Commercial Success and Understanding your IP Position

By Paul Adams

Hundreds of organisations have worked with us to commercialise their technology over the last seven years: everyone from the guys in garages to Fortune 100 companies, from venture backed start-ups to research institutes which are publically funded. Throughout this we have seen triumphant successes and dismal failures. Surprisingly the starting point for such a varied group is remarkably constant: everything comes back to understanding your intellectual property position.

Intellectual property (in its broadest sense – not just patents but confidential information, copyright, trademarks, know how etc. – all the intellectual property rights) is fundamental to successful commercialisation. However despite this many organisations see intellectual property as a secondary or even tertiary consideration. For example, most companies have a Fixed Asset register listing cars, desks and LCD monitors, but few have any record, let alone active management, of potentially high value intellectual property such as trade secrets, copyright, trademarks or inventions.

The solution for companies is two-fold. Firstly, increase awareness and understanding of intellectual property. You can’t make effective decisions about intellectual property or leverage its value if you don’t understand what it is, how it works and its role in your industry. To begin with, you need to ask:

  • How much innovation or intellectual property do we have?
  • How much intellectual property are we creating on a daily basis?
  • Is it being used? If it is not being used, what is happening to it?
  • What is our true spend on intellectual property protection?
  • Are we generating revenue or value from that intellectual property?

Addressing these questions helps management take a measured view of how the business manages and utilises intellectual property. If the conclusion is – “we don’t” then you need to connect to an advisor who can help answer these questions and develop a robust and importantly, commercially orientated, intellectual property strategy.

Secondly, when your organisation does develop a great idea, invests in new R&D, files a patent or acquire a company it is critical to objectively assess the “Intellectual Property Position” of that idea, R&D, potential patent or company. Assessing Intellectual Property Position provides three key insights:
1. Are you likely to receive broad and strong intellectual property protection? This directly impacts both the commercial potential of the idea and the commercialisation options available.
2. Are you infringing on anyone else’s intellectual property? In other words are you likely to be sued if you use this technology? Unfortunately having your own patent does not mean you have freedom-to-operate (FTO) – you can infringe someone else even if you have a patent on your technology.
3. Provides incredibly valuable market intelligence: it reveals the state of technology development in your market or industry: who is doing what, when they were doing it, where are they now. It generates a list of people working on what you are working on: these are your potential competitors, collaborators, strategic partners, co-developers, licensees and licensors.

It is this combination of factors which provides critical early insights into whether a project is likely to be commercially successful. This leaves you better prepared to make a host of flow on decisions: a strong Intellectual Property Position justifies greater investment, more aggressive expansion plans, more extensive protection and makes strategies like licensing or intellectual property sale viable. Conversely a weak intellectual property position might cause you to redirect R&D, take a different strategy or even discontinue the initiative altogether to focus on other projects.

And a final word: in both cases it’s critical to seek independent and commercially relevant advice. In practice (and logically) this means your intellectual property strategy should not be defined by the person filing your patents or trademarks. If there’s one lesson it’s this: intellectual property is a critical business asset – managing it properly is a prerequisite for every aspiring business.

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