How to Keep Innovating with IP Lawyer Daniel Shulman

SUMMARY

Daniel Shulman, an IP Lawyer at Vedder Price in Chicago is on today to discuss how to make space for a robust culture of innovation.

He and Josh talk through the specifics of creating a place where innovators are free to innovate – even during a pandemic. They discuss remote work and how to set your employees up for success in that environment. We hear about creating a pipeline of ideas and allowing people to view work a little differently during this unprecedented time.

This interview was recorded in March 2020 at the beginning of the COVID-19 pandemic.

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Mr. Shulman is an IP lawyer whose practice focuses on turning innovation into value. Creating value from innovation requires a holistic, strategic, and flexible beginning to end approach. While most outside lawyers only specialize in the last chapter of the playbook—sending nasty letters and going to court—Mr. Shulman likes to advise his clients on how to start earlier. Turning innovation into value begins with a culture of innovation, effective intellectual property strategies designed to align a company’s intellectual property to its intellectual capital, and culminates—ideally—with a product in the market and not a product in the courtroom.

Going from the drawing board to the market was his goal when he was Chief IP Counsel for a major consumer goods company for twelve years, and that knowledge and experience is unique among outside lawyers. When his clients do need to litigate to protect their innovation, or secure their own right to practice their innovation, Mr. Shulman has the experience and track record of success to lead all aspects of litigation, from trial through appeals. Today, his practice focuses on all aspects of intellectual property acquisition, monetization and enforcement, including complex patent litigation, trademark litigation, unfair competition, advertising disputes, copyright litigation, trade secret litigation and all aspects of patent and trademark prosecution and portfolio management.

Mr. Shulman has experience with innovations relating to consumer packaged goods, electronic exchanges, insurance industry, telecommunications, financial products, mechanical and electrical devices, and prosecuting patent applications before the U.S. Patent and Trademark Office. He also advises clients on intellectual property transactions including technology development agreements, confidentiality and joint development agreements, licensing and mergers and acquisitions.

Full Transcript with IP Lawyer Daniel Shulman

Erin Srebinski: [00:00:14] Hey everyone. We’re back with another episode of Ask an Innovator. Today we have Daniel Shulman on, he’s an intellectual property attorney here in Chicago.

His practice focuses on turning innovation into value. He talks with Josh about how to create a culture of innovation and they go through the impact that COVID-19 has and has had an innovation and business in general, check out cityinnovations.com/askaninnovator for the full transcript. And for some more information about Daniel.

Thanks for listening.

Josh Barker: [00:00:44] Yeah. Blocked in our houses. You’re at home, I assume.

Daniel Shulman: [00:00:47] Yeah, absolutely. Our office has been for all intents and purposes closed for a couple of weeks. So, we’re all just working from home.

Josh Barker: [00:00:56] Oh man. How’s that going? Like, are you used to working from home or are you, is that a whole new world for you?

Daniel Shulman: [00:01:03] No. I mean, I’ve done it on occasion, although I’m like a lot of people who, I’m making the air quotes for work from home. You know, when you say you’re working from home, it’s because you need a mental health day and just don’t feel like coming into the office. And then it’s an open question of how much work you’re actually getting done. To actually work from home and put in an eight hour day and bill for it and do the work.

I’ve done it in the past, but never in a consistent consecutive fashion like this. So truth be told, what it amounts to is I eat my own snacks and drink my own coffee.

Josh Barker: [00:01:49] Oh yeah. And it’s the same here. Our team is very used to being in the digital space. I mean, I think that’s probably a, a space with software engineering and, you know, designers. They’re probably a little bit more used to. When you say work from home, you actually mean, like you were saying, it’s a mental health day.

They actually mean, truly, they’ve worked from home. So they’re probably a little bit more used to consistency and working remotely. Our team was probably about before all this and on any given day, anywhere between 60 to 80% work from home. Or work remotely, you know, work from anywhere I should say.

Cause like it doesn’t necessarily be at home. It’s like Starbucks or something. So it’s for them, they’re like, Oh, I guess this is just everyone’s working from home now. They’re just kind of, obviously I think people are mostly climbing up the walls more than anything.

