This guide has been written to help you structure your intellectual property strategy and consider your criteria for selecting a partner for developing your IP.
By creating an innovation strategy that is forward-looking and global, while remaining true to the company’s vision and values, you will help to avoid a business disaster in the future.
You'll also inspire your colleagues to collaborate more effectively, and impress investors by uniting your research and development goals with your corporate strategy.
What Is Intellectual Property?
Why Does Intellectual Property Matter?
Intellectual Property = Corporate Strategy's 'True North'
How to Value Intellectual Property In Your Business
Defining Your Intellectual Property Strategy
Selecting An Intellectual Property Partner
Intellectual property – or ‘IP’ – is a broad term that describes your intangible assets. These assets are the outcome of your creativity and include things such as unique designs, brands, publications, new inventions, or even songs. Depending on the nature of your intellectual creation and the jurisdictions concerned, your intellectual property can be safeguarded in a number of ways, including:
Copyrights, a legal term which is used to describe the expression of an idea, not the idea itself.
Geographical indications, which include the name of the place of origin of the goods.
Industrial designs, which constitute the ornamental or aesthetic aspect of an article.
Patents for technical utility inventions, products, systems or software innovations.
Design protection to protect the appearance, shape, pattern or colour of an object
Trademarks, a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.
Trade secrets for certain types of confidential information and know-how.
As digital disruption has ripped through almost every industry, intellectual property has become more prominent on boardroom agendas. In the wake of the 2008 economic slowdown, nimble and ambitious scale-ups have forced their larger brethren to respond by increasing their investments in research and development, and also intellectual property. But there remains a worrying information void when it comes to the potential power of intellectual property. And this can cost companies hugely, particularly as they expand into new areas of innovation or new territories. Large enterprises tend to hold many patents, but their intellectual property is not always furthering wider corporate objectives.
What is missing in these instances is a well-formulated IP strategy, which supports the overall business goals and details specific milestones in the company’s innovation roadmap. Often, in-house IP teams will be sitting too far from R&D departments, or there is a broader lack of coherence between business units.
Another common reason for a diluted IP strategy is because of historic mergers and acquisitions. A good IP strategy will reconcile the good work of product engineers with corporate strategy.
Meanwhile, for smaller organisations focused on growth, the prospect of investing in intellectual property seems daunting, complex, time-consuming and expensive. Instead of navigating complex patent filings or infringement litigation, they would rather apply their resources to scaling their businesses through investing in aggressive sales programmes.
This is understandable, but the failure to develop a well-crafted IP strategy regularly proves fatal to fledgling companies. Often consumed by seeking investment, developing teams and marketing plans, IP tends to be overlooked. And yet this is among their most valuable, if not the most valuable, asset. Start-ups and smaller businesses should always seek out counsel, which does not have to be expensive or time consuming. Ultimately, these investments in time and capital will be minimal when compared with the cost of not investing in IP.
Innovation requires a team approach. A considered and structured intellectual property strategy can help your company create barriers to entry for your competitors, provide new revenue streams, and serve as an internal benchmark for innovation.
In summary, intellectual property provides your company with added commercial value.
So, whether you are in a large corporate with a fragmented picture of your IP or you are in an ambitious scale-up without a dedicated IP team, if you want to generate value over the longer-term, you will need to consider how your business units and teams of engineers can be brought on your innovation journey. You’ll need to demonstrate how intellectual property ties into your corporate strategy.
All-too-often, intellectual property is treated as an isolated project which usually centers on patents. But IP is much more than that. It includes anything created through human intellect – your databases, your software, your trade secrets, your technology and, of course, your trade name – basic, but important. If you don’t protect your trade name, you may find that, as your brand expands into new markets, you are no longer able to operate under the same name in new jurisdictions, limiting the potential value of your company.
Looking more broadly at your intellectual output, if your business invests in innovation, you and your investors will need to ensure you see a return on that capital investment. After all, you’re in business to turn a profit. You might have produced a unique product. Perhaps you have created a new, improved way of delivering a service. Regardless of what it is, intellectual property law allows you to protect your invention by prohibiting your competitors from using something identical or similar to it. This gives you a unique foothold — or an unfair advantage — in your sector.
