How do you behave from a legal perspective in an open innovation environment?

Companies and organisations invite one another either unilaterally or on a reciprocal basis into their innovation processes, often to complement their own R&D departments and other internal resources. The thinking is that fresh new ideas and the involvement of more players can quicken the process towards a finished product or a solution to a problem whilst at the same time costs are kept down.

The word “Open” in OI should not be misunderstood as meaning that all rights produced or resulting from these processes or collaborative efforts are necessarily free for each and every participant to use. “Open” in this context should rather be understood as meaning that whoever initiates or owns the project, rather openly invites others to collaborate. The threadbare phrase “Look before you leap” is highly relevant when it comes to OI. It is important not to be blinded by the undeniably huge potential advantages, but to consider the risks involved in OI as well.

In the below, we provide a few tips as to what to consider from a legal perspective as a participant or initiative taker in OI.

• How is the right to and use of knowledge and expertise/ technology the parties involved are already familiar with, or bring to the project, to be regulated? This is often referred to as “background information”. How much of this information can be shared?
• Are the participants free to share the information or the ideas they contribute to an OI project – are they bound by existing rights or loyalties, e.g. already registered intellectual property rights, employment or confidentiality agreements? Is the information or idea considered a company’s trade secret?
• Is there an awareness of the other participants’ actual objective in participating – what are their aims and purposes?
• How is the situation to be dealt with if a participant delivers something that comprises the same invention as another participant has already developed or is in the process of developing, but has not yet patented or protected in some way? Publication or other disclosure may interfere with such protective measures.
• How are the intellectual property rights of something that is produced/created in or as a result of processes or collaborations in OI (often referred to in English as “foreground information”) to be protected, and who is entitled to register or claim those rights? 

It is not possible to provide general solutions to the above challenges; they are often dependent on the particular circumstances prevailing, on the aims and purposes of the OI project in question and on the participants. It is fair to say, however, that before the process begins the areas above should have been considered and, ideally, regulated. This can often be perceived by innovators and entrepreneurs as a wet legal blanket that risks jeopardising the whole project and the environment of open innovation they were seeking. Experience suggests, however, that when an innovation has been produced, it is difficult to agree as to how it should be managed. Tentatively, it is not necessary to regulate everything in detail in advance – that may risk creating problems that may in the end turn out to be illusory – but overall and “in principle” solutions should be in place. The participants deserve, on the one hand, to be aware in advance of the lay of the land and have the opportunity to plan their participation accordingly, and, on the other hand, to have such a clear map that, when an innovation or an outcome of commercial interest emerges/is created within the OI framework, they know what roads are open to them – how they should act, who should act and how ownership and potential earnings will be distributed and regulated. If this does not happen, there is a risk that potential hostage situations can be created, making it impossible to put the outcome to use and forcing inequitable solutions or disputes. 

In conclusion, totally irrespective of whether it is decided that “Open” in an OI project should mean that nothing created in the project is to be protected in terms of intellectual property rights, third party rights and one’s own right to act in the market, (referred to in English as freedom to operate) should be checked and ideally secured. This in order to avoid conflicts involving situations where the outcome/what is created in, or results from, the processes or collaborations in OI is infringing someone else’s intellectual property rights.