Daniel Shulman: [00:02:43] It’s an interesting thing. How, a topic for another day, how this is going to affect the legal industry in particular, although there are a lot of industries that I think are in the same boat that are going to have to rethink, or will have rethought when this is over, some of their business model. You know, it’s interesting that two things contribute to big law firms basically self-destructing.

And those two things are, they grow too fast and they bring in a whole bunch of people who have promised books of business and it doesn’t materialize when they become too spread out and over leveraged. And over time that really destroys a law firm. But the other thing that law firms do that contributes to them not being sustainable is they’re really dumb about real estate.

And they get in, they build offices in markets that can’t really sustain the work. They spend way too much on their office space in sort of an arms race to see who can have the nicest lobby. And you’re seeing some of that now in the last week. Big name law firms that are already starting to cut partner pay and lay off employees and you look at them and you know, they’re the big ones.

They’re the big ones because they have mass, but they also have massive overhead. And the irony is your wonderful, beautiful lobby with the gold plated ceilings is totally worthless to you in this economy. Firms like us are really well-positioned to be able to thrive without having to make drastic cuts that tell the market that you might need a good law firm, but who wants a business advisor that can’t run their own business? There’s so much of that that goes around. I think that the idea of, okay, wait, we’re all effective working from home and everything is equalized. Now, you know, you don’t have the fancy space and you don’t get to advertise it.

You’ve got offices all over the world because everybody is equalized. There are now instead of, you know, offices in Singapore, in London and Dubai and everything. Now, you’ve got an office, in every city in which your employee works and that’s it. Everybody else has just the same. Why are you charging me $900 an hour for the same overhead that the firm is charging $400 or $500 an hour?

I really do think that some of the firms like us who are the midsize firms that are really well-managed are going to see clients understand the benefit of that kind of model. It will be interesting coming out of this and see how those big-name firms that trade on their name survive.

Josh Barker: [00:05:44] What I would even say is it’s interesting to hear you talk about that space because I think a lot of spaces, including digital, like I was just talking about actually are pretty similar in the fact that a lot of times it’s a dog and pony show, right? If you know, in terms of competitors or anything like that, they’re like, Hey, let’s do a walk through of our office. We’ll kind of introduce you to the partners, bring them to a corner, high rise offices versus, “hey, we’re incredibly intelligent, smart, and experienced in our industry and we can help you.” And that’s what you mean by equalize. You don’t have a dog and pony show in these types of environments. You have you, you have a person.

Daniel Shulman: [00:06:23] Yep, exactly.

Josh Barker: [00:06:24] It sounds like your mid-sized firm is very similar to our firm. That’s been our approach all along, even before this. We’re big proponents of giving away some free advice. So you can kind of almost test us out prior to even doing a project with us to see how we sync and how we operate and I think most of the time that’s what seals the deal.

Very interesting. How have you guys adapted to this crazy environment?

Daniel Shulman: [00:06:50] For the firm or for me, personally?

Josh Barker: [00:06:51] Well, I mean, both, I guess,

Daniel Shulman: [00:06:53] Well, I mean, like I said, the firm has really moved quickly to get people out of the office and expected people to work from home as soon as it was feasible to do so.

I know they’ve been proactive. It’s about making sure that even our support staff who aren’t used to working from home, like our administrative assistants, and so forth are set up to work from home. So folks that need, for example, monitors. A lot of our admins are used to working on dual screens at the office.

Dual screens are a luxury at home, assuming that you even have one. Because so many people just work off a laptop. And so it was sending out additional monitors to people’s homes to make sure that they can work. We stress-tested all of our systems as people were working from home.

There was like a Saturday at two o’clock. Everybody in Chicago would log onto the network at the same time. They would open a document and just make sure that everything was working up to speed. And so the IT group was very proactive about making sure that we would be able to do this when the need came.

Which of course it did. And there’ve been a couple of hiccups as you would expect, but for the most part everybody’s been able to do well. They needed to do some of the things that we’re adapting, just to make sure that the trains are running on time, so to speak. Yeah, they’re really pushing.

Everybody’s got to make sure they get their time in every day. Most lawyers are good about that, but there’s a significant group that don’t enter their time, like once a week or, you know, hand their time sheets to their admin on Friday or something. We need to make sure that we’re continually monitoring how the business is doing so that we can be nimble, if there’s a downturn. So getting our time in so we can have real time data on how the business is doing is really, really important.

