Historically intellectual property strategists have tended to divide the world into two broad camps with the “hard rights” (such as patents, trademarks and copyrights in code) sitting somewhat aside from “soft rights”, such as know how, branding and distribution, and copyright in designs and product concepts. However, the combination of such hard and soft rights can often produce outcomes where the whole is worth far more than the sum of its parts.
To see this in action we should reach back to the recent past and look at Google Glass, which although not a success (Alphabet has temporarily shelved the project) does demonstrate a sophisticated approach to the combination of hard and soft intellectual property rights.
Before the launch of Google Glass, Alphabet had already come up against objections over everything from privacy issues to how Glass looked. In steps to allay the backlash and having already released responses to the top 10 Google Glass myths, Alphabet announced on March 24th, 2014 that they had formed a strategic partnership with Luxottica “to design, develop and distribute a new breed of eyewear for Glass” to be released in 2015.
Many will not have heard of Luxottica. The Italian corporation is responsible for many of the world’s high-end sunglass brands, including Oakley and Ray-Bans, which have been included in the deal with Alphabet. Through more than 50 years in the market, they have become one of the leaders in the sunglass business and with that they bring significant soft intellectual property in terms of the content design around sunglasses through to their branding and distribution channels.
Alphabet, on the other hand, brought all the hard technological rights around the Google Glass concept itself. From a stylistic point of view though, as a consumer would you rather wear Google Glass or a pair of Ray-Bans? You don’t have to be Kim Kardashian to answer Ray-Bans and it is this point that Alphabet successfully picked up on.
Alphabet’s strategy is analogous to the Tesla electric car story. Electric cars have been on the general market for a decade now but only recently have they caught the eye of the true car aficionados. Why, because people didn’t want to drive a Jetsons-esque bubble car and for many, the technology alone wasn’t enough to make them buy – even if it was good for the planet. Conversely, people are willing to consider an electric car if it looks and behaves like something akin to a sports car. Tesla brought together the hard rights of the electric car technology with the soft design rights of much-loved sports cars, bringing a significantly more desirable offering to market than was previously available.
Alphabet hopes to do the same in their venture with Luxottica. Complementing this, in order to distance Glass technology from the realms of tech-geeks even earlier than 2015, Alphabet also linked up with one of the matriarchs of global fashion, Diane von Furstenberg, for the ‘DVS Made for Glass’ collection. Here Alphabet was essentially piggy-backing the strong high-end fashion brand equity held in Diane von Furstenberg, Oakley and Ray-Bans (the soft rights of the form) to take its Google Glass technology (the hard rights of the function) out of the world of tech geeks and make it mainstream.
The truth this highlights should be obvious but often isn’t, especially to technology companies: how things look is really important, not just the function. Image matters. These are both classic examples of bringing hard technology rights together with soft design rights with the sum of the parts being greater than the whole.
Coming back to the Google Glass – Luxottica deal. One could argue that all this soft brand power was not enough to save Google Glass and to a certain extent this is correct. However two points are worth considering. First, it seems unlikely that eye-centric technology based around Glasses is dead forever. Apple is busy reinventing the watch and it seems only a matter of time before Alphabet’s ever searching eye returns to that other great fashion and functional accessory: glasses. Second, when it does there is little doubt that mass market adoption is unlikely to occur if the new Google Glass looks like the old Google Glass – the brand intelligence of the likes of Luxotica (or others) will be sorely needed.
We’ve spoken about Alphabet a lot but what about Luxottica? The Glass deal expanded their target market from pure fashion to functionality, having dabbled here previously with MP3 and HUD devices. If Google Glass relaunches they are well positioned to among the first to market with a Glass offering, providing them the opportunity to establish themselves as market leaders in the new field. Luxottica would be well positioned to develop an intellectual property portfolio (whether registered or not) relating to the innovations around getting Google Glass to look good – or at least good enough! It also begs the question of whether Luxottica could become an acquisition target for those outside fashion sunglasses markets?
In summary, technology rights alone are often insufficient to develop a mainstream consumer market upon – design rights and eventually branding are required to take innovation to the next level. This can either be done by hard slog – building your form from the function up, or by partnering with a player who has an established brand (form) upon which you can leverage your function.