Most businesses know that intellectual property (IP) is important but many are not aware that a comprehensive IP strategy can underpin just about every aspect of a company's operations. Jackie Maguire, CEO of Coller IP talks to Fastener + Fixing Magazine.
The world of intellectual property (IP) can seem daunting, especially when it comes to protecting inventions from being copied when trading internationally. Most businesses ensure they have some kind of IP protection, but often that is as far as it goes. Used strategically, however, IP can underpin a business in a number of different ways. Deploying IP strategically boils down to three key issues, all of which are both important and interdependent. Firstly, you need to understand what you have and the value of it. Secondly, you need to protect it. And finally, you need to consider how to enhance and exploit it.
The first step is to undertake a thorough audit of all the intangible assets in the organisation. Identification of all the valuable intangible assets in a company can be done internally or by calling in outside specialists. Such specialists will, after undertaking an audit, also perform a landscaping exercise in order to fully understand the intangible assets that are of value. This includes assessing the company's unique position relative to existing or potential competitors, while at the same time identifying possible opportunities for exploiting any IP further. The specialist can then put a value on the assets assessed.
Next, a company needs to ensure that protection for these assets is as watertight as possible. Having the right patents and trademarks in place is, of course, important. Filing patents, and perhaps registering trademarks and designs is certainly part of this. But a company's value is contained in its wider intangible assets. This includes so-called 'know-how' as well as branding, skills, policies and processes. Written materials, customer contact lists and bespoke materials can all form part of your intangible assets. If these assets are not protected (or not protected thoroughly enough, for example in each significant country where it may be at risk) there is a real possibility that an organisation could have not just its trading and product names stolen but also its ideas and inventions. Other areas such as employee contracts also need to be considered. Are they written in such a way that they prevent their employees taking ideas and information to a competitor?
Protecting innovative developments
Obtaining protection through a granted patent is just one way to protect inventions and ideas. Having patents for innovative developments and your inventions gives you rights to stop others from making, selling, licensing, distributing or otherwise profiting from your invention for a limited period of time in exchange for a public disclosure of that invention.
When it comes to patents, novelty is key and so it is important to know if someone else has also developed something close to your invention, which would prevent it from being claimed as novel. Before starting your patent application, you should therefore undertake a global patent search. It can be quite complex to submit a patent that stands a good chance of being granted, and novelty is one aspect that needs to be considered.
Organisations sometimes forget the need to ensure that nothing is publicly disclosed before full protection is in place. There are many examples where companies have inadvertently made a public disclosure – at a conference, in a research paper or article, or perhaps in standards meetings. From that point onwards, if a patent application has not been filed, then it may not be deemed new or inventive, and it will be difficult to get a commercially valuable patent for it. In such a case, a business runs the risk of giving away its ideas or inventions for free.
Companies should not forget the important role that trademarks, registered designs, database rights, copyright and trade secrets can also play in protecting innovative developments, branding and new business models.
Going global
If an organisation is trading, or planning to trade, internationally, the issue of protecting intellectual assets across the globe can be quite intricate, particularly in this digital age, where access to information is so easily available. Wherever possible a company should register its IP rights in its key geographical markets.
Each country has different processes and methods, and the pitfalls in obtaining IP in each country also vary. For companies trading across several countries, protection of intellectual property is certainly possible – most people would say essential – but not always very straightforward. There are, however, some simple steps that can be taken. If an organisation has decided to trade in a particular country, it needs to try to extend protection in that country. We have worked with clients who think they are fully protected in all the countries that they need to be, when in fact, on closer examination, they are not, leaving the business open to risk.
In Europe, a system operates to provide a method of protection across the EU states. In the EU, different trade restraints apply, and it is especially important to consider competition law, which covers the free movement of goods around the EU and the avoidance of the abuse of a dominant position in the market. Recommendations for the exact route to choose will depend on the countries involved, the stage of development of the technology and the nature of revenue streams and cash flow.
Because patent protection overseas can be complex, advice at an early stage helps ensure pitfalls are avoided, opportunities maximised and costs are kept to a minimum. It can be timeconsuming and costly to sort out errors later. In addition, patent portfolios need to be reviewed on a regular basis to ensure that as organisations and legislation change, full protection remains in place.
Monetisation
So, finally, to monetisation. Coller IP has developed a Commercialisation and Management Process that allows clients to understand the value of their intangible assets and to assess and track the commercial potential of their products and services at different stages of development. In addition, the process prompts decisions on how and whether to protect the underlying assets.
Intangible assets can be valued in monetary terms and knowing their worth can help you understand their true value to your business.
If you are considering expanding the business, be very careful about doing so until you are sure that all your legal protection is in place. Make sure that anyone with whom you discuss an idea for a new invention – whether a product or a service – has signed a confidentiality or non-disclosure agreement. During the growth and development phase, a company needs to be pro-active in monitoring any infringement of its IP.
IP should be fully integrated with a company's business plan; and, of course, during the life of a company, the plan will change. The IP needs to be reviewed on a regular basis to ensure it is constantly aligned to the business plan. A good IP advisor will not just help a business with the legal aspects, they will actively help in the commercialisation process of the ideas behind the goods or services that the company is selling by helping the organisation realise the tangible value of different aspects of the IP. A regular audit of the IP against business strategy is an excellent idea. This may show IP that is no longer core to the company and which could be sold or licensed, and highlight other areas where IP could be developed further to add value to the company.
If your business has been trading for some time, you may decide that it is time to either merge with another company or sell. If you are the company initiating a merger or sale, you need to know what your IP is worth in order to retain the maximum value for your company. The same applies if you are planning an IPO.
For anyone looking to attract funding, getting the IP in order is a must. Many venture capitalists/angel investors will be considering a range of IP factors when making their decision whether or not to invest. Knowing the value of your IP – or which parts of your IP are more valuable than others – is essential in making decisions about what parts of the business to develop, and when considering applying for funding or contemplating a sale.
If the worst happens and a company becomes insolvent, having IP rights that could be sold on can help the company and its creditors in such a situation. The optimum way of ensuring success is to integrate IP with the business plan right at the start. Putting a value on the IP, ensuring the right protection is in place and reviewing it on a regular basis to ensure it is delivering maximum commercial value is an important part of the business strategy for any kind of business and its investors.
For a copy of this article on How to Manage Your Intangible Assets click here
To view the July edition of Fastener + Fixing Magazine which first published this article click here
Originally published August 2012
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