Making sure that invoices are going out via email instead of hard copy, because there’s nobody at the office in most cases to actually pick up the bills. So we’re sensitive to our clients’ needs. We’ve been talking about, from the CFO’s office on down, about things that we might need to do to accommodate clients that have cashflow issues and trying to normalize some of those activities. But we’ve been very, very proactive. We’ve had frequent conference calls,where the CEO of the firm and the CFO of the firm have updated us on what’s going on.

Everything has been very transparent. We’re very transparent as a firm anyway, partners. Shareholders know everything that’s going on all the time. There’s no black box. We get reports on everybody and everything every day and every month. So it makes you really feel confident that we’re not like some firms where management tells you everything is good.

Then all of a sudden, somebody calls you in your office and says, we’re de-equitizing 30% of our partners. I mean that doesn’t happen. Nobody at Vedder Price is going to get blindsided by anything.

Josh Barker: [00:09:44] Great. It sounds like some great leadership.

Daniel Shulman: [00:09:47] I think Barack Obama said, or maybe even Michelle Obama said it about being President.

Being president doesn’t change who you are, it reveals who you are. In a crisis like this doesn’t change what a law firm is it reveals what a law firm is. And that’s been a very, very positive environment for us.

Josh Barker: [00:10:06] Yeah. That’s good. This will make for an interesting podcast because I think you and I talked about how long ago? Two months? Three months ago? Something like that. I mean, it was a little while ago. Those were far different times. This may have been a blip on the radar. It wasn’t a huge topic. It wasn’t affecting our world yet. And now we’re in a completely different spot.

Daniel Shulman: [00:10:29] Yeah, absolutely.

Josh Barker: [00:10:30] I mean, how are you guys in terms of your clients? For us, we’ve definitely had a lot of clients. I think a lot of organizations have clients in hugely impacted industries. We have a client that runs conferences. Right. So it’s like, okay, well there are no conferences going on or restaurant delivery.

We’ve got a client in there. Right. The restaurants shut down. I’m sure you guys have probably had to adapt too to different client needs as there’s been a huge impact.

Daniel Shulman: [00:11:03] Yeah. We have a fairly diverse client base, as you would imagine, with a law firm of 300 lawyers.

I can’t speak for everybody but I can tell you how I’m dealing with it. And my clients are interesting because, you know, I came from an in-house job as Chief IP Counsel for basically a food packaging conglomerate. There are aspects of those businesses, an example is the Reynolds consumer products business.

They make Reynolds wrap and Hefty bags. Their dream come true is for more people to cook at home. They’re using more foil, they’re using more storage bags, they’re using more parchment paper. And they’re using more trash bags. This is in another environment. Their dream would be for there to be no restaurants. I think it’s great for their business.

Then you look at their sister company Pactiv, which is a food service company. All of their biggest clients are foodservice distribution. So like Sysco, US Food Service, the restaurants, Starbucks, McDonald’s all that stuff. Even though there’s more takeout, the volume is still a fraction of what it was. And you know, so many of the restaurants are just flat out closed.

So that business is going to really, really suffer and while I’ve got a business. that makes bottle caps for, you know, water bottles and Coke bottles and all that other kind of stuff. And everybody’s buying bottled water. The problem is nobody’s drinking more water, so it’s kind of like the toilet paper problem.

Nobody’s going to the bathroom more so you can’t ramp up your capacity because nobody’s going to need more toilet paper. They’ve already bought way more than they need. And so there are businesses that flat out can’t fill orders because they’re coming too fast, but they’re not going to build up the capacity to meet those orders because reabsorption of the capital would cost more than not making the orders.

And so do you think that, “Wow, this is great. The toilet paper business must be booming!” No, they’ve got real issues trying to manage their capacity in the same way that our Reynolds business, I think does. I mean they could continue to make more stuff, but eventually people are going to go back to work. And then what are you going to do with those assets that you’ve developed?

And so for businesses, that’s a real challenge. What I’m doing for my clients really is, and I think about this and I’m trying to be really sensitive about it because you don’t want to be a vulture. It’s true that with every crisis comes opportunity, but you have to be empathetic and compassionate.

