My colleague, Helen Burt, discusses why having a solid intellectual property strategy is crucial for businesses of all stages.
A well-defined, robust intellectual property (IP) strategy is key to ensuring adequate protection of your IP assets – which in turn will promote and facilitate the growth and success of your business.
Does it really matter? YES!
IP is a business asset that can drive business growth by creating value and generating revenue through commercialisation of your IP:
o Core IP assets can be licensed to produce royalty streams;
o Non-core IP assets can be sold to produce additional revenue; and
o All IP can be used as collateral – to assist in raising finance.
• IP grants you a monopoly right – to prevent others from doing what your monopoly covers.
• IP creates and enhances your competitive advantage – it promotes and solidifies your market share and generates not only revenue but also customer loyalty.
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• IP can act as a ‘lever’ or ‘bargaining chip’ in commercial negotiations (such as cross-licensing of others’ IP, joint ventures, co-existence arrangements, etc) or when negotiating settlements in litigious disputes.
• Properly protected IP is a strong deterrent against others encroaching on your space and against spurious infringement actions.
• Proper enforcement of your IP prevents loss and dilution of your IP assets (and therefore loss of revenue).
• A robust IP strategy:
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o optimizes business processes and enables development of sound business strategy
o ensures efficient and cost-effective use and allocation of financial and human resources
o separates the “wheat from the chaff” – it enables you to identify the new, commercially-beneficial IP and discard any unused, obsolete IP
o mitigates the risk of infringing others’ IP – which avoids:
wasted costs (legal costs, re-branding and re-development costs, payment of damages including in some instances treble damages)
loss of management time § business disruption
reputational harm and loss of customer loyalty
FIVE steps to developing a robust IP strategy
Step 1: Identify the overall objectives behind your IP strategy and assets:
a. What do you want to achieve? In the short term? In the long term?
b. Does your IP strategy allow for future ‘tweaks’ as your business matures, grows?
c. How much will it cost to achieve your objectives? If you don’t currently have enough in the budget, prioritise your objectives, adopt a tailored approach
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Step 2: Identify and then protect your IP – adopt a tailored approach to fit within your budget:
a. Protect only your core IP
b. Don’t waste time and money on protecting IP that you will never use
c. Only protect in countries key to your business
d. Trade Marks, Logos:
i. Don’t waste money protecting descriptive words
ii. Google your proposed trade mark – if it is already being used, use something else or consider using your mark in a stylised form or with a logo
iii. Only register your core trade marks
iv. Consider cost-effective strategies – such as:
(1) filing in black & white (covers you for all colours);
(2) filing initially only for a word mark (your logo can follow later when budgets permit);
(3) applying for both UK and EU-wide protection (covers all EU countries and any new countries that may join in the future) – you may want the separate UK one given the recent Brexit vote.
i. Not available in all countries
ii. Only protect core aesthetic features of your logos, web icons etc
iii. Consider applying for EU-wide protection
iv. Protection still available 6 months after you start using your logo, designs. So you can hold off for a little while until budgets permit
i. Are you able to protect your idea? Different countries have different requirements
ii. Is patent protection advisable? (Remember: you will need to disclose your idea). Is it more cost-effective, valuable to keep your idea a trade secret?
iii. How quickly is the technology changing? Will your idea be obsolete in a few months? If so, is getting first-to-market more appropriate vs time and costs spent securing patent protection?
Step 3: Maintain and regularly review your IP strategy:
a. Is it still appropriate and strong?
b. Is there adequate awareness and a cultural focus on IP within your business to ensure proper identification and protection of your IP?
c. Does your business own your IP? Have you reviewed your employment agreements to ensure that all IP developed by employees belongs to your business?
d. Have you reviewed your third party developer/consultant agreements? Do you have robust, tight IP assignment agreements or clauses in these agreements to ensure that you own all material IP? REMEMBER: PAYMENT ≠ OWNERSHIP
Step 4: Maximise the potential of your IP through shrewd exploitation, licensing and commercialisation of your IP.
Step 5: Enforce, where appropriate, your IP to prevent loss and dilution of your rights and unwanted attacks by others…
BUT: Always conduct a cost-benefit analysis before embarking on any litigation. Is this conduct causing or likely to cause a significant threat to the protection and value of your IP? If not, get on with your business; save your time and money for those fights that will benefit you. Consider reputational risks if you pursue vs not pursue. Does likely damage to your brand, customer loyalty warrant action being taken?
Please feel free to contact us if you have any questions or comments on the above or if you need any help with any IP-related queries. This is for guidance only and should not be relied upon as legal advice.