Intellectual property (IP) rights such as patents, trade secrets, copyright, design rights and trade marks can be extremely valuable assets. In this article, IP expert Jon Moorhouse explains why it is important for your business to think strategically about its IP position, and to have appropriate internal IP processes, controls and training, in order to help it grow and sustain its success over time.

IP rights cut both ways

There are many things you can do with your IP rights to create value for your business, for example:

  • maintain an exclusive market position
  • generate royalty income
  • gain access to other people’s IP, or key collaborations or projects.

This cuts both ways, as your competitors, partners and customers will also be looking to leverage value from their own IP assets. They could prevent your business from offering certain products or using particular branding, oppose your applications to register IP rights, or request a royalty or a cross-licence of your IP rights.

If they are successful, you may have to alter or abandon product lines, or re-brand; doing this at a late stage, possibly post-launch, can be a very expensive exercise, not to mention reputationally damaging. Alternatively, you may find you have to pay a significant licence fee to continue using your current product lines or branding, or that you can only sell in certain territories going forward.

By understanding these potential blockers at an early stage, you can ensure you set up your product development and commercialisation programmes for success further down the line.

A good IP strategy supports business objectives

Developing and implementing an IP strategy that informs product and brand design from the outset can help you achieve your short- and long-term business objectives whilst remaining sensitive to costs. However, you must be prepared to play the long game, acknowledging that it will take time to develop products and brands with appropriate IP protection that are not blocked by the IP rights of others.

To formulate your IP strategy, think about what you want to achieve, where, and over what time frame.

Do you want an exclusive market position, or a decent ‘springboard’ period before competitors muscle in, or simply to carry on your business without being blocked?

Do you need a strong portfolio of IP assets to attract partners, customers or investors? Do you want to license your IP, or offer franchises?

Do you want to concentrate on current markets only, or look to expand into additional markets or territories in the future?

All of these goals can be supported with appropriate IP decisions – for example, to file for registered IP protection in the right place at the right time, to keep certain information secret, or even to deliberately publish your invention to destroy its ‘novelty’ and hence prevent competitors from securing a patent on it which could block you (preserving your ‘freedom of action’). You will need to be mindful of broader sector trends and what IP rights your competitors have obtained or applied for. You may consider obtaining a licence or acquiring other parties’ IP rights – either via stand-alone arrangements or as part of a broader corporate acquisition.

Good IP governance: the right people need to decide

Decisions on IP protection of technology are often made via the R&D department, and on IP protection of brands via the marketing or other teams, whereas decisions to share or license the company’s IP may be made elsewhere. As your business grows, it is vital that all relevant internal stakeholders are fully involved and aligned in creating the right IP strategy and then following it. Strategies may change over time, but each IP protection and licensing decision needs to continue to be an aligned one over the full product cycle.

There’s no point in the R&D department spending a huge budget developing ground-breaking technology and deciding to keep it strictly ‘in-house’, protecting it as a trade secret, if the relevant commercial team plans to share it freely with the first partner it finds in order to get a deal done. This would cause the company to lose its competitive advantage, as the technology could no longer be used as a differentiator.

Implementing an IP strategy needs good IP compliance

Good internal IP decision processes are not enough on their own, however. It is also very important for all staff and business units to understand the risks involved in not protecting the company’s IP properly and in infringing other people’s IP rights, and to act accordingly.

Your talented brand design team needs to know that it must check what third-party IP rights might be relevant an early stage, in order to avoid any infringement issues later on. This way, the company can avoid time and money being wasted on an expensive product re-branding, and avoid any negative publicity. Budget holders need to understand that early IP checks represent time and money well spent.

It is a good idea to have a set of mandatory company rules on protecting IP assets, and being careful not to infringe the IP rights of others. You could do this by requiring all individual staff members to comply as part of their personal conduct at work, perhaps introducing an IP limb to any ethics and compliance programme you already have; and require all companies within your group to comply as part of your corporate control structure.

Good IP compliance needs IP training

IP training to staff will help ensure they understand these IP risks and are clear on the consequences – for themselves as individuals as well as for the business – if they do not comply with the company’s IP rules.

No business is immune from these considerations, no matter how small or new, or how large or well established.

If you need help with any of the IP issues discussed in this article, Jon would be delighted to assist and can be reached via the details below.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.