Josh Barker: [00:13:58] It’s about people.

Daniel Shulman: [00:14:00] It’s about people and people who are struggling. And I don’t want to be the one to send an email to say, “Hey, I know you’re struggling, but I’m still open for business. Let me help you.” Because that could be taken any number of ways. And even though I want to convey that message, I have to be really delicate, but I am reaching out to clients to let them know that I care about them and that I’m thinking about them.

And so what I’ve been doing are really short messages that just start off by saying, you know, I hope you’re well, I’m sending my sincere best wishes for you and all of your loved ones. I’m here to help if you’re capacity constrained because of impacts on your business.

But the most important thing I want you to know is that I’m here and care about you. And look, I’ve got ideas and we can sort of segue into some of the more innovative things that from an IP perspective that companies can do, but I’m careful not to send out those emails with those kinds of ideas, because it seems cold hearted and opportunistic.

I’m not trying to take advantage of somebody else’s misfortune. Despite the fact that I’m a lawyer. So one of the things that occurred to me from an innovation standpoint and, you know, it’s hard being an IP lawyer in an environment like this, because you think about what you can do to help people.

If you’re in the financial services world, if you’re in the employment world, even to some degree in the corporate world, you can really contribute to helping people, individuals, companies manage through this crisis. As an IP lawyer and one of the reasons I went into IP law is because it’s not life or death.

It’s just about money, basically. I’m not litigating, doing anything that really is life or death. I mean, it’s important. Don’t get me wrong. It’s profoundly important, but it’s sort of a nobler area to practice law. On the other hand, when things are really life and death, like they are now. It’s really hard to make an impact as an IP lawyer.

So I started to think about, let’s assume that I work still in-house, as an IP lawyer, and everybody is running around trying to figure out how are we going to survive this? And nobody’s asking me for anything. What would I be doing to try to add value in a situation like this?

One of the things that I thought about was when everybody starts working remotely and you are in a, especially with bricks and mortar business, the thing that’s going to take the hit pretty significantly is your product development, right? Because there’s only so much product development you can do remotely if you’re not in a lab.

If you’re not at a pilot line and if you’re not prototyping things if you can’t run trials. You can do CAD drawings and you can do computer-aided design and finite element analysis and you can come up with products and model how they would work and all that. But you can’t really get to the final step of product development, so you can physically make something.

And you can’t do that from home. What’s going to happen to people’s product development pipeline, and what’s happening to companies that we’re on the cusp of launching a product, but now have put everything on hold? What does that do to the pipeline and what are those engineers doing if they can’t really develop new products? Then there is a group of companies, a lot of them, frankly, who have one or two products and we encounter this quite a bit.

My clients encounter this quite a bit in my world. You know, most of my clients are big. They are number one or two in their markets, but a lot of times they compete with smaller nichey companies that have one or two products that they’ve got some IP on. And those products have succeeded in the marketplace because they got patents and exclusivity and the products were really good, but that’s a very narrow, very small business, often individually owned by the patent holder and they can survive when business is good, but they don’t have the scale or the capacity to weather a downturn.

Those companies might not survive. And if you are either one of those companies or the bigger company that wants to have access to that kind of product line now would be the time to talk about buying that intellectual property or getting a license. So, if you are able to take or license that intellectual property or take an option to that intellectual property if the company goes out of business and throw them some money for the option, it could be a win-win. The company that has a couple of patents that are just sort of sustaining one or two niche-y products that they’re very, very successful in, but it’s very, very narrow.

They might need that infusion of cash, just to see if they can weather the storm and survive. If they can’t, they get the cash and you get the intellectual property. Now is the time to start thinking about those kinds of things. One of the things that I’ve talked to some of my clients that have really good relationships with is, they know where I’m coming from, and I’m not coming off as opportunistic, because we’ve got that relationship. Just talking to them about, all right, who are some of these companies?

Some of them are very top of mind and saying, “Is this the time to go approach company X who’s sort of been a thorn in your side and say, what can we do to partner together, because we think we’re going to survive this, but you may not.” And if you just go bankrupt, you’re going to get pennies on the dollar for that intellectual property.

