Chapter 9 Managing the Research Function

Advanced Organizer

Chapter Objectives Explain product and technology life cycles Examine the nature of research Discuss the nature of creativity Describe the legal means to protect a person’s ideas

Product Life Cycle Identification of need (consumer) Product planning (marketing analysis, feasibility) Product research Product design Production Product evaluation Product use & logistic support (consumer)

Technology Life Cycle Market Volume Time Technology Development Application Launch Application Growth Mature Technology Substitution/ Obsolescence

Nature of R&D Our hope is that there will be full employment, and that the production of goods and services will serve to raise our standard of living…Surely we will not get there by standing still, merely by making the same things we made before and selling them at the same or higher prices. We will not get ahead in international trade unless we offer new and more attractive and cheaper products…There must be a stream of new scientific knowledge to turn the wheels of private and public enterprise. --Vannevar Bush, 1945

Nature of R&D Research: systematic, intensive study directed toward fuller scientific knowledge of the subject studied. Basic research is devoted to achieving a fuller knowledge or understanding of the subject under study Applied research is directed toward the practical application of knowledge Development is the systematic use of scientific knowledge directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes.

Estimated R&D expenditures and share of world total, by region: 2002 Science and Engineering Indicators 2008 1

Total R&D share of GDP 1981–2006 SOURCE: Organization for Economic Co-operation and Development, Main Science and Technology Indicators (2006). Science and Engineering Indicators 2008 1

Nondefense R&D share of GDP 1981–2006 SOURCE: Organization for Economic Co-operation and Development, Main Science and Technology Indicators (2006). Science and Engineering Indicators 2008 1

National R&D by funding sector 1953–2006

Federal R&D budget authority, by budget function: 1980–2008

National R&D by performing sector 1953–2006

National R&D expenditures, by character of work, and basic research, by performer and source of funds: 2006 1

New Product Strategies First-to-market Follow-the-leader Me-too Application engineering

Reasons for Corporate Research to Fail Not applicable Not enough patience Failure in technology transfer

Selecting R&D Projects 60 ideas 12 worthy of preliminary evaluation 6 potential products 3 prototypes 2 products for full production & marketing 1 product with market success

Initial Screening Checklist Simple payback time Net Present Worth Maximum expenditure justified Emj = Fc  Ft  P = Pcommercial success  Ptech. success  NPW

Initial Screening (Checklist) Technical factors Research direction and balance Timing of R&D and market development Stability of the potential market Position factor Market growth factors for the product Marketability and compatibility Producibility Financial factors Patentability & need for continuing defensive research

Initial Screening Process Prepare the Matrix Criteria Reference Concept Weightings Rate Concepts Scale (+ – 0) or (1–5) Compare to Reference Concept or Values Rank Concepts Sum Weighted Scores Combine and Improve Remove Bad Features Combine Good Qualities Select Best Concept May Be More than One or None Beware of Average Concepts

Things to Remember The goal of concept selection is not to Select the best concept The goal of concept selection is to Develop the best concept So remember to combine and refine the concepts to develop better ones!

CREATIVITY Nature of Creativity: Creativity is the ability to produce new and useful ideas through the combination of known principles and components in novel and non-obvious ways.

Models for problem solving: Trial and error. Planning/decision-making process (analytical reasoning) Creative process

Creative process Preparation Frustration and incubation Structure the problem Collect all available information Understand relations and effects Solve sub-problems, and Explore all possible solutions and combinations that may lead to a satisfactory solution. Frustration and incubation Inspiration or illumination Verification

Brainstorming and Other Techniques for Creativity

Brainstorming Modern method for "organized ideation" First employed in the West by Alex Osborne in 1938 The essence of brainstorming is a creative conference, ideally of 8 to 12 people meeting for less than an hour to develop a long list of 50 or more ideas. Suggestions are listed without criticism, one visible idea leads to others. At the end of this session participants are asked how the ideas could be combined or improved. Organizing, weeding, and prioritizing the ideas produced is a separate, subsequent step.

