IP and the war for talent Wednesday, July 2, 2008 5:00am — Strategic Management of IP, Global IP Strategy
Deepak Somaya, recently sent me a note about an article he co-wrote with Ian Williamson for the Sloan Management Review.
It's well worth a read - here's a link: Rethinking the 'War for Talent'
In essence (and I hope they forgive me for my overly brief summary), Deepak and Ian argue that a firm's strategy for dealing with exiting employees should depend on the strategic importance of the knowledge (and role) they hold and where they are departing to. So, a less strategic employee going to a collaborator should be given more freedom to leave, whereas the senior executive running your firm's make-or-break project should be seriously dissuaded from joining a competitor.
I think these are great points, and the experience of the law firms they studied must be right more generally - they do better when an employee goes to work for a client or a potential client, than if they go to a competitor.
Interestingly, Zappos seems to take this to another level by offering employees a $1000 bonus if they will quit after the initial training period is over. That way they get to keep only the most committed employees. I guess a difference here is that Zappos is focusing on getting the right people, whereas Deepak and Ian are focusing in this study on when they exit. (I asked Deepak about this and he commented that they decided not to include hiring practices so as not to detract from their main point.)
From all accounts, the 'war for talent' is only going to intensify as the boomers retire, or at least slowly decrease their commitments at work. So, what are the IP implications?
Firstly, I'm sorry to say, that if you think you can keep your intellectual property locked up, away from most employees, so as to minimise risk that it will move with them, then you're sadly mistaken. I'd even go so far as to say that I really don't think that litigating to enforce non-competes is a good idea at all (as advocated in certain circumstances by Deepak and Ian). At best, you create a bad publicity incident, a very disgruntled ex-employee and a hollow, shortlived victory, at worst, well it can be a lot worse than that. So be strategic about your IP and the way you handle it. Create an IP-conscious culture within the firm, have appropriate employment agreements in place, provide strong incentives for employees to create and then disclose new IP developments as soon as possible, protect them properly and so on.
Secondly, to focus only on exiting employees, I think is looking at the wrong end of the equation. (And certainly Deepak and Ian are not advocating such a narrow focus at all.) Instead, focus on hiring the right people, waiting forever to get them, and as Goldman Sachs does, going to extraordinary lengths to attract and retain them. Once you have the right people, you know what? They will do the right thing by you if you do the same. They will. The only trick is to find the right people.
For those interested in Deepak's work - Jo Sinclair and I interviewed him for IP ThinkTank back in October 2007, he is a friend and reader of this blog and, Assistant Professor of Strategy at the Robert H. Smith School of Business at the University of Maryland.
This article was first published in CPA's IP Review, issue 22.
When Google launched its AdWords advertising programme in 2003, keyword-linked advertising seemed to herald the future of online advertising. If only it didn’t infringe brand owners’ IP Rights in the process, says Duncan Bucknell
It all seemed to make perfect sense. Companies looking to ensure their details appeared at the top of a web search results page simply had to purchase ‘pay-per-click’ advertising banners that linked to particular industry-specific search terms. So, for example, if a consumer was looking to find ‘trademark counsel’, the law firm that had sponsored those keywords with a search engine provider, such as Google or Yahoo!, would appear next to the actual search results. It sounds no different from selecting the appropriate keyword terms as website metatags for your own website. That is, after all, how search engines work.
And yet the potential for IP infringement has proved immense, as businesses looking to cash in on their competitors’ goodwill have taken to purchasing trademark-protected terms (for example, the brand or product names of their competitors) as part of their sponsored keyword triggers in order to divert some of the potential customers of their competitors to their own websites. Worse still, say brand owners, Google and its peers have chosen to turn a blind eye.
Trademark owners have started to protest, filing lawsuits claiming trademark infringement, unfair competition, and trademark dilution. To date, Google, AOL’s Netscape search engine, Yahoo! and Excite have all been sued for keyword infringement, with mixed results. Most jurisdictions are clear that trademark infringement exists if a company uses another company’s trademarks as metatags on its own website, but they are divided as to whether the use of trademarks in keyword-linked advertising is trademark infringement or simply a fair means of competition.
France has already ruled that in ‘some’ circumstances it does count as infringement, but UK courts have found the opposite to be true: in their minds the sponsored ads are clearly labelled as such, so the potential for consumer confusion (necessary to prove the common law tort of passing off) has been adequately reduced.
Google, for its part, argues that one of the critical steps in effective advertising is placing the ad where interested consumers may see it. It is not to blame, it suggests, if companies nominate the brand names of their competitors as search terms: ‘As a provider of space for advertisements, we cannot arbitrate trademark disputes between advertisers and trademark owners... We encourage trademark owners to resolve their disputes directly with our advertisers, particularly because the advertisers may have similar advertisements on other sites.’
It has good reason to fight its corner: Google receives the majority of its revenue through pay-per-click keyword advertising. Prior to 2004, it denied advertisers the ability to link their ads to the trademarks of others; however, it modified its ad-linking policy in January 2007 to allow advertisers to bid on the chance to have their ads associated with any keyword, even if those keywords were trademarks owned by a competitor. That is not to say that Google is allowing unbridled use of trademarks, as the company still ‘reviews trademark complaints that relate to the content of the keyword ads, just not the keywords purchased to trigger the ads’. But that is small comfort to brand owners.
An online scorecard Faced with such legal uncertainty, it’s no surprise that brand owners are unsure of how best to face this new challenge. Few have time to check search results for their brand names on all search engines in all jurisdictions in order to check the sponsored ads that result.
This is a perfect example of the issues that led IP strategist Duncan Bucknell to invent his online ‘global IP scorecards’ – a website, e-mail and RSS feed which allow anyone to view (and contribute) the latest developments in a range of global IP issues, including the infringing use of Internet keywords.
‘The scorecards (found at
duncanbucknell.com/scorecards), are simple to navigate and work on a straightforward process,’ says Duncan. ‘But it is also a joint effort and relies on input from the global IP community. The scorecards are set up like a wiki (a piece of software that allows users to collaboratively create, edit, link and organise content for reference), so anyone can add information to them or even suggest new scorecards. The scorecards are organised under three areas important to the global IP landscape: key issues (such as paid keywords), products and companies. The idea is to build the knowledge base collaboratively.’
The global nature of the Internet lends itself perfectly to this kind of initiative. ‘The online keyword scorecard tackles one of the most controversial topics in IP: the invisible use of another’s brand to attract hits on an unrelated site. The controversy often centres around the fact that use of the brand, as a paid keyword, which is not readily visible to people, is not deemed by some courts to be “use in commerce”, or is not “use as a trademark”.’
Consumers recognise trademark-protected brand names, and react to that recognition, as a result of corporate investment in that name. With keyword ads, the computer undertakes the recognition step and presents the results to the consumer, who may assume that those results are associated with the brand. For brand owners on the receiving end of a competitor’s paid keyword strategy, Duncan argues that by gathering evidence of actual deception of customers, companies can, depending on the jurisdiction, add anti-trust and anti-competition law suits as part of their response.
Samsung, Yahoo! and Microsoft are just three of the bluechip companies whose activities are covered in scorecards on the site, which allow users to search by territory for updates on relevant IP law. And, for those wishing to update the website, each scorecard has a ‘contribute’ button, which allows the user to add relevant updates (such as new legislation or legal rulings) pertinent to that issue, product or company.
This information is obviously invaluable in that it can alert companies to issues concerning the infringement of their trademarks. It might also help to educate on how best to protect certain parts of an IP portfolio. ‘With the help of the IP community, the scorecards can help businesses large and small to track and develop strategic responses to these important issues,’ says Duncan.