What can we do that’s a win-win? And, you know, and even using some of our patent analytics tools to go searching for some of that IP and find out what’s out there. Because if you’ve got a healthy balance sheet, you might be able to emerge stronger and, again it’s opportunistic and it’s predatory, so I can’t suggest that to everybody. I can’t write an article on LinkedIn without coming off as you know, as cold-hearted. But if you have a good relationship with your clients and you’re able to think outside the box and be innovative in your approach, now’s the time to do that sort of thing. Because we’re all sitting around trying to figure out how can we be useful.

And so that’s one of the things that I’ve approached some of my clients about. And I think it’s on their radar. I don’t expect anybody to jump right in because they’ve got other things going on as I expect, but I know that there are certain clients on this, and that’s a sort of thing that I’m trying to bring to clients when I can.

Josh Barker: [00:20:51] This climate definitely brings good opportunities, but it’s just the way I phrase it to people. I think this is just a weird time. Isn’t it? It’s just a time like no other. It’s just very interesting times. I think that’s some good advice and I think it is difficult to recommend certain things without coming across as opportunistic, because there is a lot of opportunity.

And I think having a genuine heart for people and having your heart in the right spot is something which sounds like your heart is. That’s what matters the most. And trying to make sure everyone that’s where you’re coming from.

Daniel Shulman: [00:21:26] I appreciate that. I’ve always said that when I forge relationships with lawyers when I was in-house when I was the client, I always hire the name on the bottom of the letter and not the top of the letterhead because I hired lawyers and not law firms.

When I deal with my clients, it’s all about that personal relationship and being a trusted advisor. Trust is really important and you have to have empathy and compassion in order to earn trust. And so having the right approach is critically important to me. It annoys me, probably more than it should, when I get frequent Coronavirus updates from law firms and from businesses telling me how much they care about me when it seems transparent. And I’ll give you an example. Here’s a real-world example. You know, I was supposed to go to Berlin for a conference in February. We’re going to go for a conference. So my wife and I, we’re going to finally go on a honeymoon and we’re going to stay for an extra few days in Berlin.

We booked three or four days with a big hotel chain in Berlin. Of course, the whole conference got canceled. We canceled the reservation and the hotel chain wouldn’t refund $1,200 or whatever it was, or 1200 euros that we spent on the reservation because we didn’t cancel within 30 days.

Which of course, who knew, right? And you know, so that was annoying. And we called them and they said, well, we’ll waive the cancellation fee of like 250 euros. Well, great but you know, we’re still out money. And they said, you know, “we’ll credit you, just make a reservation to come back to Berlin within a year.”

Who knows? Right. And it was only there for the conference, frankly. Berlin’s wonderful. It wasn’t our first choice for our honeymoon. We were going because I was going to be there for a conference already. That was annoying. And we went back and forth with their hotel manager and really got nowhere. And wouldn’t, you know, because I have loyalty rewards with this chain, I got a form email from the CEO of this hotel chain about how much they care about us as clients and customers, and they’re doing everything they can to help us and make their accommodations available and all of this.

Well, that’s rich, right? I got the guy, the CEO of this hotel chain’s work email and I forwarded his note, his form letter that he sent to, you know, a million people right back to him, back to his email. And said, “Hey, I got this, you say this, except your property in Berlin, won’t refund us any of our money, which seems awfully cold-hearted and opportunistic for you to keep my money at the same time that you’re telling me how much you care. You got money for free. Plus, if you have any kind of business disruption insurance, you’re getting reimbursed anyway. I got nothing and your email’s not well-taken.”

Don’t you know, within 48 hours, I got a call from their Chief Customer Officer in Europe, profusely apologizing and crediting our account. If you’re going to send those emails, letting you know how much people care and how much you care, be prepared to stand behind it and be authentic. Because the worst thing is to get one of those emails and just feel like you just got a form email because you’re on a mailing list, but nobody really cares.

Josh Barker: [00:25:06] Well, that’s a great ending to the story though. I mean, it sounds like they did step up and put their money where their mouth is.

It definitely is in trying times that shows the companies that actually genuinely care. And those that are just saying it to save face, right? To say, oh, we care about our people when they really don’t.

