#87 Evolving IP Strategy with Corporate Transformation

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00:00:22: on deplex.

00:00:36: If you go back to the nineteen forties Lerdahl was basically this This small publishing house in Norway,

00:00:42: right?

00:00:42: They're printing greeting cards and you know children's books.

00:00:45: Yeah

00:00:45: exactly greeting cards.

00:00:47: And today they are this massive global health care Titan with a very specific goal.

00:00:53: I mean there actively trying to help save one million more lives every single year by twenty thirty

00:00:59: which is just a staggering ambition.

00:01:01: It really is, and the secret engine that you know allowed them to make that spectacular leap from paper cards to saving lives.

00:01:08: it wasn't just advancements in medical science... No no not at all!

00:01:11: ...it was actually this radical almost ruthless restructuring of their intellectual property.

00:01:15: Yeah And thats exactly what we're looking at today.

00:01:17: We are pulling form a really detailed case study by CEAPI That's the Center for International Intellectual Property Studies.

00:01:24: They basically put Laredal under the microscope to see how a company actually navigates this kind of profound structural shift, and what we find is that Laredall guided by their head-of-IP Petter Westness they completely redefined What IP even means To A modern business?

00:01:40: And I want to say right up front For anyone listening who hears The words intellectual property an immediately glazes over Oh

00:01:46: sure yeah

00:01:47: because you know You're thinking dusty patent filings or like boring trademark lawsuits, this deep dive is going to completely flip that script for you.

00:01:56: We are looking at this entire journey through the lens of Westness's own strategy.

00:02:02: we're gonna see how a legacy manufacturer took what was usually just this dry administrative legal function and turned it into well The dynamic control mechanism.

00:02:15: Yeah, and to really appreciate the scale of that transformation you have to look at where they actually started.

00:02:20: Right?

00:02:20: The greeting cards!

00:02:21: Exactly after the greeting cards Laredal moved into making wooden toys And then they eventually developed this real expertise in soft plastics.

00:02:30: I hope so...and it was that specific capability in plastics That allowed the founder Osmond Laredall To collaborate with doctors back in the late nineteen

00:02:38: fifties.

00:02:39: right

00:02:39: They ended up creating the very first lifelike training mannequin right at that exact moment when mouth-to-mouth resuscitation was being validated by medical community.

00:02:49: Oh wow, so timing is perfect!

00:02:51: It WAS and THAT mannequin became RASUCHIAN which you know...the CPR doll almost certainly seen or practiced on if you've ever taken a first aid class.

00:03:01: Oh yeah, definitely!

00:03:02: I mean they built a physical product for a physical action right?

00:03:06: You compress the chest...you blow air into them out

00:03:08: Exactly.

00:03:08: And

00:03:08: for decades their whole business model and their IP strategy really was entirely built around that physical reality- you make a plastic mannequin..You patent the unique physical design of those plastic components....and then you sell it.

00:03:22: Right The entire focus was on manufacturing superiority, just protecting the physical molds.

00:03:28: But then of course the modern technological wave hit as

00:03:31: it always does right.

00:03:32: and suddenly health care training market didn't want a plastic doll anymore.

00:03:38: they demanded sensorized devices wanted internet things

00:03:42: we are talking about mannequins today that measure exact depth in frequency chest compression send data via bluetooth to tablet

00:03:51: Exactly, and run it through a software algorithm.

00:03:53: Yeah

00:03:54: to tell the medical student if they're actually saving a life.

00:03:57: for you know just breaking ribs

00:03:59: which is a seismic shift for any company but It is an absolute earthquake for one that's so steeped in traditional, self-contained manufacturing.

00:04:09: Right You are suddenly forced to move from molding polymers To integrating open source software Building data analytics platforms and designing digital user interfaces.

00:04:20: Well, and Petter Westness has this fascinating reflection In the CIPI case study On just how fundamentally Lairdoll had to change internally.

00:04:29: Just keep up.

00:04:30: Yeah he really lays it out.

00:04:31: He points.

00:04:32: Historically, Laerdal basically did everything themselves.

00:04:35: He notes that I'm quoting here... Exactly!

00:04:46: But today they have to navigate these collaborative digital partnerships and like open source code libraries.

00:04:53: And it changes EVERYTHING.

00:04:54: because when you do everything in-house You mix.

00:04:56: the plastic.

00:04:58: IP strategy is brilliantly simple.

00:05:02: You just lock the factory door?

00:05:03: Exactly,

00:05:04: you lock the doors and file patents on finished physical goods.

00:05:08: but when you transition to this collaborative digital model engaging external software developers figuring out how to beam data into a hospital server Your risk landscape just explodes in a thousand different directions.

