Unlocking the Gate to Open Innovation




January 7, 2016

Unlocking the Gate to Open Innovation


Seeking ideas from outsiders can be tricky. A simple legal structure can pave the way to open innovation -- and a burst of creativity.

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Many of the innovations fueling economies in our information age did not require new technologies or scientific feats, but rather depended on arranging and manipulating in a novel manner existing technologies, as well as devising new business methods or applying established ones with an ingenious twist.

These sorts of innovations are in most cases extremely efficient. They are less expensive to benefit from, and the duration between awareness and implementation is relatively short.

Coming up with such innovative ideas and detailed product descriptions relating to the Internet and mobile market does not require any special training or education, and most of the information that is needed for a potential innovator is available in plain sight for all of us.

That doesn’t mean it’s easy to achieve such innovations and creative insights. But It does suggest that the chances of being enlightened with the same innovative concept are similar for both a bright Google employee and a bright and curious Indian or Chinese teenager or an adult with a smartphone.

Of course, when comparing the chances of being enlightened with a true and disruptive innovation on a specific issue, the group of 60,000 Googlers has slim chances of getting there ahead of the billions of teenagers and adults in the world.

You would think that applying open innovation, which gets 3.3 million search results on Google, would direct companies to take advantage of those billions of potential innovators out there. That’s definitely not the case, and I’m guessing that for most companies open innovation involves mainly following and cooperating with external companies and start-ups as well as with relevant academic institutions and individuals.

In fact, most companies discourage potential innovators in the general population from sending anything valuable to them. Have a look at Apple’s policy. The company covers all (contradicting) bases, starting with:

“Apple or any of its employees do not accept or consider unsolicited ideas”

And ending with:

“your submissions will automatically become the property of Apple, without any compensation to you. Apple may use or redistribute the submissions and their contents for any purpose and in any way”

Google appears to be more polite and logical, and so does Amazon, but the bottom line is the same: There are no incentives and only risks for potential innovators from the public to send anything valuable to such companies.

There are certainly legal risks in soliciting detailed concepts and product designs from the public, so I don’t blame companies for being cautious. I do think they can be creative in seriously mitigating those risks.

What can be done?

To start with, companies need to realize they are far less innovative in many areas of their business than they could be. And even hiring thousands of additional geniuses and cooperating with established third parties can’t do much to improve their improbable odds against a competitor that solicits innovation from the general population.

One way to go forward would be to engage trusted third-party professionals (maybe a new company consisting of former executives and employees) that would act as an “innovation firewall” between the public and the company itself (the “trustee”). The rules should be simple. All detailed product description and innovation concepts would be transferred only to the trustee, which would have an obligation of confidentiality both to the claimed innovator and to the company (regarding information the trustee possesses or receives from the company itself).

The trustee would have the hard job of screening the input received from the public, finding the innovation jewels and then verifying as best he can that such innovation does not already exist within the company. Once a true innovation is found, the trustee would make the direct connection between the innovator and the company. A standard nondisclosure agreement would then be executed.

The public should also be educated on how to present concepts, replacing the innovation-suffocating legal text existing in the links provided above.


About the Author

Itai Leshem is a legal practitioner in IT, telecommunications, media, Internet and intellectual property law and regulatory law. Leshem represents a significant number of Israeli and foreign companies. He is also an expert in start-ups.

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