- Introduction
The World Intellectual Property Organization (WIPO) defines Intellectual Property (IP) as creations of the mind and encompassing various creative outputs from works of art to inventions, computer programs to trademarks and other commercial signs.1
According to David Bainbridge, Intellectual Property (IP) is an area of law which concerns legal rights associated with creative effort or commercial reputation and goodwill.2 In simple terms, Intellectual Property (IP) can be defined as inventions and creations of the mind, typically intangible, which can be owned and legally protected. For instance, when someone comes up with an idea (intangible form) and expresses or translates such idea into a tangible form, such intangible creation of the human intellect is classified as intellectual property.
Intellectual Property (IP) is legally protected through mechanisms such as patents, copyrights, trademarks, industrial designs, geographical indications, trade secrets and more.3 These protections allow individuals to gain recognition or financial benefits from their inventions or creations and intellectual property rights (IPRs) are the legal rights granted to creators.4
The digital age is a period when most information is stored and presented in digital format (utilizing personal computers, communication technologies), especially when compared with the period before the widespread use of computers.5 Long before the digital era, there was a time known as the "Stone age" when writing could only be done on stone or walls. Later, humanity transitioned to the use of Paper, where writing was captured in manuscripts and physical documents. Today, we find ourselves in a highly sophisticated electronically mediated global village, the Digital Age.
Commercialization is the process of transforming products and services into commercially viable assets.6 In the context of Intellectual Property (IP), it specifically refers to the process of bringing IP to the market with the aim of generating future profits and fostering business growth.7
Intellectual Property (IP) commercialization transforms a creative idea or innovation into a product or service which is profitable in nature. Selling such products or services is the most prevalent method of monetizing creativity. Intellectual Property Rights (IPRs) play a crucial role in this process by preventing competitors from unlawfully exploiting protected features.8
For example, when a creator develops a process for making a beverage, the formula used in production represents a significant long-term investment, and the creator should be able to benefit from that investment. Commercialization of IP involves more than just filing applications to protect and defend intellectual property, but also benefiting economically from the intellectual property. There are several methods to commercialize IP in the digital age, and they include outright sale/transfers, licensing, joint ventures, collaborations/partnerships, and more.
This paper will briefly explore the methods of monetizing Intellectual Property across the various types of intellectual property.
- Patent:
A patent is an exclusive right granted for an invention, typically allowing the patent holder to control how the invention is used or whether others can use it.9 In Nigeria, patents are governed bythe Nigeria Patents and Design Act.10 This Act provides the criteria for obtaining patents over inventions.11 An invention is patentable:
- If it is new, results from inventive activity and is capable of industrial application; or,
- if it constitutes an improvement upon a patented invention, and also, is new, results from inventive activity and is capable of industrial application.
Once an invention is patented, it grants the owner exclusive rights, preventing others from using it without permission. This is the initial step towards commercializing the intellectual property. The next step involves adopting a strategy to monetize and generate profit.
The following approach can be adopted to monetize patented invention in the digital age:
- 1.1.1. Technology Transfer (E-Contracts):12
This involves one party transmitting its technology to another for economic gain or the development of new products. This process is formalized through an electronic contract between the parties. Essentially, a technology transfer agreement functions as a form of IP license, wherein the contract's objective pertains to a specific technology.
Technology transfer can happen in various ways, including:
- Licensing: the owner permits the exclusive licensee or non-exclusive licensee of his technology to use the technology for a specified period of time without transferring ownership to the exclusive or non-exclusive licensee;
- Assignment: the owner transfers full title over technology to buyer as well as ownership of the technology, and;
- Joint Venture: Both the developer and buyer collaborate to establish a joint business, choosing the most suitable mode of technology transfer based on their preferences.
In summary, the patent owner allows third parties to use the invention in exchange for royalties, one-off payment, or licensing fees.
- 1.2 Trademarks:
A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises.13 In Nigeria, trademarks are governed bythe Nigeria Trade Mark Act.14 A trademark is one of the most valuable IP assets for a business due to the goodwill and reputation it embodies. In Nigeria, names, logos, slogans, word signatures, labels, numerals, or even combinations of colours can be trademarked.
The following methods by which trademarks can be monetized are:
Franchising is a type of licensing agreement that allows businesses to expand and distribute products without having to "reinvent the wheel." This is possible because it enables the replication of a successful business model that has already proven to be highly effective.
Franchising encourages the following:
- A low-cost diversification of a company into new geographical territories while maintaining substantial influence over how the franchisees conduct business;
- A tremendous benefit in the form of the typically enormous income earned from the franchising agreements;
- Royalty payments by the franchisee. In exchange, the franchisee
will pay royalties to the franchisor (along with a substantial down
payment at the start of the deal).
