Assessing a supplier from an IP perspective – Part II

intellectual property rightsThe challenge dealing with IP

The challenge I see is that many Sourcing / Procurement people do not have the skills, experience, process or methodology to properly access the IP maturity and sophistication of suppliers (either hardware or software) and properly assess the supplier from an IP value and risk perspective.

They lack a broad definition of intellectual property. They do not know how to determine the maturity of the supplier from an IP perspective. They are unaware of how to judge the IP environment of the supplier. They cannot plot where the supplier sits of the ‘level of IP control’ axis. They do not understand the different ways in which IP adds value.

Simply put, they do not know what questions to ask, and how to interpret any answers received back.

I am being unfair. A few do, but most do not. Yes it is important to consider obvious issues like the implications of 3rd party intellectual property rights but this is only one of many IP issues which should be considered when dealing with suppliers. I would even go so far as to to say that many IP professionals lack the skills. process and methodology to conduct such supplier assessments from an IP perspective.

What should be assessed from an IP perspective

The ideal of any supplier assessment is to identify deficiencies with the supplier’s processes and procedures before they impact. Of course, the purpose is also to identify opportunities. These two equally important objectives apply just as much to the IP portion of any supplier assessment.

Effective questions are questions that are powerful and thought provoking. Effective questions are open-ended and not leading questions. Behind effective questioning is also the ability to listen to the answer and suspend judgment. This means being intent on understanding what the person who is talking is really saying. What is behind their words?

Although it may vary greatly depending on the exact nature of the product or service being supplied and how critical this supplied item is for the company, I would propose that the IP portion of the supplier assessment explore the following issues …

1.    …    What is the supplier’s IP awareness level?

2.    …    What is the supplier’s definition of IP and good IP?

3.    …    Where is the supplier on the IP Maturity Ladder?

4.    …    Where is the supplier in their eco-system from an IP perspective?

5.    …    What is the supplier’s comfort level on the ‘Level of IP Control’ axis?

6.    …    Describe the IP Portfolio of the supplier

7.    …    How is IP adding value to the supplier?

8.    …    What are the IP risks facing the supplier and describe IP risk mitigation activities?

9.    …    What IP resources are available to the supplier (internal & external) and how are they deployed?

10.  …    Describe IP Governance by the supplier

These ten questions listed here are high-level abstract questions as such and much more detailed check-lists exist that describe individual components of each of these ten. I should also state that the first question listed, namely IP Awareness and the last question listed, namely IP governance, are like bookends keeping all of the others properly in place.

The purpose of this IP portion of the supplier assessment is to determine the overall sophistication of the supplier from an IP perspective, and to identify IP value and risk.

Author: Donal O’Connel

Managing Director, Chawton Innovation Services Limited

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