Companies need to think carefully about how they protect, manage and leverage the various intellectual property (IP) assets across their business. Harnessing the power of IP assets is an essential element in commercial success and maintaining a robust IP portfolio is a core strategic concern. By taking an intelligent approach to IP strategy, companies can protect their essential assets and drive revenue in a cost-effective manner.
Mewburn Ellis’ Matthew Smith lays out nine tips for IP strategy success.
Tip #1: Ask yourself tough questions
Effective IP portfolios are based on strong foundations. This requires tough questions being asked about your business and the value it brings.
Ask yourself things like: why do we have the edge over my competition? What makes us unique? Why and how is our product/technology better quality? Why is our brand better known? Is our logo particularly recognisable? Specifically, what do we need to prevent our competitors from doing if our company is going to retain its market advantage? The answers to these questions help guide where your IP strategy should focus. The sooner they are answered the better!
Tip #2: Focus squarely on commercial value
IP strategy helps drive revenues. Identify the cornerstones of your company’s income - present and future. Focus IP strategy squarely on these key commercial levers and avoid being distracted by niche products or services that serve small markets with lesser revenue potential and that may absorb IP budget better allocated elsewhere.
Tip #3: Understand IP’s ‘attractive’ and ‘defensive’ abilities
IP has both ‘attractive’ and ‘defensive’ functions.
On the attractive side, potential investors want to feel confident that robust IP strategy is already in place and being implemented, positioned to help grow their capital investment.
Why do investors care so much? The defensive side. Effective IP strategy helps ‘keep competitors off the grass’ by guarding key assets against infringement. Protecting IP assets not only protects market share, but also provides strong leverage for bargaining. Furthermore, in certain jurisdictions, legislation (such as a ‘Patent Boxes’) links innovation funding to tax breaks, ensuring IP is also an effective tool for reducing taxation.
Tip #4: Protect your ownership
Laws relating to IP ownership are never straightforward. Businesses often fail to realise that, just because they paid for development, they don’t necessarily own the product. You need an IP ownership agreement firmly in place from the start, particularly if you are collaborating with third parties, subcontractors or consultants. Leave it too late and reaching an agreement can prove tricky. And it can get more difficult the more successful the collaboration is!
Tip #5: Different tools at your disposal
In constructing an IP portfolio, a wide range of building blocks is available, each with different uses, implications and costs. For example, some IP rights come into existence automatically (such as copyright in the UK), whereas stronger ‘registered’ rights, such as patents, registered trademarks and registered designs, must be specifically applied for. Sometimes, keeping something a ‘trade secret’ can be just as effective. Strong IP portfolios often blend several different approaches and rights.
Tip #6: Location, location, location
IP rights are territorial. If you want to protect your IP assets in a greater number of jurisdictions, then you need to secure a greater number of IP rights – which carries greater cost. You need to consider which are the markets most likely to deliver revenue growth, both for you and for potential investors. A common approach is for businesses to protect their assets in large or strategically important markets and, where they are well defined, countries where key competitors operate.
Tip #7: Get your timing right
Effective IP strategy is all about timing – particularly around the timing of applications for IP rights. For example, your first patent applications should be filed before the invention is made public, as whether the patent is granted or not is decided based on what was known to the public at the time the application was made.
Registered IP rights in most countries are granted on a ‘first come, first served’ basis. As such, a delay to filing might be very disadvantageous in a competitive field. Fortunately, systems exist that enable the costliest decisions to be delayed significantly. It is often possible to delay until a time when the project has either taken off or failed, allowing a better-informed decision to be made about which (if any) countries you should seek protection in.
Tip #8: Keep a firm eye on competitors
Remember, your competitors will be developing their IP portfolios while you grow yours. What’s more, they’ll be trying to outmaneuver you, just as you seek to outflank them. Intelligent IP strategy keeps a firm eye on the competition and avoids the bunker mentality of focusing too narrowly on your own enterprise. Periodically reviewing competitors’ filings for registered IP rights can provide useful clues about their potential new product developments.
Tip #9: Keep thinking
Operating an effective IP strategy is an ongoing, fluid task that requires you to stay vigilant and agile in the face of the changing environment. Stay alert and keep questioning: Are new IP registrations needed for a particular product or development? Can previous registrations be dropped? What is the competition up to, and how will that affect you?
Taken together, these nine tips will help you build a strong and commercially valuable IP portfolio, without breaking the bank. There is much at stake: high quality IP strategy is essential to shift the odds in your favour.