John Squire, vice president, marketing, ENOVIA, Dassault Systèmes

The role of PLM in promoting open innovation

“Intellectual Property”

With the changing global business landscape and a number of high profile lawsuits, the term has taken on a much higher profile in recent years. Though once relegated to the world of patent law, intellectual property (IP) protection is becoming an increasingly important part of manufacturing, especially in regards to global collaboration.

The fact that IP continues to be misused, stolen and compromised is indicative not of ignorance to the value of IP, but a lack of resources or a reluctance by many companies to implement a strong management program. 

Truth & Consequences

Beyond making good business sense, IP protection can also have major ramifications for a company’s long term viability. Innovation is a critical element of business leadership and companies that have a strong track record of innovation tend to have a higher market capitalization. Fear of losing information should never curtail a team’s desire to pursue the next great idea. 

In fact, companies often recognized as industry innovators and leaders, including Apple, 3M and Procter & Gamble, all use a form of IP management to protect innovation and product development. It’s also worth noting that none of this innovation happens in a vacuum, leading companies leverage employees as well as external suppliers and partners to get the job done.

An AMR Research study of 130 global manufacturers identified the 15 most cited risks to the global supply chain, including IP infringement (29 percent), supplier failure (38 percent) and security breaches (25 percent) (“Supply Chain Risk, 2008-2009,” May 2009).

If companies plan to outsource product development to foreign nations they must enforce security at a granular level- exposing only required information- and bring suppliers together in a secure online environment.

For many manufacturers faced with an expanding network of international suppliers and partners, IP protection provides a crucial element in creating peace of mind, enabling companies to take advantage of expertise that exists beyond their own four walls or specific geographic borders. Businesses need a way to share only selective information with untrustworthy parties.

As importantly, accessibility and maintenance of all relevant IP allows for infinite re-use, helping companies create new products and reach new markets with less effort. After all, it’s much easier to create an enhanced model of an MP3 player that it is to create the player itself. It is important that patents and specifically funded R&D used in original products are tracked through their derivative products.

Another major challenge for companies in protecting and managing intellectual property is that they’re unable to predict the scenario in which certain IP will be used. After all, it’s not always possible to know ahead of time what types of derivative products might result from a certain base design or formula. 

As a result, a lack of proper IP controls opens up a world of risk – either from less scrupulous companies or less regulated markets. In some cases, such as ITAR (International Trade in Arms Regulation) improper access to IP can result on stiff fines, even if there was no knowledge of the infringement by the offending company.

All of this seems like an overwhelming amount of work, but it doesn’t have to be – in fact, product lifecycle management provides an ideal platform for creating specific business processes and standard practices to combine product development and IP protection. 

What does PLM have to do with IP management technology? PLM provides a framework for IP protection creating a central clearinghouse for the company’s core data, including designs, engineering specifications, customer requirements and meeting notes. This framework allows authorized parties to easily access, use and reuse IP without having to worry about theft or loss.

By creating a secure environment for the entire supply chain, this approach can act as a catalyst for harnessing innovation and new product development – capitalizing on all ideas wherever they are generated.

IP Protection 101: Three Mission Critical Steps

There are three critical steps for companies looking to protect their IP:

Step 1: Gather all IP data into a single, central clearinghouse. It is important to note that IP originates from multiple heterogeneous systems, so it cannot physically reside in one place, but PLM provides a single, logical view of the information and allows tracking, even though the data continues to reside on its original system. Once all the IP has been gathered companies can run numerous searches to index, organize the data and make a definitive list of what’s available. Companies can then leverage the IP that’s suitable for reuse in future products.

Step 2: Implement a stringent, multi-level sign-on and authentication process for users based upon multiple situations, including user location. Users with access to all or any of the IP should be specified by role, by their department or sub-group and by where they’re physically located (for instance, even the president of the company may be restricted from accessing confidential IP while in Cuba). 

Furthermore, companies must determine which suppliers and partners should be given conditional access to specific aspects of IP/product data depending on their role within the development cycle. For instance, if a foreign supplier of brake parts needs to see detailed specs on the wheel base as well as the car’s transmission and chassis design to determine and validate brake sizing, it should only be allowed access to the engine and chassis components that affect brake assembly performance.

Step 3: Create a collaborative online environment using PLM so that employees and suppliers can not only access and retrieve IP, but also work on related projects securely and in real time. The difference between communication and collaboration is a common, shared workspace. By providing an online environment in which project members across the world can work together and solve problems early on in the design cycle, companies can fix potential development issues before they become prohibitively expensive.

PLM provides companies with the flexibility to tailor specific functionality for a secure central, logical repository- a central clearinghouse- for intellectual property to be stored and tracked (with each edit and design iteration saved), as well as making IP unprintable and impossible to reproduce. This way, no matter how many new products are developed based on existing designs, information on the original design and patent-holder is always on hand for purposes of security and authentication, preserving the product’s genealogy.

The Flip Side

While IP protection and management have become almost de facto in certain industries like pharmaceuticals and defense, other sectors are lagging behind and face real danger. Not least, by not protecting IP, companies risk hefty fines.

In addition, many manufacturers, depending on the technology, are required by federal laws and regulations to keep control over their intellectual property. For instance, ITAR forbids the expert of specific types of IP. 

Additionally, the Health Insurance Portability and Accountability Act (HIPAA) as well as Security and Exchange Commission (SEC) and Sarbanes-Oxley violations can be both financial and reputational disasters.

In today’s global economy it would be naïve to disrespect other countries’ standards of business and still expect to succeed. That being said, how should companies convey sensitive information to foreign partners? Companies need a way to distribute only select information via a controlled environment; information sent to suppliers can be willingly or unwittingly exposed. The key is to provide suppliers with granular access – the ability to see only enough information to effectively do their jobs.

Keeping Things Under Wraps

Some security experts will suggest that companies use Digital Rights Management (DRM) or standard perimeter security solutions to safeguard IP. This is fine for a lab confined to four walls but not sufficient for a multinational company. Luckily, PLM can help.

Patent laws change frequently and vary between countries. PLM offers a framework that is flexible enough to automatically update and enforce access rules based on new regulations when needed while lessening restrictions when necessary.

The Best Of Both Worlds

By collaborating on an international scale, companies can invite customers and potential customers into its design and development processes – literally.

For example, gamers from all over the world can experience the features of a new joystick or console just by interacting with a 3D model of the product online, and can make recommendations for improvement on feel, usability and other features (including color or ergonomics), providing much more feedback faster than traditional test marketing methods. And, in case any of these “test subjects” might be competitors in disguise, it’s simple to limit what design details they can see.

PLM isn’t just a way to manage IP for internal use in product design and development; it’s a flexible framework that controls every aspect of a product’s lifecycle – from a team of engineers brainstorming a concept in seven different countries at once to executing millions of concurrent product orders in a specific plant.

Remember – protecting intellectual property won’t provide any benefits unless the IP remains usable. IP should be secured, maintained and re-used time and time again to streamline operations, maximize innovation and create bigger and brighter solutions.

To put it simply – capture IP, classify it, share it securely and spark a revolution of global innovation.

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