Are you reinventing the wheel? Collaboration as a way to superior returns

Re-inventing the wheel is economically wasteful, as costs shared are surely lower than costs borne alone.  However, the phenomenon of reinventing the wheel is commonplace today.  Competitors within a given industry may work on some collaborative projects, particularly with CSIRO and tertiary institutions, but not so much with their competitors.  Collaboration with niche developers, many of which are SMEs, happens to some degree but still insufficiently.

Collaboration just about always raises issues of ownership and arrangements to navigate this can be complicated, though less so with proper advice.  Such advice is most effective where it is sought at the beginning of a collaboration as problems with documentation are tricky to resolve later.  On the other hand, this should not be a “no go” to collaborations particularly in industry sectors.

We would rather focus on the benefits of a successful collaboration in terms of financial returns.  The Sector Competitiveness Plan for Australia’s Industry Growth Centre for Mining Equipment and Technology Suppliers (METS) recently had this to say:

“For innovative METS companies, retaining their IP is the key to growing their business and becoming more robust and long-term suppliers in both domestic and international markets. Some of the (larger: author’s insertion) miners now recognise that the benefits to their operations from collaboration far outweigh the financial returns from IP ownership.”

This is a really significant finding revealing that larger companies, here in the mining sector, benefit from collaborations with innovative METS companies, typically SMEs, to the extent that IP ownership is much less important.  Obviously, the larger company will still need to have assurance about freedom to operate though may wish to have the option to sub-licence to affiliates in some cases.  This requires an appropriate agreement.

Collaborations are, in principle, cost effective as development costs can be shared.  Effective agreements relating to financial returns and freedom to operate can also be prepared by IP lawyers.

If looking for areas of potential collaboration, patent analytics can quickly identify areas of complementarity and the opportunity for financially rewarding collaborations. Such opportunities are not confined to the METS sector and are potentially available in the energy and manufacturing sectors generally.

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