Intellectual property (IP) is everywhere and exists in many forms.
Most new initiatives result in IP being created. The IP is typically in the form of trade secrets at the early stages. But before an idea can be converted into a commercial product or service, it's important to understand the potential value of that idea and ensure that appropriate steps are taken to best capitalise on it.
The starting principles of capitalising on your IP are the same for all forms of IP rights.
Here are the basic steps.
- Determine the potential value of an idea or brand to the business, and the loss to the business if the idea becomes available for everyone else to use.
- If it has some value or could potentially cause a substantial loss to the business if available to others, then determine the kinds of IP rights that may apply. It may be as simple as ensuring the idea is kept a trade secret forever. Sometimes a number of IP rights could be used to ring fence your idea.
- Determine if the cost of securing those rights is outweighed by the benefits that the right IP rights can provide in the commercialisation of the idea.
Securing IP rights can benefit a business in a number of ways. They can:
- provide a monopoly to the idea, meaning you can exclude others
- support a manufacturing agreement
- help generate income from licensing your IP
- provide leverage to support a cross licensing deal
- improve the business' asset base to support a trade sale
- cause disruption and provide an annoyance to your competitors who then have to design around your patent at their cost
- provide support for contractual agreements that require some form of IP registration (eg, R&D agreement)
- provide validation to potential investors and joint-venture partners.
If you don’t take steps to protect your IP at the right time, you may be giving away a lot of value in your ideas to your competitors for free.
Create an IP culture
An IP mindset or culture must pervade through an organisation in order to capture and manage IP properly. This doesn't need to add a big burden on 'business as usual', but it does need to give the right people in the organisation enough knowledge to trigger IP steps, and raise questions or concerns.
Freedom to Operate (FTO)
Developing a good IP awareness in an organisation will also help flush out new initiatives that may be at risk of infringing on the IP of others. This needs to happen very early on and before too much is spent on R&D. Showstopper patents of others could cost the company time and money with no return on the new idea at the end.
Process to get an IP culture in place
There are a few steps you can take to help get an IP culture in place.
- Conduct an audit to take stock of what IP and procedures exist already. This may take the form of:
- Trade secrets, new designs and concepts still on the drawing board. Can/should they be converted into patents or be kept at trade secrets?
- Existing patents. Are they still business relevant?
- Brands, registered or unregistered (but to be registered)
- Contracts, and contractual obligations especially around technology and ownership and limitations on use
- Identifying if any new projects may result in FTO risks arising for the company
- Employment contracts
- Internal confidentiality and trade secret leaks
- Staff exit interviews. Do you reinforce company confidentiality policy?
- Consulting agreements, incoming and outgoing. Who owns what? How is confidentiality handled? What about copyright?
- Software licences.
- Create a board level down IP policy.
- Educate employees with regular IP seminars.
- Provide induction packs that include a 'value of IP to the business' explanation.
- Introduce some level of formality around idea disclosures, incentive programmes, processes to decide on next steps and trigger IP searching and protection. Stage-gate R&D and IP timelines fit well together. Triggering the right IP steps at the right time of R&D can make a big difference to the value of the end product.
- Consider having an IP champion or two in the organisation as 'go-to' people who can explain the organisation's approach to IP.
AJ Park has been working with innovative NZ companies for almost 125 years. We have helped create an IP culture and IP awareness with many, to successfully take New Zealand IP global. Give me a call or drop me an email if you'd like to discuss how we can help.
Click here for more information about The Icehouse programmes and workshops.*This was originally posted on The Icehouse website.