A source of great concern for many organisations which have launched a new brand, product or service is whether they are using a technology or a methodology that is already patented or trademarked by a competitor. To avoid disappointment, you should consider your freedom to operate early on in your product or service development to ensure that you are not infringing on the IP rights of someone else. By running a freedom to operate analysis, a patent attorney can sift through all existing literature pertaining to your product, process or service and can provide a legal opinion on whether or not there is a risk of encroaching on third party rights.
The benefits of intellectual property go beyond protection. If you hold the rights to a product design, it serves to boost your brand’s profile by demonstrating you’re your customers that you are an innovative market player. It enables you to market a unique offering to your audiences, and price your services or products accordingly. Intellectual property can therefore give your brand credibility, uniqueness and cache.
If you are in a disruptive firm, you can patent your technology and thereby carve out an entirely new market for yourself. Your intellectual property will thereby provide you with a head-start over potential competitors. Or, by running a competitor analysis, you can determine if you are innovating in an already crowded market.
Conversely, if you are innovating in a space in which your competitors are not present, this might be a sign you are not innovating in the right area and it is possible your creation will not be of interest to your addressable market. Moreover, intellectual property serves as a benchmark allowing you to see how you fare against your competitors. In other words, it provides your corporate strategy a True North.
Over time, your company is likely to develop a series of products or product lines. And as it does, you’ll need to ensure you’re not spreading your service offering too thinly. Licensing your intellectual property rights (IPR) to third parties to manufacture and sell your products or services can provide you with a valuable income stream. It also can serve as leverage should a conflict arise, enabling you to resolve IP disputes outside the courts, saving significant time and money.
When it comes to valuing a company, intellectual property often represents the most significant asset class. Therefore, ensuring that value is maximized and protected is critical. A pitfall to avoid is leaving your intellectual property at the bottom of your to-do list. The value of brands, patents, trademarks, trade secrets and so on can be the difference between a sale of your business or not.
In other words, there is a significant opportunity cost – if you have not invested in intellectual property, your business may lose its attractiveness to investors, who will look at IP as part of their due diligence. Just think about it – if you’re a European business and haven’t patented your technology in the United States, it’s very likely someone else will have. And therefore, your service offering cannot be expanded freely to the world’s largest addressable market for your business. Of course, this severely limits the potential value of your company.
Irrespective of the industry in which your business operates, the chances are you are both using and creating intellectual property already. So that you can grow with confidence and ensure your company holds real value, you’ll need to consider how to protect and manage your intellectual property. Conversely, if you’re using intellectual property that belongs to another company – even if unwittingly – you’ll need to act quickly to ensure you are within the law by purchasing a licence of buying-up intellectual property to avoid costly litigation.
In order to build an effective patent portfolio, you will need to consider your longer term corporate strategy, which includes internationalization for example. How can you ensure freedom to operate within your key markets? You’ll need to understand the patent landscape in the jurisdictions you wish to compete within. This means asking yourself where to file patent applications and weighing up the advantages and disadvantages of pursuing various filing options. Then, you’ll need to anticipate the possibilities of litigation in those jurisdictions and understand what your options for litigation are.
Change is not always easy, but it is inevitable. Traditional IP firms which are failing to evolve will be confined to the dustbin of history; for example due to a lack of understanding of commercial circumstances of the customers that they seek to serve.
A new category of disruptive IP agencies has arrived. Underpinned by technology, these firms serve as global partners by tapping into experts across any industry and in any jurisdiction.
These tech-savvy and modern firms take a personal approach, with great empathy for their customers. But they don’t demonstrate their customer-centricity by hiking their fees to cover the cost of their expensive offices.
The future belongs to dynamic IP firms and, in today’s innovation landscape, your needs are fast, complex and global. You should demand an IP firm which can rise to these challenges.WHY AALBUN?