Daniel Shulman: [00:25:24] It will be interesting as these companies transition back to work, how things pick up, because I can imagine that as people transition back to work, there’s going to be so much work just to catch up.

And I wonder as somebody who comes at it from the perspective of an intellectual property lawyer, and thinking always about product development and innovation in particular, what do you do as an innovator? And how do you continue to innovate when you are now just playing catch up? Because one of the things that is really a killer for having a culture of innovation is just being reactive instead of proactive.

And there’s going to be a lot of being reactive when folks get back to work and it seems trite but, the key to having a culture of innovation is having innovators that are empowered to innovate. And what you have to be careful of [and I’ve seen this in a lot of different contexts] but you have to be careful of is making sure as you’re playing catch up, you’re continuing to empower the innovators to innovate and not having them be reactive because your pipeline is already at a disadvantage. You’re going to need to refresh that pipeline if you’re an innovative company. From the moment that you can begin refreshing it. And the way that you have to do that is you have to create a culture that empowers your innovators to innovate.

I can remember – and my beginnings were pretty humble, my first full-time job was at a fast-food place. It’s not like McDonald’s or Burger King, but one of those fast food places that, you know, when you’re in Chicago. So they have Italian beef and hot dogs and hamburgers that are made to order.

There’s red and yellow linoleum on the walls. Ketchup bottles on the table. That was the kind of place that I worked at from basically my sophomore year of high school, actually through law school. I remember coming into work one day and the guy who was quote-unquote, the assistant chef, to the extent that, you know, there was such a thing at a hot dog stand, I’d say he fancied himself the assistant chef.

He was sitting at one of the tables. He was writing down different combinations of ingredients for chicken sandwiches, which I don’t know what the motivation was for that. I mean, we already had a chicken sandwich. But he was just making stuff up and we sat there and we came up with these different combinations and we named them all.

And, you know, by the end of the afternoon, we had 11 different chicken sandwiches. This became the ‘healthy for your heart’ menu, which was totally false advertising. I mean, other than the fact that chicken, the one smothered in bacon and cheese, wasn’t healthy for your heart, but all of a sudden, now we have this whole healthy for your heart menu, with 11 different chicken sandwiches, and it sort of launched this period of innovation.

Next thing you know, the owner kind of embraced it. There were meatball sandwiches, which lasted for about a month. Freshly frozen swordfish steaks, which had no business being in a hot dog stand. I think 20 years later, and I think the original swordfish steaks are probably still in the freezer. The restaurant kind of transformed itself and it still had the hot dogs which paid the bills and the hamburgers and the fries and all that. But it was able to offer something more to people.

It wasn’t driven from anything other than an employee being empowered to just do something different. And the transformation, which ended up being permanent, the chicken menu stayed as long as that guy owned the restaurant, it was very popular and it came from the transformation, came from an employee being free to innovate.

And that model of employees being free to innovate, I’ve seen in different contexts. I mean, I saw it at a hotdog stand. And then when I was at Motorola, the polar opposite of a hotdog stand when it comes to technology and innovation. I remember when I was at Motorola. This was mid-two-thousands and it was at the height of 3G. 4G was still on the horizon. Hadn’t even launched yet. We were doing a lot of work. We were trying to figure out, how are we going to really succeed in 4G? Because a licensing model for 3G was a disaster. Everybody was paying way too much in royalties to very small patent holders.

And we were trying to figure out how are we going to innovate and really take advantage of 4G? And we had, I remember, I convened a meeting of a bunch of engineers. I mean, these were some of the smartest, most intimidating people you’d ever be in a room with. And I was with some pretty smart people in college. But these guys were, and women were – I could barely understand some of the language that they were using. We were sitting around trying to innovate for some 4G innovation. Somebody raised their hand and started to describe a product or a process. And he was reading from his lab notebook and I had no idea what the heck he was talking about.

One of the other people said, “you know, I mean, that’s so far advanced I mean you’re talking 5G. We’re just not even close to there yet.” And what occurred to me was what a culture of innovation, again, looks like. There was a guy who just had his lab notebook, had thought of something that was two generations ahead of where the world was.

