Husky Injection Molding Systems
Using decision tools to calibrate investment in IP assets
As custodians of the IP assets of a company that makes equipment used to manufacture products ranging from water bottles to consumer electric parts to medical devices, the legal team at Husky Injection Molding Systems has developed smart tools and systems to derive strong value from its IP portfolio. Employing approximately 4,000 people, Husky conducts business in 100 countries and is supported by a 13-person legal team spread around the globe, including in Ontario, Vermont, Shanghai, and Luxembourg.
The legal department has been focused on increasing shareholder value for the past 10 years, says Rick Musgrave, Global Director of Legal and Intellectual Property. The journey began at the direction of Michael McKendry, VP Corporate Services & General Counsel, who wanted to optimize the management of rapidly growing IP assets and align them with the company’s business interests.
“We wanted greater consistency, so we asked our stakeholders to consider all of the same factors, calibrate risk and reward, and make the decision-making process less subjective,” says Musgrave.
To prioritize IP costs and bring them under control, McKendry tasked Husky’s legal team with implementing a systematic approach to identifying and quantifying the company’s most important technology and products. The team developed a number of tools:
The tools were created totally in-house by cross-functional teams with representatives from engineering, marketing, and the executive level; the legal team “quarterbacked the development and implementation of these tools,” says Musgrave. McKendry labeled the toolbox Husky’s Holistic Legal Strategy.
McKendry asked the legal team to quantify risk associated with each new product. The legal team created the Risk Assessment Tool to help analyze the findings of legal opinions and allocates risk factors. “This enables Husky to weigh the risks and benefits utilizing a quantified set of criteria, and make business decisions based on a cost-conscious, fact-driven analysis,” says Musgrave.
Previously, legal opinions were sought from outside counsel on all new products—at considerable cost. To reduce this cost, Husky’s legal team created the Opinion Tool to determine whether to use inside counsel or engage outside counsel for an opinion. Use of this tool resulted in a cost savings of $150,000 in 2015.
“Our legal spend had been reactive and hard to predict. There were many variables that drove costs, and previously we had missed estimated spend by as much as 20 percent; so Michael asked us to create a tool that would better predict our legal spend and allow us to be proactive in budget management,” says Musgrave.
The entire Husky Holistic Legal Strategy was fully engaged by 2014, and Husky’s results have been impressive: a 15 percent reduction in annual patent procurement costs, a 10 percent year-over-year cost reduction for outside opinions, and budget predictability to within 1.5 percent. Other benefits may be less quantifiable but are no less important: For example, along with reduced costs comes the assurance that resources are allocated to the intellectual property that is aligned with Husky’s business objectives. Other benefits include internal stakeholder satisfaction and improved working relationships. A product development manager noted, “With the new process in place, we were able to free money from our budget and protect the products that matter most. This allows me to gain a competitive foothold without straining our budget.”
The law firm of Wolf Greenfield performed a full audit of all the revamped processes, confirming that Husky has a state-of-the-art strategy for managing legal matters, comparable to those at major corporations, such as Ford and Caterpillar. Husky’s external firms are privy to Husky’s Holistic Legal Strategy and the firms’ understanding of the processes make Husky’s relationships with its outside counsel more productive and efficient. “They know why I’m asking for certain legal advice and what I’m going to do with it, so they are able to tailor their work product to fit our processes,” Musgrave says.
The process to develop the tools included a lot of trial and error, he notes, and they are still being refined in a drive for continuous improvement. The team is also considering developing a tool for commercial transactions.
“We had great processes before we developed the tools,” Musgrave says. “Ours go beyond what I have seen in the industry, and I knew we had something special here. Even attorneys at a number of external law firms have consistently said that our tools surpass those at leading Fortune 500 companies.”
From the Judges
"Husky's strong assessment process led to better decisions about effort put into patents, while strong risk assessment tools led to better allocation of fees and resources…The program was demonstrated as sustainable, with two full years of results."