.

The sale is a coup for Metis Partners, and enhances its reputation as the destination of choice for organisations seeking to generate a return on IP assets such as brands which may have benefitted from significant investment in the past but are no longer critical to future strategy. By using Metis Partners, they can generate a significant return on these assets that would be otherwise written off.

Dixons, which spans 28 countries and employs more than 40,000 people, called on Glasgow-based Metis Partners to find buyers for its Saisho own-brand product line, including audio, TV and video products, and Miranda, the internationally recognised camera and photographic equipment brand.

The Saisho brand has created nearly £27 million in sales since it was first introduced by Dixons in 1982 as a technology range which over the past few decades has become a household name. Assets for sale include goodwill in the brand and reputation in addition to 16 trade marks providing international protection.

The Miranda brand, originally created by a Japanese company more than 50 years ago, was acquired by Dixons in 1981 and was used on SLR cameras, compact cameras, lenses and other photographic equipment. It has generated more than £29 million for Dixons across its product range. Assets in the sale include goodwill in the Miranda brand and reputation as well as 20 international trade marks.

Stephen Robertson, CEO of Metis Partners, said: “These are significant brand names which have served Dixons well over the years. They have benefited from enormous advertising and media exposure within the retailer’s campaigns and we expect there to be keen interest given the outstanding levels of consumer recognition attached to them. "We believe Saisho and Miranda will be of interest to companies suffering the brand provenance gap (lack of recognition and heritage) where companies are selling high quality tech products / services but are unable to charge a premium for them. This is often because they are not being sold under a recognisable brand - companies in this situation could buy Miranda or Saisho and “hop” onto the brand recognition and brand recall that already exists in the market for these brands.”

All offers and / or notes of interest should be directed to Nat Baldwin at Metis Partners by 4.00pm on Thursday, 26th May, 2011.

For further information, please contact Nat Baldwin at Metis Partners, Trinity House, 33 Lynedoch Street, Glasgow, G3 6AA. Tel: 0141 353 3011.

Coffee to Go?

In an interesting article in a recent Financial Times, two opposite perspectives on licensing were demonstrated.

The article related to Oracle’s patent and copyright infringement claim against Google for the inclusion of elements of the Java software (now owned by Oracle after its purchase of Sun Microsystems earlier this year) within the Google Android smartphone operating system.

It appears Java has become the victim of a sea change in licensing strategy surrounding its use. When owned by Sun, Java was “promoted” as the enabler for internet applications, a tool set where developers could rapidly build solutions for an ever widening, cross platform user base. As a consequence, it is unlikely for you not to have Java somewhere on your systems if you use a PC, mobile phone or netbook. “Freely” licensed use of Java established its position as the tool of preference and core to internet business and in return Sun gained kudos.

Now, under the ownership of Oracle, Java has become embroiled in the battle for smart phone supremacy. With sales of Android-based smartphones overtaking Apple’s iPhone in the last quarter, and the inclusion of Java code in the operating system. The FT article suggests Oracle see a threat to their existing Java licence revenues whereby it would lose the power to “charge a royalty on new handsets”. As a consequence, the Java strategy has moved from collaborative to protective, with multiple copyright and patent infringement claims being raised in San Francisco.

While the outcome is yet unknown, there remains a risk that Google, if forced to pay for the use of Java, could start to charge for Android, challenging Google’s Android business model and new handset providers may look for cheaper alternatives or open up the opportunity for Apple to regain the initiative or another player (Microsoft?) to enter the arena.

As the article states: “at the time it bought Sun, Oracle executives said they would tread carefully in how they exercised their Java rights, since a heavy-handed approach could undermine the software’s standing as a de facto industry standard”, but has the temptation of new revenues as a result of the growth of mobile apps been too great?

The bottom line is this: when you establish a patent portfolio, you must seriously consider how you intend to utilise it. Do you intend to actively pursue each infringement or do you view a collaborative approach to be more attractive, sharing profit through a well thought out licencing strategy?

