Canadian Lawyer InHouse

SEPTEMBER 2017 20 INHOUSE ROBIN KUNISKI Y ou may not know the name, but chances are you've encountered a plas- tic bottle or other product made by a Husky Injection Molding system. Husky Injection Molding Systems Ltd. is a supplier of injection molding equipment and services to the plastics industry. Husky equipment is used to manufacture a broad range of plastic products such as bottles and caps for beverages, food containers, medical components and consumer electronic parts. The company's head office and primary manufacturing facility is tucked up in an unassuming campus north of Toronto in Bolton, Ont. It was founded in the early 1950s and today the business spans 4,000 employees in 30 countries, with custom - ers and competitors in 100 countries. This creates a complex array of legal matters for Husky, particularly in the area of intellec- tual property. Husky's in-house IP legal team, led by general counsel Michael McKendry, and di- rector of legal and IP Rick Musgrave, have been working to optimize the management of the company's rapidly growing IP assets and aligning them with the company's business interests on a global scale, all with improved prediction of associated costs in mind. Given the number of patent applications the company files per year, a major legal cost for the company has been patent procure - ment, so the legal team sought a systematic approach to identifying the company's most important technology. In doing so, they developed the follow- ing tools: • Innovation scorecard for the patent review committee (representatives from the en- gineering, marketing and IP legal depart- ments) to use in determining whether to pursue patent protection for new innova- tions and the scope of protection needed. • Patent filing strategy tool with weighted scores for innovation attributes such as customer wants, cost reduction, revenue generation and breadth of exclusivity. • Annual patent review system to prune pat - ents and patent applications with reduced business and/or technical importance through asset sale or abandonment — sig- nificantly reducing strain on the budget. RISK MANAGEMENT Husky's legal team is tasked with clearing the considerable number of new products developed annually by the company and planned for the marketplace. To avoid the possibility of infringing on a competitor's patent, opinions were sought from outside counsel on all new products and at consider - able cost. To improve the process, Husky's legal team sought to quantify risk associated with each new product. In doing so, they developed the following: • Opinion tool to determine when to en - gage outside counsel. The product life cycle, design-around options and available litigation defences are evaluated to gauge the risks associated with a competitor's patent. Products are then categorized as low, medium or high risk. Low-risk prod - ucts receive internal legal opinions. • Risk assessment tool for higher-risk prod- ucts. After outside counsel provides an opinion on a product's risk of liability, the opinion's findings are analyzed and risk fac- tors allocated based on product attributes and business forecasts. This enables Husky to weigh the risks and benefits utilizing a quantified set of criteria and make business decisions based on a fact-driven analysis. The above strategies have been phased in and are yielding annual dollar savings in the "high six figures" with better-quantified risk and reward. The tools created have produced annual patent procurement cost reductions of more than 15 per cent, and in risk management, the tools created have yielded year-over-year cost reduction for outside opinions of 10 per cent. Reducing cost and improved budget fore - casting have positive impact for the entire corporation. Beyond that, there was a tan- gible benefit to other departments. "Over the last 10 years, Husky built a vast patent portfolio that protected our core products and looked forward to protect po- tential future products. "The number of patents directed to po- tential products outweighed the number of patents directed to current products by almost four to one — costing Husky sig- nificant sums to prosecute and maintain speculative patents. With the new process in place, we were able to free money from our budget and protect the products that mattered most. This allows me to gain a competitive foothold without straining our budget," said John Knapp, product develop - ment manager at Husky. The ultimate outcome is a more focused IP asset group. IH Protecting IP and reducing costs on a global scale By Jennifer Brown Category: Law Department Management Department size: Small Company: Husky Injection Molding Systems (left to right) Sandra Hackenberg, Michael McKendry, Daniela Chieffallo, John Boadway, Julian Powell, Jennifer Ko, Brenda Hutchinson and Geoffrey Gow. Missing Helene Corbellari (Europe), Cathy Garcia (Europe), Carolyn Jenko (U.S.), Rick Musgrave (U.S.) and Shi Hao Shang (Asia).

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