- 1.2.2 E-commerce Store/Online presence:
A trademark owner can sell branded fitness apparel, equipment, and accessories. By leveraging the brand's strong online presence, the owner can drive significant traffic and sales to the store.
- 1.2.3 Social Media Marketing:
Through platforms such as Instagram, Facebook, and TikTok, a trademark owner promotes products using engaging content, influencer collaborations, and targeted advertisements. The trademarked logo and slogan are prominently featured, enhancing brand recognition and attracting customers.
- 1.3 Copyright:
In Nigeria, copyrights are governed bythe Nigeria Copyrights Act, 202216 and copyright grants creators exclusive rights to control the reproduction or modification of their work for a specific period. It applies to literary, musical, artistic, audio-visual works, sound recordings, and broadcasts.17
The following are methods by which copyright can be monetized:
- 1.3.1 Licensing:18
Copyright licensing is the procedure through which the copyright owner grants authorisation to third parties to use the work for a certain period of time, for a specific purpose, in a specific region, and under negotiated terms. For instance, a copyright owner licenses an e-book to digital libraries and educational institutions, allowing them to offer the published work to their members and students. This generates additional revenue streams through licensing fees. Another example is where a copyright owner licenses the rights for his/her novel to be adapted into other media, such as a movie or a graphic novel. The copyright also creates merchandise related to the book, like posters, apparel, and collectibles, which the author sells through a website and online stores.
- 1.3.2 Cooperation and Collaboration:19
Collaboration differs from joint venture as the latter creates a new legal entity while the former is just a contract between the parties. A copyright owner can partner with subscription-based reading services like Scribd or Amazon. These platforms pay authors based on the number of pages read by subscribers, providing the copyright owner with ongoing income as readers engage with the publication.
- 1.4 Industrial Design:
An industrial design constitutes the ornamental or aesthetic aspect of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or colour.20
Methods by which industrial designs can be monetized are:
- 1.4.1 Licensing:21
The owner of a design can enter into licensing agreements with established electronic industrial design manufacturers, allowing the latter to produce and sell that design. In return, the owner of the design receives royalties for each unit sold, creating a steady stream of passive income. - 1.4.2 Cooperation and
Collaboration:22
The design owner collaborates with technology companies to integrate one's design into their office spaces. These partnerships enhance workplace ergonomics and provide bulk sales opportunities. Additionally, the owner of a design offers branded designs for specific companies, strengthening business relationships. - 1.4.3 E-commerce Store:23
The owner of a design sets up an online store to sell the design directly to consumers. The website showcases the unique design, ergonomic benefits, and customer testimonials. With digital marketing and utilisation of search engine optimization (SEO), the owner of the design attracts a global customer base.
- 1.5 Geographical Indications:24
-
Geographical indications (GIs) are signs used on goods that have a specific geographical origin, unique qualities, a reputation or characteristics that are essentially attributable to that place of origin. Most commonly, a geographical indication includes the name of the place of origin of the goods. Geographical indications are recognized as tremendous reserves of added value for quality, leverage for territorial development, and a key to promoting territories as tourist destinations.25 The coming of digital technologies are increasingly important in the agriculture sector, and the study of their impacts on commercialization of GIs are still limited.26 However, some ways GIs can be monetized in the digital age include the following:
- Online presence/E-commerce stores:27
Establishing a robust online presence through websites, social media, and the sale of GI products through major e-commerce platforms or specialized gourmet food websites that helps in reaching a global audience, and contributes to generating profit.
- Certification and Traceability:28
Using digital tools to certify the authenticity of GI products can help in building consumer trust. Blockchain technology can be employed to ensure the traceability of products from their origin to the end consumer. Also, incorporating QR codes or mobile apps that provide information about the product's origin, production process, and quality standards can enhance transparency and trust.
- Trade Secrets:29
Trade secrets are IP rights on confidential information which may be sold or licensed for monetary gain. One of the most valuable assets of anybusiness is its intellectual property, which includes trade secrets.Trade secrets are any confidentialinformation that gives a business an advantage over its competitors, such as formulas, processes, methods, designs, or customer lists. Unlike other forms of IP, such as patents, trademarks, or copyrights, trade secrets are not publicly disclosed or registered. This means that they can be protected indefinitely, as long as they remain secret.30
However,keeping trade secretssecret is not always easy or desirable. In the digital age, where information can be easily accessed, copied, and shared, trade secrets are vulnerable to theft, leakage, or espionage. Moreover, some businesses may find it more profitable tosell their trade secretsto other parties, rather than keeping them in-house.31
Although trade secrets are rarely seen to be the main element of an IP monetization strategy, they can be quite valuable and can be monetized by licensing to third parties with the use of access control systems to restrict access of trade secrets to other parties other than the licensed third parties.