00:05:22: Okay,

00:05:23: let's unpack this for a second because I have to push back on that premise.

00:05:25: Sure If you are company that has spent fifty years perfecting physical plastics and suddenly your entire industry pivots to cloud software And data analytics doesn't your legacy patent portfolio become basically useless overnight?

00:05:39: That is great question.

00:05:40: It feels like local hardware store Suddenly realizing it has to compete as silicon valley software developer.

00:05:46: How do you even begin to protect that?

00:05:48: You can't just slap a traditional patent on a stream of Bluetooth data.

00:05:52: Well, and that is exactly the existential crisis that crushes most legacy companies because yes your old patents do become significantly less valuable.

00:06:01: right That internal reorganization from a closed hardware-centric model To an open collaborative digital model.

00:06:09: it requires an absolute overhaul Of what you are actually trying to protect.

00:06:13: so What did they do?

00:06:14: Well, Wessus realized they had to completely shift their anxiety.

00:06:17: Instead of worrying about a competitor stealing plastic mold... ...they suddenly have to worry about trade secret leakage in joint software ventures or the incredibly murky rules around patenting software algorithms and the vulnerabilities using open source code.

00:06:32: Because if you partner with an external tech firm To help build this software that evaluates a nurse's CPR performance The immediate legal nightmare is Who owns that data?

00:06:43: Exactly, who owns the algorithm interpreting the compressions.

00:06:47: Right The convergence of hardware and software blurs the lines Of every traditional IP category.

00:06:53: You can no longer just hand a physical prototype To a patent attorney And say hey protect this thing.

00:06:59: Yeah it's not a wooden toy anymore.

00:07:01: No It requires the company to step back And conduct This holistic reorganization Where they actually generate their value.

00:07:09: And that is where Wessness and his team introduced a concept that honestly completely changed how Laredal organizes its efforts.

00:07:17: They called the value generation web

00:07:19: The Value Generation Web, yeah

00:07:21: Because the underlying technology has shifted from piece of plastic to digital ecosystem.

00:07:26: they basically had map out exactly were real value was being created for end user.

00:07:31: Right!

00:07:32: It's brilliant framework because it forces company trace creation values sequentially.

00:07:37: It starts from the absolute raw materials and moves all the way through to the final integration of this solution into customers' daily life.

00:07:45: Westonis explains this web perfectly in his study, let me actually just read his exact breakdown because progression is really key for their whole change management strategy.

00:07:53: here He says that it starts at bottom with raw material entering our factory.

00:07:58: That's physical product.

00:08:00: And then we add a layer software for control.

00:08:03: All of these needs to be then integrated into the customer's learning management system.

00:08:08: Our traditional IP portfolio has typically been on the physical product side.

00:08:12: What is fascinating here, if you look at four distinct layers...

00:08:16: Yeah let us break this down.

00:08:17: Layer one is raw material layer two is a physical product layer three is software for control and layer four integration in customers' learning management systems or LMS.

00:08:29: For decades, Laredell's entire legal and strategic focus was completely stuck on Layer Two.

00:08:34: Just

00:08:34: the physical product?

00:08:35: He even mentions in The Case Study that historically they would spend time and money patenting something as mundane as like...the fastening bolt of a mannequin's arm or this specific speaker system hidden inside the chest cavity.

00:08:48: But

00:08:48: the strategic shift here is realizing that at a digital age A monopoly on an internal fastening-bolt Is practically worthless.

00:08:55: Right?

00:08:56: nobody cares.

00:08:57: Exactly Westus recognized that maybe owning the exclusive rights to a speaker system doesn't matter at all.

00:09:03: if a competitor controls the digital dashboard, then the hospital administrator is actually looking every single day.

00:09:09: And this where he makes the major pivot?

00:09:11: He states and again I'm quoting... So we have spent time on trying to understand this and where it is important for us to have control.

00:09:29: And that is a profound organizational shift, I mean telling your engineers in you're legal team stop obsessing over the internal components.

00:09:38: That requires massive cultural change.

00:09:41: They basically move their IP focus out of factory and pushed as close to customer as humanly possible.

00:09:46: they

00:09:47: just stopped patenting individual physical parts and started fiercely protecting integration into customers actual workflow.

00:09:54: Exactly, it's a masterclass in change management.

00:09:57: I mean think about the hospital perspective.

00:09:58: for second The real value to a Hospital administrator isn't just physical mannequin.

00:10:05: It is seamless ecosystem of training.

00:10:08: It's the software that automatically analyzes the CPR performance, grades it and then feeds that compliance data directly into the hospital internal HR system.