Brainstorming "Tear-down" Approach Used by two people. The first person (person A) must disagree with the existing solution to a problem and suggest another approach; Next, person B must disagree with both ideas and suggest a third; Then person A must suggest yet another solution This "cycle continues until a useful idea clicks."  "And-also" Method Person A suggests an improvement on the subject under study; person B agrees, but suggests a further improvement; this sequential improvement "continues until a sound solution is reached."

Group technique by W. J. Gordon A team explores the underlying concept of the problem. The method encourages finding unusual approaches by preventing early closure on the problem. A team of six meeting for about a day on a problem.

"Attribute listing" approach (for individuals) A person lists attributes of an idea or item, Then concentrates on one attribute at a time to make improvements in the original idea or item.

"Forced relationship" approach (for individuals) It tries to generate new ideas by creating a "forced relationship" between two or more usually unrelated ideas or items.

“Mindmapping” Write the main topic in the center. Think main factors, ideas, concepts, or components directly related to the main topic. Concentrate on the sub-headings, and identify related issues. Additional branches can be added. Repeat for all sub-headings, and sub-sub-headings. Connect related ideas and concepts. Review, organize, and revise. Write-up.

Characteristics of Creative People Self-confidence and independence. Curiosity. Approach to problems. Some personal attributes. more comfortable with things than people, have fewer close friends, and are not "joiners." have broad intellectual interests. enjoy intellectual games, practical jokes, creative writing, and are almost always attracted by complexity.

Providing a Creative Environment Creative people are most effective in an org. that will tolerate idiosyncrasies, remove as much routine regulation and reporting as feasible, provide support personnel and equipment as required, and recognize and reward successes.

Creativity and Innovation Invention (the creative process) produces ideas. the process of innovation reduced invention to practice and use.

5 kinds of people needed for technological innovation Idea generator - the creative individual Entrepreneur - the person who "carries the ball" Gatekeepers - bring in essential information Program managers - who manage without inhibiting Sponsor or Champion - the person, often in senior management, who provides financial and moral support

Protection of Ideas Patents Copyrights Trade secrets, and Trademarks and other marks

Patent An exclusive property right to an invention Issued by the Commissioner of Patents and Trademarks, U.S. Department of Commerce Limited to the "claims" of the patent

Classifications of patents Utility Design Plant

Utility Patent For a process, machine, article of manufacture, composition of material, or any improvement thereof For 20 years from date of filing Cannot be obtained on laws of nature, methods of doing business, scientific principles, or printed matters Conditions to be patentable, the invention must be new or novel, useful or have utility, and non-obvious

Design Patent On new, original, and ornamental design of an article of manufacture For a term of 14 years. Not concerned with how the article of manufacture was made and how it was constituted, but with how it looks.

Plant Patent For 20 years For plants when asexually reproduced, With the exception of tuber-propagated plants or plants found in the uncultivated state

Establishing patent rights Conception and Reduction to practice. In US, if the first to conceive makes a reasonable, diligent effort to reduce the invention to practice, he or she will receive the patent, even if someone else actually reduces it to practice earlier. In almost all other countries, patents are awarded to the first person to file, rather than the first to conceive.

Proof of Conception A written disclosure of the invention should be made as soon after conception as possible. A disclosure's primary purpose is to prove the date of conception where there is question of invention. The disclosure should include sufficient description and sketches to describe fully what has been conceived. The disclosure should be witnessed by at least two persons who fully understand its content.

Diligence to “reduce to practice” To demonstrate diligence to "reduce to practice," a written record of developmental activities should be maintained in a bound notebook. Daily entries are encouraged. Each page should be signed and witnessed in proximity to the entries on that page. Each entry should be made in chronological order. Notebook pages should be consecutively numbered, with all entries made in ink. If an error is made in an entry, it should not be erased: it should be crossed out. All entries should be made by the inventor in his/her own handwriting.