- Conclusion
While intellectual property (IP) protection is available globally through methods like registration, renewals, licensing, and preventing abuse, many owners in countries like Nigeria often underestimate the value of their assets and fail to protect them. This oversight is due to widespread unauthorized IP exploitation within the country. Being unprepared for challenges from unethical competitors and bad market actors can lead to severe financial and reputational damage, significantly hindering growth. Therefore, registering and protecting IP assets can lay the foundation for the commercialisation of intellectual property rights (IPRs).
In an age of globalization and rapid advancements in digital technology, the world has become more interconnected, heightening the need for increased IP protection. It is essential not only to develop intellectual property assets but also to safeguard their ownership, management, and commercialization. Businesses should now recognize the advantages of these rights and effectively leverage them for commercial success.
Footnotes
1 See, WIPO, "What is Intellectual Property?" available at <https://www.wipo.int/edocs/pubdocs/en/wipo_pub_450_2020.pdf> accessed 4th March 2025.
2 See, David Bainbridge, Intellectual Property (Sixth Edition) Pearson Education Limited (2007). See also, Aluko Adeyemi and Associates, "An Introduction to Intellectual Property Law in Nigeria: What Every Creative Should Know!" available at < https://alukoadeyemiandassociateslawfirm.wordpress.com/2022/08/08/an-introduction-to-intellectual-property-law-in-nigeria-what-every-creative-should-know/> accessed 4th March 2025.
3 See, WIPO, "What is Intellectual Property?" available at <https://www.wipo.int/about-ip/en/> accessed 4th March 2025.
4 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 4th March 2025.
5 See, Digital Sociology, "The Digital Age" available at <https://digitalsociology.org.uk/> accessed 4th March 2025.
6 See European IP Helpdesk, "Your Guide to IP Commercialisation" available at < https://intellectual-property-helpdesk.ec.europa.eu/system/files/2021-02/EU-IPR-Guide-Commercialisation-EN%283%29.pdf> accessed 4th March 2025.
7 Ibid.
8 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 4th March 2025.
9 See, WIPO, "Patents" available at <https://www.wipo.int/en/web/patents/> accessed 4th March 2025.
10 Cap. P2 Laws of Federation of Nigeria 2004.
11 Section 1 of Nigeria Patents and Design Act.
12 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 4th March 2025.
13 See, WIPO, "Trademarks" available at <https://www.wipo.int/trademarks/en/> accessed 4th March 2025.
14 Cap.T13 Laws of Federation, 2004.
15 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas Into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 4th March 2025.
16 Nigerian Copyright Act, 2022, Federal Republic of Nigeria Official Gazette, No. 56 Lagos - 27th March 2023, Vol. 110, Act No. 8., page A179-243.
17 Section 2 of Nigeria Copyright Act 2022.
18 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas Into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 4th March 2025.
19 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 10th March 2025.
20 See, WIPO, "Industrial Designs" available at <https://www.wipo.int/designs/en/> accessed 10th March 2025. See Nigeria Patents and Designs Act, Cap. P2 Laws of Federation of Nigeria 2004.
21 See, Muskan Khandelwal, "Commercialisation of Intellectual Property: Alchemising Ideas into Income" available at < https://blog.ipleaders.in/commercialisation-of-intellectual-property-alchemising-ideas-into-income/> accessed 10th March 2025.
22 Ibid.
23 Ibid.
24 See WIPO, "Geographical Indications" available at <https://www.wipo.int/geo_indications/en/> accessed 10th March 2025.
25 Ibid.
26 Ibid.
27 Chiara Bartoli, Enrico Bonetti, Alberto Mattiacci, "Marketing Geographical Indication Products in the Digital Age: A Holistic Perspective" available at < https://www.researchgate.net/publication/356065892_Marketing_geographical_indication_products_in_the_digital_age_a_holistic_perspective> accessed 15th March 2025.
28 Chiara Bartoli, Enrico Bonetti, Alberto Mattiacci, "Marketing Geographical Indication Products in the Digital Age: A Holistic Perspective" available at < https://www.researchgate.net/publication/356065892_Marketing_geographical_indication_products_in_the_digital_age_a_holistic_perspective> accessed 15th March 2025.
29 WIPO, "Trade Secrets" available at <https://www.wipo.int/tradesecrets/en/> accessed 15th March 2025.
30 See, FasterCapital, "Sell Trade Secrets: From Secrets To Profits: Selling Trade Secrets In The Digital Age" available at < https://fastercapital.com/content/Sell-trade-secrets--From-Secrets-to-Profits--Selling-Trade-Secrets-in-the-Digital-Age.html> accessed 15th March 2025.
31 Ibid.
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