00:10:19: so their nurses stay certified.

00:10:21: Right?

00:10:21: The Dataflow is the product.

00:10:22: Yes.

00:10:23: So if Leradel uses IP to control how that ecosystem integrates with the hospitals infrastructure they control the market.

00:10:31: even If a competitor figures out had a mold of cheaper plastic arm It doesn't matter.

00:10:36: Because

00:10:36: the cheap arm doesn't talk to the hospital's database?

00:10:38: Exactly!

00:10:39: Here

00:10:40: is where it gets really interesting though, its kind of like an Apple ecosystem right?

00:10:43: Well that a good analogy Like...

00:10:45: A copycat manufacturer can easily build smartphone out of exact same glass and aluminum But if they cant get iOS The App Store And iCloud To sync with it natively You know, the customer just isn't gonna buy it.

00:10:58: Lerdahl essentially realized they couldn't stop someone from copying the ingredients of their recipe so instead They locked down the entire experience in the delivery system.

00:11:07: Yeah The copycats have the product but they can't access the customer.

00:11:10: precisely

00:11:11: the physical hardware becomes secondary to the digital relationship.

00:11:15: But and this is a big but, executing that strategy globally introduces a massive layer of complexity.

00:11:22: Oh

00:11:22: for sure!

00:11:22: Because moving your IP focus to the customer integration layer sounds incredibly smart in a boardroom right?

00:11:28: Yeah But Lairdoll operates across wildly different global markets.

00:11:33: They face entirely different competitive threats depending on which sector they're actually looking at

00:11:38: And the CEPI study breaks down how Westness avoids like a one-size fits all approach.

00:11:43: He adapts this value generation web framework based on the specific business area, right?

00:11:48: So let's look at the resuscitation area first.

00:11:50: in This space Lairdall is facing off against massive highly IP intensive medical device giants Like Phillips and Medtronic.

00:11:57: Right And when you are operating in the same arena as Philips or medtronic your objective Is not to crush them Or block them out of the market entirely.

00:12:07: I mean good luck trying.

00:12:09: Exactly, it's impossible.

00:12:10: They have too much capital and mountains of foundational patents.

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00:12:53: So Lairdoll's IP strategy has to shift.

00:12:56: The goal becomes securing what is known in the industry as freedom-to-operate.

00:13:01: Okay, and just to clarify for everyone freedom-to-operate essentially means making sure you have the legal clearance To build and sell your product.

00:13:09: Yeah without getting sued into oblivion by a competitor who owns like A slightly similar patent

00:13:15: right.

00:13:15: exactly that against The Giants.

00:13:16: Lairdall uses its IP portfolio defensively and collaboratively.

00:13:20: okay so they engage in inbound licensing which means paying for the right to use someone else's patented technology, or they set up shared ownership arrangements.

00:13:28: So the IP isn't a weapon to destroy the competition?

00:13:30: No not at all.

00:13:32: it's the currency that used to ensure they have a seat of table and you know legal rights.

00:13:36: just keep playing game.

00:13:38: But then collaborative approach completely vanishes.

00:13:41: when look their patient care business area Right Because market dynamics were totally different.

00:13:45: there are fewer massive corporate behemoths in that specific niche, so Lairdahl's objective flips.

00:13:53: Yeah the strategy changes completely.

00:13:55: instead

00:13:55: of shared ownership they lean heavily into brand protection and creating steep entry barriers.

00:14:01: They want to control the complete value chain.

00:14:03: And then you have their global health sector which operates on an entirely different philosophical logic.

00:14:09: yeah this part blew my mind

00:14:11: right.

00:14:11: This is a not-for-profit sector for Lairdal.

00:14:14: It's primarily aimed at saving the lives of mothers and newborns during childbirth in low resource settings around.

00:14:44: How does a patent or trademark physically ensure safety in a rural clinic though?

00:14:49: It acts as a rigorous certification mechanism.

00:14:51: Okay,

00:14:52: so let's say Leradol develops a low-cost highly accurate newborn heart rate monitor for use Right.

00:15:00: If they completely open source it with zero IP protection, any third party manufacturer anywhere can start building copies.

00:15:07: Okay I see where this is going

00:15:09: right.

00:15:10: and if an under-regulated manufacturer uses cheaper failing sensors just to save money that heart rate monitor might give a false reading in a critical childbirth scenario.

00:15:19: An inferior copy doesn't mean lost revenue.

00:15:22: It means the newborn dies.

00:15:24: Exactly So.

00:15:25: an IP acts as shield against deadly knockoffs.

00:15:27: Yes

00:15:28: They use their trademarks and design rights to maintain strict quality audits.