USPTO patent applications, by region/country:1985–2005

Patent Counts by Country U.S. 97125 98590 94129 82586 102267 Japan 36339 37248 37032 31834 39411 Germany 11957 12140 11367 9575 10889 U. Kingdom 4202 4037 3905 3560 4329 France 4421 4126 3686 3106 3856 Taiwan 6730 6676 7207 5993 7919 Canada 3857 3894 3781 3177 4094 S. Korea 4009 4132 4671 4591 6509 Italy 1962 2022 1946 1591 1899 Switzerland 1532 1433 1405 1106 1388 Sweden 1824 1629 1388 1189 1360 http://www.snake.ne.jp/~yama/nph-docomo.cgi/010000A/ http://www.uspto.gov/web/offices/ac/ido/oeip/taf/apat.htm#PartA2_1a

Companies with Most Patents 2008 IBM 4186 Samsung 3515 Canon 2114 Microsoft 2030 Intel 1776 Matsushita 1745 Toshiba 1609 Fujitsu 1494 Sony 1485 HP 1424 Hitachi 1313 Micron 1250 Seiko 1229 GE 912 Fujifilm 869 Ricoh 857 Infineon-G 814 LG 805 TI 757 Honda 747 Siemens-G 724 Hon Hai-T 719 Denso 708 Cisco 704 Broadcom 643 Honeywell 629 Nokia-F 608 Silverbrook-A608 Sharp 603 NEC 547

Companies with Most Patents 2007 IBM 3125 Samsung 2723 Canon 2047 Matsushita 1972 Intel 1864 Toshiba 1734 Microsoft 1662 Micron 1484 HP 1470 Sony 1454 Siemens 1432 Hitachi 1381 GE 1369 Fujitsu 1293 Seiko 1205 Infineon 847 Denso 753 TI 749 Ricoh 727 AT&T 726 LG 682 Nokia 679 Honda 677 Fujifilm 660 Sun Micro 658 Koninklijke 654 Sharp 646 Motorola 631 Honeywell 605 DuPont 601

Companies with Most Patents 2006 IBM 3651 Samsung 2453 Canon 2378 Matsushita 2273 HP 2113 Intel 1962 Sony 1810 Hitachi 1749 Toshiba 1717 Micron 1612 Fujitsu 1513 Microsoft 1463 Seiko 1205 GE 1051 Fuji Photo 918 Infineon 904 Koninklijke 901 TI 884 Siemens 857 Honda 836 Sun Micro 776 Denso 770 NEC 744 LG 695 Ricoh 695 Sharp 692 Kodak 688 Broadcom 660 Cisco 649 Bosch 648

Top 10 Companies with Patents 2004 IBM 3248 Matsushita 1934 Canon 1805 HP 1775 Micron 1760 Samsung 1604 Intel 1601 Hitachi 1514 Toshiba 1310 Sony 1305 2005 IBM 2941 Canon 1828 HP 1797 Matsushita 1688 Samsung 1641 Micron 1561 Intel 1549 Hitachi 1271 Toshiba 1258 Fujitsu 1154 2006 IBM 3651 Samsung 2453 Canon 2378 Matsushita 2273 HP 2113 Intel 1962 Sony 1810 Hitachi 1749 Toshiba 1717 Micron 1612

Top 10 Companies with Patents 2001 IBM 3411 NEC 1953 Canon 1877 Micron 1643 Samsung 1450 Matsushita 1440 Sony 1363 Hitachi 1271 Mitsubishi 1184 Fujitsu 1166 2002 IBM 3288 Canon 1893 Micron 1833 NEC 1821 Hitachi 1602 Matsushita 1544 Sony 1434 GE 1416 HP 1385 Mitsubishi 1373 2003 IBM 3415 Canon 1992 Hitachi 1893 Matsushita 1786 HP 1759 Micron 1707 Intel 1592 Koninklijke 1353 Samsung 1313 Sony 1311

The Patent Scorecard™ 2008 – Universities Univ. of California MIT Cal. Tech Stanford Rice Univ. of Texas New York University University of Central Florida Univ. of Wisconsin Harvard http://www.iptoday.com/articles/2008-9-oldach2.asp

Trademarks and Other Marks Service marks Certification marks Collective marks

Trademarks A trademark is "used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others." The trademark is protected by federal statutes and registered with the Patent and Trademark Office. "" or the notice "Reg. U.S. Pat. and TM Off." should be used with registered trademarks and "" or "Trademark" with non-registered marks.

