Manny Schecter (IBM): "Open innovation requires adjusting IP strategy"

Manny Schecter, Chief Patent Counsel of IBM, explains to Leaders League the innovation culture of Big Blue and the changes of its strategy of intellectual property management over the last 10 years.

Manny Schecter, Chief Patent Counsel of IBM, explains to Leaders League the innovation culture of Big Blue and the changes of its strategy of intellectual property management over the last 10 years.

Leaders League. IBM has again broken US patent records in 2014. Why are you filing more patents than any other company?
Manny Schecter. Patents promote innovation and IBM is an innovation-based company. IBM invests billions per year in research and development. We have a very strong culture of innovation as well as highly effective processes for capturing inventions for patent protection, all of which has been honed throughout our 100+ year company history. We have a long and successful history of leveraging IBM patents to protect our freedom of action and generate income. Moreover, we are convinced that intangible assets are increasingly important with respect to company value and long-term success, and thus require protection. In short, innovation is vital to our company and patents play an important role in protecting and leveraging that innovation.

Leaders League. How do you perceive the relationship between open innovation and patent protection?
M. S. Innovation is important whether or not one collaborates with others in an open innovation context. Open innovation is particularly helpful in marshalling vast resources from diverse sources, spreading risk and cost, and sharing results. Open innovation can speed the generation of new technological platforms upon which proprietary innovations can be developed. Patents are agnostic as to the innovation model used to develop the inventions they protect. Accordingly, patents are used to protect proprietary innovations (for example) by enabling inventors to exclude or license competitors, and patents are used to stimulate open innovation (for example) by making patents available on reasonable and/or royalty-free terms to implementers of a standard, as the collaborating participants envisioned.

Leaders League. What are the main changes of the strategy of intellectual property management of IBM over the last 10 years?
M. S. About 10 years ago we adjusted our IP strategy to better support open innovation. That support included several pledges not to assert patents relating to open source software, health and education standards, and environmental concerns. We also became more cognizant of patent assertion entities – first because of their occasional assertions of patents against us and second because of the detrimental effect that a minority of bad actors were having on the integrity of the patent system. We have strongly advocated for a balanced patent system that both rewards innovators and spurs economic growth, and we have defended that balance from self-interested actors seeking to tilt the system too far in favor of, or against, patentees. Finally, we have continuously adjusted the technology and geography mix of our patent portfolio so as to track strategic changes in our business and new growth opportunities. All along the years, our goals remain the same: continue to protect IBM’s innovation, and support IBM’s business in general terms.

Leaders League. What are your criteria when choosing outside legal counsel and service providers?
M. S. We first consider the basics, such as conflicts of interest. We also consider work quality, responsiveness, ethics, and diversity. Skill set match (to our needs), flexibility to work in our fast moving environment, and culture are also key considerations.

Read more business insight in our next International Report of Innovation and Technology. Publication in April 2015.

Jeanne Yizhen YIN

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