Most businesses realize that intellectual property (IP) is a valuable asset worthy of investment and protection; yet many limit the potential of their portfolio by thinking too narrowly about the full range of IP that is owned and how best to leverage it. Having a clear IP strategy focused upon revenue enhancement can help avoid such limitations, and in-house counsel can play a key leadership role in this work by helping to develop and implement a plan that identifies, protects and monetizes their clients' IP to the greatest advantage.
To get started helping clients optimize their IP, in-house counsel may wish to consider implementing the below 5-pronged plan:
- Educate Management
A knowledgeable client is the first layer of protection for a successful IP program. Help management quantify what types of IP exist in their business and how that IP adds value or contributes to the company's competitive advantage, or does not. This may be clear with some types of IP (e.g., royalties from patents and trademarks), but other types, such as trade secrets or URLs which may be equally important to protect, can sometimes be overlooked.
- Conduct a Strategic IP Audit
Help clients identify all of the different types of IP owned by the company, including any IP that is either in development or being used without full documentation. The IP audit can also uncover whether the company is using IP that is under license from a third party and if those rights are being properly exploited and reported. Counsel can then assist clients in creating a matrix of the company's IP and its strategic function in the business.
- Consider Revenue over Rights
Once identified, evaluate whether the appropriate legal protection exists for each type of IP, keeping in mind the associated revenue. For example, a multi-national trademark program may be very expensive and take months or even years to secure, whereas, adding non-compete and non-disclosure provisions to company contracts (especially with employees and consultants) may be relatively simple.
- Streamline Costs
Help reduce portfolio costs by implementing an on-going review and cost/benefit analysis to determine whether any particular IP is worth defending or maintaining. As products and branding change over time, so does the value of previously-exploited IP. By scheduling a regular process to evaluate the value of the company's IP, in-house counsel can help guide strategic decision-making with valuable data.
- Create Templates to Use
Create a customized portfolio of legal templates designed to protect IP, including, for example, mutual and one-way non-disclosure agreements (NDAs), employment and consulting agreements with works for hire, confidentiality provisions and restrictive covenants, and licenses that contain prohibitions on competitive use. If the company sells branded consumer products, policies and samples that dictate the proper use of company trademarks and logos are useful. For more on how to create a template portfolio, see this helpful post from my colleague.
Intellectual property by its nature is often difficult to identify and value, particularly if it is part of a large and diverse portfolio. However, by developing a broad and systematic approach to managing IP, such as the one described above, in-house counsel can help their clients both optimize IP value and reduce costs.
Originally published by 9 November, 2022
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.
