Collaborative business innovation and legal advice.

May 24, 2023

This time in our #lecturarecomendada section we want to comment on the article by Henry Chesbrough professor at the University of Berkeley, called "Open Innovation. Innovating successfully in the 21st century". On this occasion we would like to highlight the author's conception of open innovation and express our views on the necessary integration of legal counsel in the management of this type of innovation. Chesbrough defines it as the:

The process of combining internal and external ideas within platforms, architectures and systems. Open innovation processes make use of business models to define the requirements of these architectures and systems. These business models access internal and external ideas to create value, while defining internal mechanisms to retain part of that value.


In other words, the management of open innovation processes in the business world implies the collaborative interrelation of companies with different external actors that allow them to maximize and quickly access the development of technological trends or systemic or human processes with greater added value. The collaborative approach is a scenario whose result allows companies to raise their competitiveness levels in their respective relevant markets.

Against this backdrop, a crucial question arises: What happens to intellectual property in this new context? Ownership and safeguarding innovation have been fundamental pillars for companies. However, we are witnessing a change in the way intellectual property is used and valued. Companies are adopting more flexible approaches to securing access to technology through collaborations, licensing, open source, etc.

In this scenario, the role of legal counsel becomes crucial. Their involvement from the beginning of the innovation process ensures a comprehensive legal perspective and early identification of potential obstacles and risks. Close collaboration between the commercial and legal areas allows for more informed decision-making and the search for constructive solutions.

This modality requires the support of legal advisors in the creation and adaptation of policies, agreements or other types of instruments that allow the protection of intellectual property and facilitate the collaboration of those involved. From this perspective, we can affirm that the legal advisor becomes the counterpart for the evolution and protection of the elements that will represent this business competitiveness.

An excellent example of this is open (non-free) software, as Chesbrough rightly points out:

...Linux is organized like this. Companies like Google, which make extensive use of Linux, have developed several extensions to the code base that they have kept private and do not share with the rest of the Linux community. Open software allows companies to work from open or shared code by investing in proprietary extensions. The two factions of open software agree on the value of a common heritage from which programmers can extract useful reference designs, source code, coding tools and software testing. But they disagree when it comes time to go to market....

...The differences between "free" and "open" do not become apparent until the initial phase of a new product is over and the innovation begins to gain traction in the market. At this point, they make way for companies that go to market to commercialize these innovations, create business models for profit, and need capital investment to generate growth. The true social impact of an innovation is not evident until it has been commercialized and produced on a large scale in the market. Although Linux was created by Linus Torvalds and a small community of volunteers, today it is supported by companies like IBM, which have built business models around Linux and driven its enterprise use. In short, open innovation advocates believe that a legal regime and business models can and should be in place to activate the open process...


From this perspective, open collaborative systems, but not free as Chesbrough has argued, allow the incorporation of nuances that support the companies that are supporting these efforts, therefore, they intrinsically have the need for legal counsel in order to protect and elucidate the effects in terms of intellectual property.

In summary, it is exciting to see how the management of open innovation processes is enabling companies to take full advantage of interrelationships, solutions, and ideas from a variety of external sources. It is also exciting to see the role that legal counsel are playing in ensuring that collaborations are effective and that the intellectual property rights of the companies involved, as well as those of other stakeholders, are protected.

The management of open innovation is a new intellectual property challenge, which legal counsel are facing in order to lay the foundations for cross-industry collaboration and the protection of intangible assets. Without a doubt, we are facing an exciting era in which collaboration and flexibility are becoming the pillars of business innovation.

We also leave you for consultation the article by Professor Henry Chesbrough, we believe it is an interesting and refreshing read:

Let us support and protect you, from a legal perspective. Let's keep innovating together!

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