He did it because he was empowered to do it. Nobody told him not to. And he had that freedom to just go ahead and innovate. And that’s empowering innovators to innovate. From the bottom up, just leaving them alone and encouraging them to do it or giving them the freedom to do it. Not putting shackles on them is what creates a culture of innovation. And I saw it from the opposite end, too. I remember there was a time when I was at the consumer packaged goods company and of course, you know, a customer comes to us and says “the first company that developed this product, we’re going to guarantee trial distribution,” which, you know, unpack that for a minute, right?

It’s trial distribution. It wasn’t my call as a business person. They dropped everything to develop this product for the customer because the customer asked them to. I remember sitting in product development meetings and looking over the spreadsheet. All of these projects were on hold because the resources were going to chase what the customer wanted. We dropped everything.

In six months we were on the market and the customer put it on trial. You can guess what happened next. It didn’t sell quite as much as the customer wanted to, and we never got full distribution. And what you realized was this was the opposite of having a culture of innovation. This was putting the shackles on the innovators. Putting everything on hold to chase what a customer wanted at the expense of doing pure innovation.

And what happened was it came down to a very, very frequent question, which is one of the worst questions an innovator ever has to encounter. But as a business, it’s critical, which is, “will the customer pay for it?” And here’s the thing, when you’re doing pure innovation for innovation’s sake, you can’t answer that question because you don’t know what the “it” is yet.

And so you have to be able to balance that and you have to enable your innovators to innovate. You have to empower them to do it. I tried as an in house lawyer to really do what I could from a law department standpoint to create innovation. So a couple of things that were really important, that the law department could do, was to communicate a strategy to convert that intellectual capital to intellectual property. So to have a patent strategy where you identify what were the areas that the company needed to have exclusivity in order to be successful, identify patent filing goals and have that aligned with, and in some sense, driven by your innovation strategy.

And you can show results when you do that because it immediately makes you make better decisions about your patent portfolio. You don’t pay for things you don’t need. You’re much more focused. You save money when your filing strategy is disciplined. Because you’re saving money, the management will just sign off on it.

And when management signs off on it, then you go to the innovators and say, we have an innovation strategy. All of a sudden they feel empowered. They view what they’re doing as part of an overall strategy for the company. That empowering of innovators is one of the things that makes innovation happen.

Going out and doing invention mining, which was periodically letting the innovators know whatever you’re working on that’s not directed to a particular project, but you’ve just jotted something down in your lab notebook twice a year or four times a year, we’re going to go mine some of that stuff and we’re going to really pay close attention to it. Maybe it turns into something. Maybe it doesn’t, but we’re going to give you an outlet to go do that sort of thing. All of a sudden they feel invested in and they feel like they are contributing. When people feel like they’re contributing, they’re empowered to continue.

I needed a couple of mid-level managers to make sure that I had buy-in. Then I can get the people that reported to them free for an afternoon. I didn’t need to go to the CEO. Didn’t need to ask my General Counsel. I didn’t need to go to the presidents of the business units to get approval for this.

If I can get time on people’s schedules, I can build it from the bottom up. And I wouldn’t have to ask permission, right? Because the thing is if you drive results and if people are innovating and it works, the CEO will leave it alone. I didn’t realize as a lawyer that I could build a culture of innovation from the bottom up.

Really taking the time to get to know the innovators and putting things in place that would not rock the boat. That wouldn’t make the C-Suite think I was distracting from other things. We would demonstrate results after it was done. And it’s funny – people sort of at the lower end of the, you know, the bottom of the pure corporate pyramid, which are the ones that make things run, they always view the law department as an extension of management.

And so when the law department comes and shows an interest, by proxy, they view that as the C-Suite showing interest, even though they don’t know that I haven’t gotten any approval from the C-Suite. But, I don’t tell them that. As an in-house IP lawyer – you are really uniquely positioned to build a culture of innovation in a way that you don’t think possible.

It is one of the most valuable lessons I learned as an in house IP lawyer about building a culture of innovation. Having that be a successful model for keeping pipelines going and for keeping people engaged. I think when we all get back to work, those of us who are in the intellectual property role, especially in house IP lawyers, but even outside IP lawyers who have close relationships with their clients ought to be getting in front of the people that they can to encourage innovation. Empowering the innovators to innovate because that’s going to be critical. They’re going to be forced to chase. Let them know that it’s okay to innovate in their free time. You will benefit the company immensely.