Service Marks A service mark is associated with services rather than goods. Certification marks A certification mark indicates that the marked goods or services meet standards or services established by the mark's owner, for example, Underwriters Laboratories, Good Housekeeping. Collective marks A collective mark identifies members of a group such as an organization, union, or association, for example, "CPA", used to indicate members of the Society of Certified Public Accountants

Registration of Marks Starting 11/16/1989, application for mark can be made before any use has taken place. Most states have their own trademark law, in addition to the federal law.

Copyrights Copyright is a bundle of rights to reproduce, derive, distribute, perform, & display an original creative work. A copyright protects expressions, not ideas. A potentially patentable idea expressed in a copyrighted text may be used by others. A copyright is a grant, by the United States, to an author for the right to exclude others (for a limited time) from reproducing his/her work. A copyright is owned by the individual author except in the case of a “work for hire”, whereby the employer owns the copyright (17 USC 201a-b)

Types of Copyrights Literary works Musical works Dramatic works Choreographic works Pictorial works Motion Pictures/Videos Sound Recordings

Copyrights A copyright generally prevents reproduction of a copyrighted work for the life of the author, plus 70 years. “Work for hire” copyright lasts for 120 years from the date of creation, or 95 years from first publication.

Copyrights For works created after 1989, copyright notices are not necessary (although they are recommended). The copyright notice has three elements: (1) the copyright symbol , the word "copyright," or the abbreviation "copr."; (2) the year of first publication; and (3) the name of the copyright owner. A copyright notice can appear any place in or on the work as long as it can be readily seen. Copyright registration is not a condition for protection but is a prerequisite for an infringement suit. Copyrighted material is registered with the copyright office at the Library of Congress.

Trade Secrets Trade secrets have no precise definition, but to be protected by the courts, they must be secret, substantial, and valuable. The secret can be almost anything as long as it is not generally known in the trade or industry to which it applies. A trade secret provides its owner with a competitive advantage. It may be a formula, process, know-how, specifications, pricing information, customer lists, supply sources, merchandising methods, or other business information. It may or may not be protected by other means. Trade secrets have no time limitations.

Comparison of Means of Protecting Ideas Many ideas that are protected as trade secrets cannot be patented. On the other hand, an item that is patentable can theoretically be protected as a trade secret. If the idea can be easily discovered through reverse engineering, however, a patent is the only practical choice for protection.

R&D and Business Strategy Technology strategy should encompass research, product and process development, and manufacturing engineering. Base Technologies Key Technologies Pacing Technologies

Evaluating R&D Effectiveness Ratio of research costs to profits. Percentage of total earnings due to new products. Share of market due to new products Research costs related to increases in sales. Research costs ratio of new and old sales. Research costs per employee.

Evaluating R&D Effectiveness Ratio of research costs to overhead expenses such as administrative and selling costs. Cash flows (continuing evaluation of the pattern of outflows for research expense and actual and projected inflows from resulting revenue). Research audits Weighted averages of costs and objectives Project profiles

Support for R&D Technician support to carry out repetitive testing and other functions not requiring a graduate engineer or scientist. Shop support of mechanics, glassblowers, and carpenters to produce test and research equipment based on researchers' sketches. A technical library with technical information specialists conversant in the fields of the company's interest and willing and able to suggest sources to researchers and structure and run searches in the appropriate data bases for them.

Support for R&D Technical publication support, including typing, editing, and graphical support to simplify researchers' production of reports, technical papers, and presentations.  A flexible, responsive system for approving and acquiring equipment as needed by researchers.  Ample computer facilities conveniently available to researchers, and programming assistance to provide consultation and programming to those researchers not wishing to do it themselves.