00:15:33: A partner manufacturer can only put the larital name on a device or use the protected design if they prove that you're meeting exact clinical specifications.

00:15:41: The IP is deployed as a Quality Control Mechanism, to guarantee life-saving tool actually works when doctor reaches for it.

00:15:48: That

00:15:49: honestly reframes the entire concept of what trademark even is

00:15:53: It really does.

00:15:54: But bringing back to commercial side Wessonness talks specifically about how this strategic placement of IP protects them from one of the most aggressive modern commercial threats.

00:16:06: Low-cost B to B copycats, particularly manufacturers operating out of regions like China.

00:16:12: He explains this dynamic perfectly in a study.

00:16:14: he says they can develop similar products but They have problems entering into customer relationship.

00:16:20: So that's really where we need to control and have the critical IP.

00:16:22: And this brings us full circle, too The value generation web in that Apple ecosystem analogy you brought up earlier Yeah?

00:16:28: The copycat manufacturer is incredibly skilled at reverse engineering.

00:16:32: physical mannequin.

00:16:33: They can scan a plastic duplicate them all and build hardware clone for fraction of cost.

00:16:39: But because Lord All shifted their IP strategy away from those plastic molds and heavily guarded the digital integration, you know?

00:16:47: The software layer.

00:16:48: And the LMS connection...the copycat just hits a brick wall.

00:16:52: Exactly!

00:16:52: The copycat has the physical product but they are entirely locked out of the hospital's digital ecosystem.

00:16:59: Yeah.

00:16:59: ...and Wessnes is very blunt about adopting this aggressive posture when it is commercially necessary.

00:17:05: He says

00:17:06: With IP, we want to create barriers and increase risk for our competitors.

00:17:11: We wanna make it more difficult for them to enter into our field with similar products.

00:17:15: It's a highly adaptable strategy.

00:17:17: They use IP as a collaborative handshake when dealing with Phillips.

00:17:20: Right!

00:17:21: they used it is strict quality assurance badge in global health

00:17:24: Yep.

00:17:25: And then the uses this impenetrable fortress wall When fighting off low cost copycats

00:17:30: which naturally leads to the most complex challenge for any executive listening to this, measurement.

00:17:35: Oh sure!

00:17:35: The metrics right.

00:17:37: with a multi-tiered organizational strategy that is constantly shifting between physical patents digital trade secrets and varying market fronts how does Laredo actually prove to its board?

00:17:49: That this massive change management effort is working?

00:17:52: Yeah, because measuring the value of IP is notoriously tricky.

00:17:56: The CIPI case study highlights that Lerdahl relies heavily on strict international standards to keep this complex system organized.

00:18:03: They do.

00:18:04: Specifically they align with ISO-FiveSixThousandZeroFive and DINN-SevenSevenZeroZeroSix.

00:18:10: Right!

00:18:10: And those standards are essentially global gold standards for innovation management.

00:18:14: Okay... They ensure that Lerdahl's IP strategy isn't just a chaotic reactive process driven by lawyers filing paperwork.

00:18:22: Instead, these ISO frameworks force the entire company to utilize a strict Plando Check Act cycle.

00:18:28: Walk us through what that cycle actually looks like in practice for their team?

00:18:32: Sure!

00:18:32: So it means IP is integrated into the product lifecycle from day one.

00:18:35: Okay The engineers and the IP teams sit down early on development of new digital platform To identify exactly where ecosystem moat needs be built.

00:18:43: Do They execute strategy Whether that's filing specific software patents or locking down trade secrets with external developers, check.

00:18:52: They conduct rigorous audits to see if those protections are actually stopping the copycats... ...or genuinely securing the hospital LMS integration.

00:19:01: And then

00:19:01: act?

00:19:02: Exactly!

00:19:03: Act.

00:19:03: they adjust this strategy based on real-world competitive feedback.

00:19:07: It sounds incredibly rigorous but here is detail from a case study that absolutely fascinates me.

00:19:13: What's

00:19:13: that?!

00:19:14: despite adhering to all these strict international standards and utilizing the Plando check-act cycle.

00:19:20: Lairdahl remarkably does not explicitly track the financial return on investment of specific IP assets,

00:19:27: they

00:19:27: don't maintain a spreadsheet that says hey patent A cost us this much to file.

00:19:31: it generated why millions of dollars in exclusive revenue?

00:19:34: And that approach drives traditional corporate accountants absolutely crazy.

00:19:37: I bet most boards want every single dollar spent on legal fees and patent maintenance.

00:19:46: But Petter Westness has cultivated a deeply pragmatic, almost philosophical view of the value of their IP that completely bypasses that kind of bean

00:19:55: counting."