Is Java now both a headache as well as an opportunity?

If Apple do it, why can't you?

With all the press that Apple has received recently with the iPad and last week the new iPhone 4, it was interesting to read the review of the new iPhone's features by Kyle Baxter of Tightwind.net.

In it, Baxter highlights the new hi-res screen, the camera and – as ever – the overall design. But technology aside, his most significant comment is not the adding of more features but:

“they [Apple] aren’t attempting to compete with Android phones feature-by-feature. Instead, they are trying to continually redefine exactly what a smartphone is, and thus force their competitors to compete on Apple’s terms. They’re trying to make everyone else respond to them, rather than the other way around.”

Metis Partners always stress the importance of “competing on your own terms” as a key strategic objective and by identifying and exploiting your companies intangible assets - brand and reputation, market intelligence, know-how, IP and culture being among the ten areas Metis consider - you can immediately take the upper hand and make competitors respond to you, rather than you to them.

So if Apple with its wealth and position of strength does it, why aren’t you? What hidden assets do you have that can be used as a “weapon” to compete? Where do you have the pistol to beat your competitors bow and arrow?

Intellectual Assets for Innovation

In an interview with Jackie Hutter, Chief IP Strategist and Founder of The Hutter Group, Braden Kelley, editor of Blogging Innovation has set out an interesting perspective on the role of IP lawyers and their influence on Innovation. The full article can be read here, Intellectual Assets for Innovation, but here is our summary of the blog and our thoughts.

1: Jackie Hutter, who calls herself “a recovering patent attorney”, suggests an organisation’s legal team can be a major impediment to successful implementation of open innovation and “traditional” IP lawyers often see their primary roles in minimising risk to their clients, a perspective that can result in nascent open innovation programmes being shut down at an early stage.

To a certain level we can align to this perspective but to give IP lawyers their due, they will only act on the information presented and are not necessarily informed of the fuller business objectives. That is where a greater understanding of the company’s IP portfolio, including intangible assets beyond IPR, needs to be established and where these assets are to be exploited to meet new market opportunities, create competitive barriers to entry and support innovation, need to be fully documented and understood. We accept that, when considering Innovation, risk should be assessed – but in context : all innovative opportunities are inherently risky and hence when evaluating these in comparison to other business ventures, the “risk threshold” should be raised accordingly.

2: Hutter comments, “many business professionals believe that IP exists as a corporate asset to be harvested without any groundwork” and for IP to exist in measurable form, the organisation must identify, capture and protect those aspects of the business that serve as its competitive advantage.

We also agree that a company needs a defined IP strategy which must be aligned to “supporting and enhancing its forward-facing business strategy”. IP is one of a number of classifications of intellectual assets that can be assessed and aligned to a company’s business model (we analyse and rate the value in twelve areas: Brand and Reputation, Strategy and Market Intelligence, Unique Business Structures, Customer Management, Organisational Knowledge, Management and Key People, Key Business Processes, Partners and Suppliers, Staff, culture and CSR, Know-how and of course IPR, and R&D and Innovation itself).

Aligned to #1 above, these classifications are best considered in a business context under the ownership of the business unit Director/VP. By pulling these assessments together into a holistic business focus, they can be presented to the IP Lawyer to formalise any contractual or legislative requirements thereby having all of the team playing to their strengths.

3: Hutter concludes by stating (from her US perspective), “IP lawyers are scientists with and law degree and probably only 25% or so have real business experience. This means that the business reasons for IP lawyers’ efforts is of the lost in view of the technical and legal focus most place on the patenting process.”

We cannot comment on the validity of this statement nor would want to but it does suggest an underlying fact that multiple perspectives must be taken when assessing the impact of IA and IP in an organisation and that its value is wholly contextual. This means IP management must be at the core of an organisations existence and not left to the lawyer, the engineer or the developer to decide its value and application. There is an argument for the “external eye” to guide exploitation, without prejudice, ensuring all avenues are considered.