How legal teams are integral to business success
In a very unassuming building in Burnaby, British Columbia (B.C.), she goes to work each day knowing she is helping secure deals for its bleeding-edge developments. What’s interesting about Rothe and the three other in-house counsel profiled in this article is just how much they have become conduits to innovation, both inside and outside their companies.
Whether advising start-up organizations, using innovative approaches to protect intellectual property or copyright, addressing counterfeit production issues or supporting digital enterprise for customers, all share a passion for enabling their businesses to succeed and grow. And they do it as an integral part of the business, rather than a siloed function.
On the front lines of brand protection
Katie Jamieson is the only lawyer at Herschel Supply Co., a Vancouver-based global accessories brand, and is the company’s first general counsel. She oversees global expansion initiatives including corporate development, M&A and investment opportunities as well as protection of the company’s trademarks and intellectual property.
“Any counterfeit or trademark infringement is a huge problem for us and in fact all brands around the world,” says Jamieson. “Grey-market goods are a problem for us given our international distribution structure. Products are purchased from us directly through our wholesale channel but are then sold down the line without our knowledge and consent to unauthorized retailers. That means our products are ending up in places they are not supposed to be such as discount stores, and that really devalues our brand. We take that really seriously.”
Finding grey marketers has changed rapidly in the last few years. Ten years ago, a company could confront a grey marketer at a bricks-and-mortar store and deal with it. But the Internet has changed the game dramatically, making it easy for unauthorized sellers and counterfeiters to sell knockoffs.
“They can sell a lot more product … than before and pass on the cost savings to consumers,” she says.
Jamieson has been challenged by her management team to find brand protection solutions outside the traditional legal model.
With the online proliferation of grey marketers, chasing them down can feel like a game of Whac-A-Mole.
With an intellectual property portfolio in 70 different countries, the grey-market and counterfeiting rules for Herschel are different in each country. Herschel uses a third-party service provider called NetNames to monitor online marketplaces and social media sites looking for specific trademark searches and logos. Their tools locate unauthorized product sales all over the world in online marketplaces such as Amazon® and eBay, and Chinese marketplaces such as Taobao. It then provides people who are dedicated to the brand to go through the enforcement and takedown process.
“Being the only lawyer here, for me to try and do that would be impossible to stay on top of it all. In the first six months alone, they took down 20 million units of unauthorized Herschel merchandise. If we did a rough translation, it was over $620 million worth of counterfeit, grey-market and fake products from the Internet,” says Jamieson. “That gives you an idea of the size and scope of the problem we are facing.”
Protecting innovation in-house
When Tanya Rothe joined D-Wave Systems 11 years ago, she was advised to keep a low profile and focus on managing the patent work for the start-up company based in Burnaby, B.C. But after a year, she was named general counsel. Over the years, in a culture of high tech thinkers, Rothe has demonstrated her ability to cut through the complicated and translate it into value through the big deals the company has completed.
D-Wave is the only company in the world that has made and sold quantum computers commercially. Its customers include global-aerospace-company Lockheed Martin, Google®, NASA and the Los Alamos National Lab. The company’s computers harness quantum physics to perform calculations not possible on regular (classical) computers.
As Rothe explains, important problems are getting too big for regular computers. Designer drugs and machine learning require a higher level of computer power. At the same time, classical computers are starting to reach their limits.
“Over time, what I’ve tried to do is become an ombudsperson as opposed to being a lawyer. The approach I try to take is to not be the department of ‘no.’ I consider how I can make a person’s job easier and figure out if there are creative alternatives. I try to not be so much a lawyer and recognize it’s a business decision being made,” she says.
Where she brings added value now is helping to identify and protect the company’s intellectual property before the inventors even think it is important to do so.
“With my team being part of the business, we don’t wait for invention disclosures to be submitted and then send them to outside counsel to file the patents. My team is responsible for trying to get people to submit invention disclosures but also for anticipating what is inventive about a project and helping to educate the technical team,” she says. “They are super smart people and they don’t think they’ve done anything particularly inventive, but what happens is our team will say, ‘Hey, John, that’s a great invention,’ or ‘Amanda, have you thought of writing that up?’ ”
Advising future innovators
The in-house legal team at Janssen Inc., a Johnson & Johnson pharmaceutical company, is getting an injection of entrepreneurial spirit these days as it supports a J&J innovation project, JLABS, an incubator to support entrepreneurs.
JLABS came into existence in 2012 and the Toronto location opened last year. Maurizio Romano, director of law at Janssen Inc., is playing a key role in helping startups currently using JLABS to find their way in the innovation space. Romano and the legal team based in Canada support the Canadian business, but they are also part of the larger Johnson & Johnson global law department.
“Johnson & Johnson doesn’t receive any shares in the companies it works with and these companies are free to enter into deals with competitors of Johnson & Johnson,” Romano says. “That’s unique – typically with incubators the price of admission is that a percentage of equity in the company is offered or there is a royalty involved. With JLABS there are no strings attached.”
One of the things JLABS has done a lot of is quick-fire challenges – basically a Dragons’ Den-like challenge where people can submit their ideas and (if selected) are given lab space at JLABS for free.
“We just did one called World Without Disease – a global challenge – and the winner could receive a cash award and/or a choice of lab space at any JLABS location,” he explains. Romano says Janssen’s involvement is a reflection that companies realize not all innovation can occur under their own roof. “There are a lot of extremely bright people coming out of university, and entrepreneurs attack things differently and solve problems differently. The idea of providing an incubator is that you create the opportunity and see what takes hold.”
“It’s been an opportunity to learn more about companies in the industry and get out of our comfort zone,” he says. “One thing about going in-house is you tend to just support your business and you don’t have that outward facing role external counsel typically has, so this is an attempt to bring that back into our own in-house practice – to get lawyers to think like entrepreneurs.”
Legal as a conduit to the deal
Many general counsel will tell you they are moving closer to the front lines of business all the time. Once part of a legal department set off from the rest of operations, they are now often seen as key players in actively assisting in propelling business forward day to day.
Matthew Snell has seen that happen, especially in the last few years as IBM’s business moves toward a more agile economy where clients need faster response times in order to stay competitive. As general counsel and secretary for IBM® Canada, Snell is part of an integrated global team at the IT giant with a team of 27 in Canada.
“We definitely see ourselves as part of the customer facing team,” he says. “We’re closer to the sales team – we need to make sure the operational needs are met as we go into the marketplace.”
“Our role has evolved now to be a little closer to the business and to the solution elements because we’re moving through this transformation into the cognitive and cloud platform space,” says Snell.
IBM is now focused on key areas that include strategic initiatives around the cloud, data analytics, mobile, social and security – all focused on enabling the digital enterprise and what clients want in these areas.
“We are very focused on the continuing evolution of our cloud platform position – the whole cloud model is key to our transformation, and the other is more unique to Canada in that we’ve been very active in creating innovation hubs across the country, which are designed to support the core innovation in our company or with partners and/or our clients,” says Snell.
“You really want these cloud, cognitive transactions to move forward very efficiently. You don’t want the contracting or the mechanisms around the contracting to be on the critical path because the adoption rate of cloud is accelerating. The nimble clients and businesses who can take advantage of it are getting real commercial competitive advantage,” says Snell. “Nobody wants to slow it down and so it’s all hands on deck to keep things moving. Eventually you’re very efficient with the transactions.”
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How does your in-house counsel drive innovation for your business? Let us know in the comments below.