00:19:56: And his quote is arguably the most insightful part of this entire case study?

00:20:01: Yeah

00:20:01: it's really good!

00:20:02: He asks... When people ask me is it worth, should we spend less?

00:20:07: I find its extremely difficult to answer because We can measure the numerical size of our portfolio But that doesn't really matter at all.

00:20:15: However every time.

00:20:16: We're in a situation Which prompts us to think That there must be some IP here or i'm glad i have ip Because that gives you The necessary tools on my toolbox To take action.

00:20:25: thats when You see the real value.

00:20:27: If we connect this to the bigger picture.

00:20:29: by redefining IP as a toolbox, Westness achieves the ultimate goal of corporate change management.

00:20:35: Yeah!

00:20:36: He has taken a silent legal function and ingrained it into the daily mindset of the entire business.

00:20:41: It is no longer just an apartment calculating the sunk costs of patent renewal fees.

00:20:46: he strips away all the corporates speak And summarizes it perfectly?

00:20:50: He says We use ip actively To either reduce risks for us as an organization or to gain benefits.

00:20:59: It is genuinely that simple for

00:21:01: them.".

00:21:01: And because that mindset is integrated into every level of their operations, from the engineers designing the software to the sales team pitching the hospitals – The success of IP strategy doesn't need its own separate financial dashboard….

00:21:14: Right!

00:21:15: …the proof is simply reflected in overall success.

00:21:19: If Lairdoll is maintaining its market leadership, fending off the copycats and actively achieving it's mission of saving one million lives then The IP strategy is working.

00:21:29: So what does this all mean?

00:21:30: Think about like buying a fire extinguisher for your office building.

00:21:33: You don't sit at you desk calculating daily financial ROI Of that red cylinder hanging on wall...you dont ask how much revenue generated for you on Tuesday.

00:21:42: Right because thats not it purpose.

00:21:43: Exactly.

00:21:44: You judge its immense value by the simple fact that it is exactly what you need right when you need.

00:21:49: Oh,

00:21:49: love that!

00:21:50: When a competitor tries to encroach on their digital ecosystem or a manufacturer tries to push a dangerous failing knockoff into a rural clinic, Lairdoll reaches in to their toolbox.

00:22:02: The fire extinguisher is there fully charged and ready to deploy

00:22:06: And this seamless integration really is the true hallmark of evolution.

00:22:10: They evolved from a company that protected physical objects to a company That protects an entire life-saving ecosystem.

00:22:17: Yeah, and they achieved that by making intellectual property everybody's business not just the legal departments.

00:22:23: It is an incredible journey.

00:22:24: I mean we've seen how Lerdahl guided by Petter Westness navigated massive technological disruption.

00:22:30: They survived the leap from printing their own paper manuals To managing the internet of things.

00:22:34: They

00:22:35: completely reorganize their IP strategy, moving away from patenting internal physical parts like a speaker system and instead focus entirely on the value generation web.

00:22:45: They place there most aggressive control mechanisms as close to customer relationship is possible locking out copycats by dominating digital integration layer Right

00:22:55: And through it all they transformed IP From dusty legal obligation into vital flexible toolbox dedicated entirely to their core mission of saving lives.

00:23:06: Which leaves us with a rather profound dynamic to consider, especially when we reflect on our global health initiatives.

00:23:12: Yeah let's talk about that.

00:23:14: In the modern tech world We frequently romanticize The idea Of open-source innovation.

00:23:19: Oh absolutely!

00:23:19: We tend to assume That freely sharing all data and designs Is inherently the best And fastest way To help humanity.

00:23:26: Yeah...the narrative is often Patents only exist to serve corporate greed and like stifle progress.

00:23:33: But if a company like Lerdoll One that is strictly dedicated to saving lives globally, including in the lowest resource settings on earth uses intellectual property not to selfishly hoard knowledge but as necessary control mechanism to guarantee product quality and protect end user from dangerous variations...

00:23:50: It changes everything!

00:23:52: ...it really does.

00:23:53: How might change how we view controlled innovation?

00:23:57: Could tight corporate control, when aligned with a moral mission actually be the safest way to ensure that a life-saving technology actually does what it's supposed do?

00:24:07: I mean if controls would guarantee quality and quality is what ultimately saves lives then that dusty legal filing cabinet isn't just a defensive wall.

00:24:16: It is the heartbeat of the whole operation!

00:24:18: It really is

00:24:19: something definitely ponder as you go by today until next time.

00:24:25: Thanks for listening to IP management voice.

00:24:28: If there's any topic you'd like us to cover

00:24:30: in this podcast

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00:24:34: please get in contact and let us know.