Four IP Virtuosos

Bill Coughlin: The Fortune 50 Entrepreneur: What Lawyers Can Do to Support Innovation

Janet A. Marvel

©2016. Published in Landslide, Vol. 8, No. , March/April 2016, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

William J. Coughlin is the president and chief executive officer of Ford Global Technologies, LLC, a wholly owned subsidiary of Ford Motor Company. He is responsible for all intellectual property matters worldwide for Ford and its subsidiaries. Bill is also a member of the board of directors for the Intellectual Property Owners Association and an adjunct professor at Thomas M. Cooley Law School, where he teaches graduate level courses including trade secret law and e-commerce law. In 2013, Bill received the Entrepreneur of the Year award from Automation Alley, a Michigan-based technology business association. He was a finalist for the Crain’s Detroit Business General and In-House Counsel Awards in the Pro Bono category.

Here, Bill shares with Landslide some ideas on how lawyers can and should foster the entrepreneurial spirit inherent in every business.

What is your view on the value to large companies of supporting entrepreneurship? What advice do you have for other companies and law firms regarding how and whether to do the same?

Right. Well, you know, supporting entrepreneurship has two impacts that are beneficial to companies and law firms. The first of which may not be immediately obvious, but different employees have different skills, and there are going to be some employees who are entrepreneurial by nature. And, how are you going to attract and leverage those talents unless you’ve created an environment that is welcoming and supportive of that type of employee? And secondly, if you’ve got entrepreneurs on the inside or working with entrepreneurs on the outside, you’re finding new ways to expand your business or create new spinoffs for your existing business. Either way, you are going to be connecting to a different ecosystem than you are currently working with. And that is a vital part of any company’s future. For law firms, their future is not simply servicing the needs of current clients or customers, but to find new ones and grow the business. And so being entrepreneurial is essential.

You may not think that big companies need entrepreneurs, but even the biggest of companies needs to reach out and network with entrepreneurs and hopefully develop the kind of entrepreneurial spirit within the company to help it grow and evolve. For example, at Ford we are adding what we call a smart mobility business to our core car and truck business. This is new to us. So it needs an entrepreneurial spirit to begin a new phase of business and grow it.

Can you explain a little more what you mean by smart mobility?

Smart mobility is, in essence, how to help people get from one location to another fast, efficiently in terms of costs, safe, and with a terrific customer experience. Obviously, we’d like people to get into Ford cars or pickups and drive to their destinations, but there are going to be people for whom that’s really not the best option, or for whom that’s a partial option. So, how can Ford help them in that respect? So we will be getting into car sharing and other service-related aspects of being able to help customers move as they need to, particularly in congested urban environments.

Think about Ford as a company that wants to help people move. We are audacious enough to have in our heads a vision that we want to change how the world moves—again. Ford has done it before, and we want to do it again. And you’ve got to have that entrepreneurial spirit within the company to be able to deliver that vision.

I thought you were going to tell me something about self-driving cars.

Ah. We just announced that Ford is the first company to have autonomous vehicles operating in Mcity, which is a small city environment built in Ann Arbor. It’s not a real city, but it’s got street lights and buildings so you can test autonomous vehicles in a city environment.

As you know, there has been a trend toward interconnectivity of devices dubbed the “Internet of Things.” Can you tell us your view on how the Internet of Things will impact auto manufacturers, and vice versa?

Well, yes. I’m hip deep here at the company. I’ll give you an example. We sponsored a mobility experiment for creating an electrically assisted bicycle that is connected to the Internet. So this will be a new “Internet of Things” device for us in particular. This illustrates what a difference an in-house IP group can make. In this case, I was sitting in a brainstorming session in London for the Mobility Team and it dawned on me that we’re going to need to know how to work with the electrically assisted bike world, which for short I’ll call e-bikes. So, I got permission to run an innovation contest to create a better e-bike. The results were outstanding. We had about 130 serious submissions. I mean animations, and videos, and detailed engineering drawings. It really caught the imagination of Ford employees. We decided to build the three winning bikes. We introduced the first one at Mobile World Congress in Barcelona this spring. There were almost 2,000 exhibitors and literally thousands upon thousands of new product gadgets, and Ford took away the award for best product gadget at that event. And our latest e-bike that we showed a couple of months ago was just highlighted by Top Gear as one of the 56 most mind-blowing things on earth. So not too bad for something sponsored and thought up by an intellectual property team, right? And a lot of fun as you can imagine too.

These bikes, I think, clearly will be connected to the Internet. You’re going to be able to detect potholes, for example, and that information can be relayed so the other bikers will know to avoid that particular area. So there’re lots and lots of new possibilities—not just with respect to cars being connected to the Internet—which they clearly are doing. I don’t think we’ve imagined even how extensive that’s going to be. So, for example, I’m pretty sure within the next five years my car will be connected to my refrigerator. Now I don’t know why that’s going to happen, but I’m almost certain that it will.

I think it opens up a lot of new potential for solving consumer problems and providing greater value than ever before. One of the functions, in my view, of an IP team, whether it’s internal or external to a client, is to encourage that kind of activity so that you’re not the people who say no. It’s how we can help you create the future that everybody needs.

One of the entities you have supported is Techstars. Would you please explain what Techstars is and why you value it?

Ford is a key sponsor of Techstars Mobility. It’s one of the things we do to try to support startup technology businesses. It’s an accelerator in Detroit solely focused on mobility technologies and companies. Ford helped bring Techstars to Detroit, and we provided mentors, right up through Bill Ford, to the startups that were in the first class. We got a couple of pilot projects going. You have to try to foster not just the relationship but a way to test the startup’s solution. We’re trying to connect startups to VCs—the venture capitalists—and to other mentors and other companies in the automotive ecosystem that can take a little startup concept and really make it grow. I think that startups really have the best chance to thrive if they’re working in a networking environment, rather than working on their own and pitching to one company or another. We’re working on giving startups a lot of different voices that are providing advice and enabling them to, for example, create a pilot project with a company that they might not have thought was possible.

