Innovators vs Implementers

Innovators vs Implementers

By The Fatty Fish Editorial Team - January 14, 2022

One of the many recurring themes you are likely to encounter in discussions about innovation, patent litigation, and antitrust action, is the complex relationship between innovators and implementers. This relationship, when healthy, is symbiotic. When it isn’t healthy, it can become adversarial, even downright destructive. In this article, we will cover the basics of this relationship under the best and worst of circumstances.

At its most basic level, innovators and implementers perform two distinct, symbiotic roles. On the one hand, innovators invent new solutions to engineering problems, new and better ways of doing things, new technologies, and patent them. On the other, implementers, who are often technology OEMs and/or technology service providers, implement them as features in their products. In this model, the innovator invents, and the implementer markets. An example of an innovator might be a chip manufacturer, whose mobile platform will power a handset OEM’s next flagship device. An example of an implementer might be the OEM, whose engineers and product managers will decide which features of that platform to use and how.

More often than not, implementers are innovators in their own right, but because of the complexity of the technology ecosystem today, depend on technology partners to provide them with some of their solutions. Apple and Samsung, for example, are both innovators and implementers: When they implement their own proprietary solutions, like when Apple deploys its own M1 chipset in one of its devices, or Samsung deploys its own Exynos processor in one of its devices, they are innovator-implementers. When, however, either one implements a technology solution from another vendor, like for instance a Qualcomm Snapdragon SOC or modem-RF system, they become implementers. This isn’t to say that these OEMs cease to innovate in the way that they implement the technologies they purchase or license for use. Implementing outsourced solutions often comes with its own universe of customizations and optimizations. The point is that when an OEM implements a technology developed by a technology partner, the role that OEM takes on in that relationship is that of implementer.

When the relationship between innovators and implementers is healthy, things tend to go smoothly: innovators invent and implementers implement. If everyone does their job properly, implementers transform the innovators’ innovations into marketable features and sell a lot of devices. Innovators, in turn, are rewarded by a high volume of orders for hardware, or technology licensing revenue generated from their intellectual property portfolio. Consumers are happy, implementers are happy, innovators are happy, and investors are too. Everyone wins.

Sometimes, however, that healthy innovator-implementer relationship can tilt out of balance, with often dire consequences. In some cases, it is the innovator who, out of greed, decides to raise the price on some of its solutions or patents, consequently squeezing some of the profitability out of the implementor’s revenue model. In many cases however, it is the implementer who, in an effort to lower its costs, will work to either lower the price of the innovator’s solution, or lower the value of his IP portfolio. This tactic has become so prevalent in the technology ecosystem, which now extends into manufacturing, automotive, healthcare, transportation, business services, and infrastructure sectors, that it is the subject of the second part of this article, which you can read here. In other cases, implementers sometimes also try to absorb innovators outright, by acquiring them or some portion of their IP portfolio.

For now though, be aware that, increasingly, the relationship between innovators and implementers is becoming fraught with intrigue, and schemes, and double-crosses, as more and more implementers, under pressure to lower costs and either protect or grow their margins, resort to increasingly aggressive and creative tactics to deflate their suppliers’ prices and devalue innovators’ IP portfolios.

In Part 2, we will dive more deeply into the growing effort by some industrious implementers to devalue IP and weaken patent regimes on a global scale by weaponizing the courts, key regulatory agencies, and powerful lawmaking bodies. We will also discuss the danger that this poses to innovation in general, and to the rich ecosystem that finds itself threatened along with it by this short-sighted but potentially devastating effort.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.