Josh Barker: [00:37:29] I agree. And you know, what’s interesting is during this time [I think you would probably agree too] is that when we get back to work and some of the things that I’m talking to my clients about, which, again, going back to your point about being opportunistic, trying not to sound like that, but honestly, What we’re talking to our clients and saying is, “What are your competitors doing right now in this current climate?”

Well, everyone is hunkering down, right? Everyone is saying, “Well, we just got to weather the storm, not do anything new and just weather it.” Right? But I think if you look at it with a different lens and you look at it with opportunity, you could say, well, if everyone’s hunkering down right now, shouldn’t we be innovating? Thinking of new things so that when we do fire up for new business, we’re actually leapfrogging our competition?

And we’re kind of pulling ahead? Now you kind of have to be strategic about it. You have to be in a position even financially to be able to do that. I think there is something to be said about, “Hey in this time, this is where we need innovation more than ever.” You know? We’re seeing some of that. You’re exactly right that innovation comes from the bottom. How can you empower those people even during this time? How can you empower them to bring up new ideas when it’s needed the most?

Daniel Shulman: [00:38:44] 100%. And I think you’re absolutely right. And it dovetails with part of what I was talking about. Which are the engineers and the product developers and the folks that would normally spend, say, 10 to 15 hours a week in the prototyping lab, right?

Or on the prototyping line or, you know, just hands-on making things, they can’t do that. So what are you doing with those 10 to 15 hours that you will no longer have that work available to you? Well, why aren’t you telling those people, “Look, I want you to use those 10 to 15 hours or five hours or two hours or 30 minutes, whatever it is that you can’t do what you would normally be doing. So white space, pull out your lab notebook. No idea is too frivolous. No idea is stupid. Use this to white space. Build your portfolio, build a backlog of things because you can’t just sit on your hands.” So this was a perfect opportunity.

If people are smart, you really encourage your best and your brightest and your most creative to think outside the box. Spend time just doing innovation for innovation’s sake. If you are a manager of that business, telling people that that’s important and encouraging it and empowering innovation is the absolute key to building a culture of innovation.

You have to empower the innovators to innovate, right? You should be encouraging them to do that. Not bemoaning the fact that so little is getting done. Then you’re going to have to follow up. That means that once everybody gets back to work, you’re going to have to have some sort of process for getting all of those innovations together. Having a meeting, figuring out which ones you are going to pursue and prioritize. Don’t make it a wasted effort. Because if you do that, then you get back to work and you don’t act on it, you’ll totally undermine the culture that you’re trying to build.

So you have to follow up and that’s where getting your Chief IP Counsel, or if you don’t have a Chief IP Counsel, getting somebody like me involved. To help score and evaluate and prioritize some of those innovations. Do the patent searching. Make sure you can do it, all of those things, but you have to act on it.

If you don’t act on it, you’ll make things worse because you’ll have a promise that you didn’t deliver on. You’re exactly right if folks are encouraging people as they should be to spend that time that they can’t do things they would otherwise do to just innovate. When they get back to work and it doesn’t really even have to wait to get back to work.

You can periodically do check-ins. Have people submit things and send them to your Chief IP Counsels. Send them to me and we’ll do patent searching. We’ll do a preliminary assessment. You can hit the ground running with things and where is white space in the patent area.

You’re not blocked. These are good ideas. And then get to the grid. Get to the ground running, as soon as you get back to work. I think that’s a great idea and I think it’s what smart companies ought to be doing. But the follow up is really critical.

Josh Barker: [00:42:02] Awesome. Well, Dan, I really appreciate your time chatting. It’s been a lot of fun.

Daniel Shulman: [00:42:06] Yeah, absolutely. I talked about not being opportunistic and cold-hearted. I’m going to do shameless self-promotion and just repeat this is Dan Shulman at Vedder Price. If you have any needs, please feel free to give me a call. My phone number is (312) 609-7530.

And my email is dshulman@vedderprice.com. And I just want to say thank you for allowing me to participate. This was really great, and I really hope you and your loved ones and everybody who’s listening is safe and healthy and emerges from this no worse for wear, that’s my sincere hope.