It’s every innovator’s worst nightmare – to see their own idea being successfully exploited by a competitor.
Our article explains what an intellectual property (IP) gap is, why they are so dangerous, and some strategies to help ‘plug the gaps’.
What is an IP gap?
An IP gap is effectively a commercially viable opening that exists in a company’s competitive armour – that a competitor can capitalise on. This opening allows a competitor to come into the market and compete quickly and successfully.
How competitors can exploit your IP gaps
IP gaps sometimes allow a smart competitor to become an ‘us-too’ company that outperforms the original business.
They utilise the original company’s work – including the substantial R&D costs and time they have incurred – and hit the ground running by using that as their starting point. This smart competitor will then plug the gaps with their own IP, and with such they restrict the original IP owner from developing their product.
In the corporate environment, early-stage companies are often seen as the external R&D division for ‘us-too’ competitor companies. The smaller company is effectively ironing out for free many of the technology and market validation wrinkles in a new concept or venture.
Often, the smaller company will strategically position themselves to get acquired by larger competitor (and thus reap the rewards for all their work). But in the worst-case scenario, they may simply be blindsided and driven out of business.
Identifying your gaps is critical
It’s important to recognise that gaps in IP protection always exist. It’s not necessarily a bad thing, because a patchwork of IP protection can have a net synergistic effect - a bit like a spider’s web that forms an impenetrable shield.
Many companies, particularly early-stage ones, intentionally have gaps due to budget constraints.
However, most IP gaps are what we’d call overlooked gaps. And this is where it gets dangerous.
Strategies to avoid IP gaps
- Understand your risks
As mentioned above, overlooked gaps are particularly dangerous – especially for early-stage companies where their entire business is dependent on one or two key pieces of IP. If a competitor was to try to steal these (and let’s assume they will!), does your existing IP protection place enough barriers in their way?
- Search as deeply as possible
Landscape and prior art searching can provide a lot of really valuable information about existing technology and existing market players at a global level. These are two types of analysis that are usually undertaken by your specialist IP adviser.
A patent landscape search is used to assess the current patent situation of a specific technology. It may reveal a crowded patent landscape indicating that there may be substantial risks but also opportunities. It may also reveal bluesky meaning there is lots of room for unique (and hence protectable) innovation.
- Focus on the downstream developments
Unfortunately, companies often skip the point above, and launch straight into filing a patent application for what they believe will be a very broad novel concept. They end up resting on their laurels, feeling a sense of security around owning a pending patent for the broad concept. This will create dangerous overlooked gaps in their IP.
Often it’s the downstream developments where the really valuable – albeit narrower – patent protection resides. If these downstream developments are then not protected (and when the core patent falls over because the prior art turn out to be all over it), they are left with no IP protection at all. This basically makes their IP available for free to their competitors.
- Conduct regular IP audits
Conducting regular IP audits involves reviewing and analyzing your company's existing IP assets, identifying any gaps and taking steps to fill them.
- Monitor competitors' IP
Keeping an eye on competitors' IP can help a company identify any potential risks to your business.
- File for patents, trade marks, and copyrights
A layered approach to IP protection strengthens a company’s IP position and reduces the potential risk of a competitor discovering an IP gap. Each type of IP protection serves a specific purpose and on occasions these will overlap. So ensure your business is protected from multiple angles with patents, trade marks, and copyrights.
- Invest in research and development (R&D)
Investing in R&D can help a company create new IP and stay ahead of competitors.
- Partner with other companies or organizations
Collaborating with other companies or organizations can help a company gain access to new technologies and IP that they may not have been able to develop on their own.
- License IP
Licensing IP from other companies who have already invested in R&D can be a cost-effective way to fill gaps in a company's IP portfolio.
- Establish an IP management plan
Having a plan in place for managing IP can help a company identify and fill gaps in their portfolio more effectively.
Can you patch an IP gap?
Restoring IP gaps can be difficult. For technology-based IP, once an innovation has become public, it can be impossible to recover its trade secret status, and it may be difficult to secure patent protection for it.
Many countries do have grace periods for filing patents after an innovation is made public, but such grace periods only provide a limited window to patch the IP gap.
If it is too late, the company needs to learn from its mistake, and hope their next generation of product includes innovative value drivers they can secure new IP protection for.
Keen to identify your IP gaps?
If you have a specific question or need advice, please get in touch with Anton Blijlevens or a member of our team.