Is Techstars strictly a Ford initiative?

No. Interestingly enough, Techstars is probably the largest accelerator operation on the planet. But we were the first ones with multiple companies in sponsorship. Techstars has accelerators with individual companies, but I didn’t want to do it that way. I thought it would be better to develop our industry by having the industry participate. And we did. We even got sponsors who came along outside of our industry, such as McDonald’s. You might not think of McDonald’s as a mobility company, but they are. A lot of their business is drive-up vehicles.

You also support TechShop. What is TechShop, and why do you support it?

I think that intellectual property lawyers are really well positioned to help their manufacturing clients in particular to key in to that startup ecosystem, connect to the entrepreneurs out there, and foster ways of getting more innovation in the company. That is one of the reasons why Ford fostered a relationship with TechShop. TechShop is a Silicon Valley business modeled like a gymnasium. Except that for your gym membership, you’re not using exercising equipment, you’re using prototyping equipment. So you can use all of the prototyping equipment in the facility—and it’s nearly $1 million worth of prototyping equipment—for the cost of your membership. But you have to get a two-hour training course for each individual machine. Which is a good thing. This enables us to encourage Ford employees to use TechShop and to maybe speed up their prototyping process.

We added to our patent incentive work program a three-month free membership to TechShop, plus the money for the courses, just for submitting an invention disclosure. Since we’ve started this, our invention disclosures have gone up quite a bit. They’ve more than doubled. I wouldn’t say just all because of TechShop because there are other components to our program that we’ve enhanced. But it was a clear signal to Ford employees that you don’t just submit an idea solely on the basis of what’s in your head. You can actually build it. Ford wants you to prototype it. And so that shows that we want to foster innovation in the company. And it’s worked wonders.

Often Ford engineers will go in and make one part of the device or system that they’re working on at TechShop. But above and beyond that, it reinforces that they can be innovative outside of the company. So they can learn new skills at TechShop and kind of spread their wings in terms of what they’re able to build—the different kinds of things and different techniques for doing things. You may have never welded anything before or injection molded something before. They can teach you all of that. If you want to cut through five inches of thick steel with water, they can teach you how to do that too.

Ford participates in AutoHarvest. Will you explain what AutoHarvest is and the idea behind it? Why is this important to you?

That has to do with, I think, solving an unmet need that will help the intellectual property community. If you are an owner of a patent or set of patents, for example, and you think that maybe you’re not in the best position to implement those, what do you do? You can potentially license to somebody, but how are you going to go about that? Or if you were to sell them, who would you sell them to? There are patent enforcement entities that might love to buy your patents for a song and then assert them against companies that really aren’t infringing, but it takes a lot of time and money to prove it. And so it’s a big waste of effort. AutoHarvest is a really good marketplace for automotive technology licensors to find licensees, and there’s enough transparency for it to work. So, AutoHarvest is an online marketplace to help encourage licensing by automakers, by the supply community, or by universities and inventors. We provide an effective alternative to selling patents to an entity that some would call a patent troll.

There’s a New York Stock Exchange and other exchanges out there. The question with AutoHarvest is whether we can create an exchange-like environment that encourages a company to license its technology. And Ford is pretty open about trying to license out technology. So we’re trying to create that kind of environment within the auto community because we think that customers are the ones who are going to benefit from this. If we can license somebody’s technology at a reasonable cost for us, and we can put it into our vehicles, and customers love it, everybody wins. We need to have more companies think like that and act like it. So that’s what AutoHarvest is about. It’s an effective alternative to going to the Dark Side.

What do you see happening in the next five years in IP law? What would you like to see?

I would like to see the formulation for patent infringement damages be improved. In my humble view, there’s too much ambiguity and flexibility. It enables patent owners, particularly patent assertion entities, to ask for outrageous amounts of money that bear no real relationship to economic reality. And that’s a problem. Because for almost any product that comes on the market today, somebody’s going to say it’s not just covered by one patent, it’s multiple entities and people all saying that the product is infringing. A good company doesn’t want to infringe anybody’s patents, but we don’t want to be abused in the process and end up having to charge our customers more money unnecessarily. Let’s say a patent assertion entity came to us and said, “You may not realize it but your company is infringing on this particular patent.” If they were actually reasonable about the amount of money that they can and should ask for, we could make deals. And we have. When people are reasonable with us, we make the right deal. It’s the folks who want to buy private islands and see themselves as possessing the equivalent of “my precious” that are the problem. Unfortunately the law allows for them to come up with these wacky economic bases. Under the Georgia Pacific test, which is now over 40 years old, there are too many factors and there’s no out of bounds for any of that stuff. In the next five years, I would like to see more certain, more rational, more reasonable boundary lines for what people can ask for in patent damages.

Any idea what that would look like?

I think that it’s something that needs to get into the public debate. I don’t want to hurt the patent system at all. I love the patent system. I think it’s given freedom and prosperity in a way that couldn’t have been possible without it. And I don’t want to come up with some boundaries that actually prevent that future prosperity from happening.

Anything else for our readers?

Well, the only thing I’d just reinforce is that when you think about all the things we talked about—with e-bikes and TechShop and Techstars and AutoHarvest and things like this—all of that’s coming from an in-house intellectual property team. So it gives you a sense of how lawyers can really master their profession and have careers that really enrich their clients or their companies. And it’s not simply just sitting in your office and waiting for the phone to ring. You can actually do a lot of different things in intellectual property that can make a world of difference to those whom you’re serving.

Janet A. Marvel

Janet A. Marvel is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP.