In a recent interview, Wasilis Koukounis, a partner at the IP Firm Michalski Hüttermann & Partner, shared his insights on the interplay between inventions, patentability, and innovation within companies. This discussion is particularly relevant in the context of an upcoming seminar organized by the German Association of Engineers (VDI) and the Association of Patent Professionals (VPP), where these topics will be explored in depth. Here, we summarize the key points from the interview and delve into the strategic importance of integrating innovation and intellectual property (IP) processes within organizations. Here you get the full program: https://vpp-patent.de/seminar/4-vdi-vpp-seminar-fokus-innovationsprozesse

Introduction to Wasilis Koukounis

Wasilis Koukounis’ journey into the field of intellectual property began early, with a school internship at a patent law firm in Bochum during his ninth grade. This experience solidified his interest in becoming a patent attorney. He pursued studies in mechanical engineering, later joining Michalski Hüttermann & Partner. His background includes working at ThyssenKrupp, where he gained valuable experience in the mining and minerals business units.

The Interplay Between Invention and Innovation

In companies, two primary silos often exist: the patent department and the innovation/product development process. The patent department receives invention disclosures, while the innovation process focuses on product development. The interaction between these silos is crucial for effective innovation management. Koukounis emphasizes that engineers, who are typically the creative force behind inventions, often underestimate the value of their contributions. They may believe that only groundbreaking inventions are patentable, overlooking the potential of smaller improvements.

  • The Value of Small Improvements
    Wasilis emphasizes the strategic importance of small improvements in the innovation process. He illustrates this with a compelling example: a 1% monthly improvement can accumulate to a significant annual advantage. This may seem minor at first, but it can significantly set a company apart from its competitors. By patenting these improvements, companies can ensure that only they benefit from these advancements, thereby maintaining a competitive edge. This approach challenges the common misconception that inventions must be groundbreaking to be valuable. Instead, it highlights how incremental innovations can be just as impactful when strategically managed.
  • Encouraging Engineers to Report Inventions
    Engineers often underestimate the potential of their work due to a lack of training on patentability. They may believe that only revolutionary inventions are worthy of patent protection, overlooking the value of small improvements. Koukounis suggests that engineers should regularly reflect on their work, identifying any improvements they have made and considering whether these could be reported to the patent department. This proactive approach can uncover potential patents that might otherwise remain unreported. By encouraging engineers to engage more actively with the patent process, companies can tap into a wealth of innovative ideas that might otherwise go unnoticed.
  • Fostering a Culture of Innovation
    To foster a culture of innovation, it is essential to educate engineers about the potential for patenting small improvements. This involves not just reporting inventions but engaging in a dialogue with IP experts. By discussing their inventive thoughts, engineers can gain a better understanding of what can be patented and how these patents can contribute to the company’s strategic goals. This collaborative approach helps shift the perception of patents from mere costs to valuable business assets. Moreover, it encourages engineers to view their work as part of a broader innovation strategy, where even minor improvements can have significant economic benefits. By integrating IP management into the innovation process, companies can unlock the full potential of their engineers’ creativity and ingenuity.

Strategic Thinking in IP Management: The Excavator Teeth Example and IP Design

Wasilis Koukounis example from his time at ThyssenKrupp illustrates the strategic importance of IP management in protecting business interests. The scenario involves modifying excavator teeth to make them unique and patentable, thereby safeguarding the company’s after-sales market. This approach is a prime example of IP Design: Strategic Thinking in IP Management, as it demonstrates how small, seemingly insignificant changes can yield substantial business advantages when combined with strategic IP management.

