Publications

Version: 1.0 Approved

LDO-ID 2021-05-14-01

Title Leonardo’s IP Evolution (From a “Sword and Shield” Posture to a Mature IP rights Management Approach for Coping with the new Competitive Landscape in the Aerospace & Defence Industry)

Abstract

The Aerospace & Defence (A&D) industry is unique. Governments are often the only end-customers and defence products must normally be sold to a company’s parent government, which dictates whether and where products can be exported and under which restrictions. This is because export customers want operationally relevant and proven capabilities, with full confidence in the associated doctrine, training, and support services throughout the life cycle of the products. Hence, successful A&D product development depends on having a deep, trusted partnership between parent government, customer, and industry. This allows the customer (e.g. Ministries of Defence or international agencies and organizations) to reveal important operational know-how (in terms of technical parameters and constraints) to their industrial partners. They, in turn, can capitalise on acquired know-how and technology, built up through previous developments, research, and operational experience, in order to maximise existing product improvements and new product designs. This accumulated know-how and technology can be referred to as “background” intellectual property (IP) assets that defence companies must build up and deploy in their management activities. Conversely, “foreground” IP is intended as the output from a specific research or development investment. Irrespective of who funds a specific activity, or when a procurement contract is in place, industry invariably contributes significant value to the foreground IP, which then feeds back into the base technology as background IP, forming the basis for subsequent R&D activities. Hence, IP is the industry’s lifeblood, which A&D companies traditionally used in order to fence through tight legal protections, including strict contractual terms, confidentiality requirements, extensive use of trade secrets, and other means to help prevent misuse/disclosures. In fact, A&D technologies are often too competition sensitive to be patented and published in the usual (commercial) way and, for this reason, A&D companies are usually more concerned than other sectors with ensuring IP assets are contractually watertight and free from any risk of involuntary disclosure. Additionally, as national security constraints and export controls are rigorously applied by parent governments, this circumstance engenders the proliferation of A&D technologies that also limit the ability of opponents to detect the real state of the art and range of use of the technological equipment possessed by governmental armed forces. Within this scenario, for many years, A&D companies have considered IP to be a legal asset only, under the aegis of their Chief Legal Officer or General Counsel, whose duty was to defend existing rights rather than supporting the development or acquisition of new ones. However, in the last decade, A&D corporate leaders have faced significant changes in the global business ecosystem, including revolutionary developments in legal, judicial, economic and organizational domains, which have all affected the management of IP assets. Technologies and markets are converging more now than ever compared to the past, when companies minimized risk by owning or otherwise controlling the technologies needed to maintain their competitive advantages. Today, also the A&D world is shifting away from an industrial economy to a knowledge economy, intellectual property is increasingly becoming the coin of the realm for global competitiveness. But the big- Aerospace & Defence industry undergoing changes 4 gest changes are coming in terms of how business leaders think about IP in a strategic way, when the old captive markets are becoming more open. As a consequence, in the new competitive arena of A&D, IP assets can no longer be confined to a legal backwater. Rather, they should be seen as key drivers of new business lines and new streams of revenue, as the engine room of businesses growth and leaps forward and, finally, as creative tools to build new connections with customers, business partners and other stakeholders. How Leonardo, strong through its history of success, would be able to succeed in this new competitive landscape was the main issue for the company’s top management at the dawn of the 2018-2022 Industrial Plan. And this was the beginning of the IP evolution that began unfolding in the years that followed, up to today.

Authors Leone Maria Isabella, Rogo Francesco

Type Paper for Specialistic Magazine

Media Portale Luiss University Press (https://luissuniversitypress.it)

Web site

https://luissuniversitypress.it/wp-content/uploads/2021/03/Luiss-Business-Cases_Leone_Rogo_2021.pdf

Anno 2021