Just like your business' physical assets, intangible intellectual property (IP) assets need to be carefully utilised and protected. However, unlike physical assets, intangible assets account for up to 95% of a company's value 1 The three steps below will help create a robust foundation for protecting and leveraging on your business' valuable IP assets.
1) Identify your IP Assets
A large proportion of a company's value comes from its intangible assets, but what IP assets does your business have and where do they subsist?
As a starting point, all businesses have a trade mark. These marks, including brand names and logos, carry corporate value as they enable consumer recognition. In 2019, DBS Bank was ranked Singapore's most valuable brand at US$9.03 billion2. This amount does not include DBS' physical assets, just the brand.
Your business may have also developed a certain "look and feel" for websites or mobile applications to enhance your brand. These "get-ups" can be protected under the law of passing off in Singapore. Specific elements such as graphical user interfaces (e.g. the clock display on an Apple Watch) may also be eligible for protection as industrial designs.
Some businesses may also have developed new products, systems or processes for achieving certain results. These inventions can be broadly protected by way of filing a patent application. Alternatively, technical know-how can be safeguarded as trade secrets and confidential information.
As your business evolves, new IP assets will also emerge. For example, GrabTaxi underwent a substantial rebranding as it evolved to Grab in 2016. In connection with the expansion from taxi-hailing services to wider transport, delivery and e-payment offerings, the company adopted a streamlined "Grab" logo without the taxi imagery.
Left: GrabTaxi logo | Right: revised Grab logo
As such, brand owners should conduct regular audits to identify and protect new IP assets. IP professionals would be able to advise on how best to protect and monetise these assets as they develop.
2) Obtain Registration
Trade mark registration is an important investment with long-term benefits that every business should be looking into. In fact, registered protection can last indefinitely with proper maintenance.
From the perspective of financing, businesses should ensure that their IP assets are properly recorded and protected, as investors will conduct due diligence to assess the value of these IP assets. Vulnerabilities in relation to a business' IP can seriously compromise fund-raising opportunities. IP assets can also act as collateral in financing arrangements.
Further, trade mark registration gives you stronger rights against third parties improperly using your brand names or logo. In particular, brand owners with registered trade marks can apply for recordal with certain countries' customs offices. China's customs office is authorised to search and seize goods which are suspected of infringing a recorded mark. Similarly, trade mark registration is required by certain e-commerce platforms' brand registries, such as Amazon.
For the purpose of securing your business' online presence, it is also crucial to register the relevant names as domain names and trade marks. This will give you an advantage if it becomes necessary to recover similar domain names from third parties such as cyber-squatters.
Wherever your company may be in its business life cycle, there are numerous legal and commercial benefits to obtaining registration of your IP rights. Pre-filing clearance searches are strongly recommended to identify potential obstacles to registration.
3) Develop a Brand Policy
A company-wide brand policy should also be developed to ensure that employees use and protect your business' IP assets uniformly.
This is especially important when operating online. New channels and strategies for digital communication offer businesses the flexibility of developing multiple campaigns with abbreviated lifespans, such as 24-hour Instagram Stories, but there is a risk of names and logos being used inconsistently which can dilute the brand. For example, logos may be used in different colour combinations, and spaces between words in a name may be omitted.
As such, a brand policy should cover how names and logos should be used in all branding material, from e-mail signatures to social media posts. Such policy should also be shared with third parties engaged to promote the brand, such as brand ambassadors and designers.
If registration has been obtained, it is also important to understand how to maintain and renew these registrations.
Investing in IP protection may not always seem like a priority. However, cost-cutting at the initial stages can lead to more expensive predicaments, for instance if a third party is later discovered to have copied your brand. A "do-it-yourself" approach is also risky as you may find that what you have registered does not provide the full of scope of protection intended. These risks can be mitigated by working with IP professionals to develop a holistic IP strategy for your business.
By protecting your valuable IP assets at an early stage, your business will be in a stronger position to compete in the technology and knowledge-driven future economy.
This article was first published in Entrepreneurs' Digest issue 87.
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.