  • Background: The Challenge
    In the mining and minerals business unit, excavator teeth were identified as a crucial component for generating revenue. However, these teeth were often produced cheaply in countries like China, which threatened ThyssenKrupp’s after-sales market. The challenge was to find a way to protect this market without relying on high production costs or complex technological advancements.
  • Solution: Modifying Excavator Teeth
    Koukounis proposed modifying the excavator teeth so that they could be attached to the bucket in a unique way. This modification did not necessarily make the teeth better in terms of material or functionality but made them incompatible with standard parts produced elsewhere. By patenting this unique attachment method, ThyssenKrupp could prevent competitors from producing compatible teeth, thus securing its after-sales market.
  • Implementation of IP Design
    This example is an implementation of IP Design for several reasons:

    • Strategic Business Rationale: The decision to modify the excavator teeth was driven by a clear business rationale. The focus was on protecting the after-sales market, which was a significant revenue source. This strategic thinking aligns with the principles of IP Design, where IP management is integrated into overall business strategy.
    • Innovation through Small Improvements: The modification of the excavator teeth demonstrates how small, incremental improvements can be valuable when combined with strategic IP management. This approach challenges the common misconception that inventions must be revolutionary to be patentable.
    • Integration of IP with Business Operations: By involving IP experts in the business unit, ThyssenKrupp ensured that the modification was not just a technical improvement but also a strategic move to enhance its market position. This integration of IP with business operations is a key aspect of IP Design.
    • Protection of Competitive Advantage: By making the excavator teeth unique and patentable, ThyssenKrupp protected its competitive advantage in the after-sales market. This protection prevented competitors from copying the design, thereby maintaining ThyssenKrupp’s market share and profitability.
    • Nexus Patents Concept: The approach can also be seen as an example of what Koukounis refers to as “nexus patents.” These are patents that protect critical points in a network or system, making it difficult for competitors to bypass them. In this case, the unique attachment method for excavator teeth serves as a nexus patent, ensuring that competitors cannot easily replicate the system.

The excavator teeth example illustrates how strategic thinking in IP management can transform seemingly minor improvements into significant business advantages. By integrating IP management with business strategy and focusing on small, incremental innovations, companies can protect their competitive edge and enhance profitability. This approach is particularly relevant in today’s competitive environment, where companies must innovate continuously to stay ahead of their competitors.

Business Rationale and Profitability

The business rationale behind patenting improvements is crucial. Companies should focus on where profits lie and how exclusivity can enhance their market position. By making products less compatible with third-party components, companies can secure their after-sales markets and maintain profitability.

  • Overcoming Misconceptions About IP Costs
    Executives often view patents as costly burdens rather than valuable assets. This misconception can lead to underinvestment in IP, which can be detrimental when competitors secure key patents. Koukounis notes that patents are not just expenses but tools that can protect and enhance business value. He also clarifies that under German law, inventors, including R&D engineers, are entitled to compensation for their inventions, which can be a cost but also a motivator for innovation.
  • Improving Understanding of IP at the Executive Level
    To improve the understanding of IP’s role at the executive level, it is essential to demonstrate its strategic value. This can be achieved by highlighting cases where patents have protected market share or prevented costly lawsuits. Encouraging a culture of innovation within companies involves educating executives about the economic benefits of IP and fostering collaboration between engineers and IP experts.
  • Encouraging Innovation Among Engineers
    Encouraging engineers to discuss their inventive thoughts with IP experts is vital for fostering a culture of innovation. By providing concrete examples and involving experts in the business units, companies can create an environment where engineers feel motivated to contribute to the patent process. This approach helps shift the perception of patents from mere costs to valuable business assets.

Conclusion

Wasilis Koukounis’ insights underscore the importance of integrating innovation and IP processes within companies. By recognizing the value of small improvements and fostering collaboration between engineers and IP experts, organizations can enhance their competitive edge. Overcoming misconceptions about IP costs and encouraging a culture of innovation are key steps towards leveraging intellectual property as a strategic business tool. As companies navigate increasingly competitive markets, understanding and effectively managing IP will become ever more crucial for success.

About the interviewee

Wasilis Koukounis is a mechanical engineer with extensive expertise in traditional mechanical engineering and a special focus on computer-implemented inventions. As a member of the executive board of the Association of German Engineers (VDI) NRH BV, he also leads the Working Group on Intellectual Property Law and moderates the annual VDI/VPP seminar.