Most businesses may focus on product development, fundraising, and customer acquisition when launching or scaling. Investor pitches, marketing campaigns, and sales targets likely take center stage while intellectual property (IP) hovers in the background — overlooked or misconceived. Undervaluing IP, however, means leaving significant business opportunities untapped.
Innovation drives today’s economy. It could be a unique business process, a revolutionary algorithm, or a groundbreaking invention. These intangible assets, or intellectual property, can create competitive advantage and drive long-term value for any business. They can also open doors to lucrative opportunities, like partnerships and licensing deals. As such, they need to be safeguarded from unauthorized use.
In addition to generating revenue streams and securing a competitive advantage, prioritizing your company’s IP can also protect confidential business information. IP protection further shields your brand from being misused or copied by other entities.
Failure to safeguard your business’s IP assets could result in protracted litigation. The litigation will naturally come with financial consequences and, in the long term, damage your brand.
Consider how some of the world’s most recognizable brands have had to deal with IP infringement:
- Apple vs. Samsung in a patent dispute over smartphone design. A jury awarded Apple $1 billion in 2012, but Samsung appealed the case and settled for an undisclosed figure in 2018.
- Warner Bros. vs. 20th Century Fox over distribution rights to the movie-screen adaptation of “The Watchmen.” Warner Bros. settled before the trial and paid 20th Century Fox an undisclosed sum.
- Mattel vs. MGA over IP infringement that covered copyright, trademark, and trade secrets. After years in litigation, a court awarded Mattel $100 million. However, the ruling was overturned on appeal, and MGA retained rights to its Bratz brand.
Intellectual property can take many forms: symbols, designs, logos, creative work, artwork, etc. Protecting these assets against others deriving value from them must be a key part of any business’s growth strategy. Part of an effective IP strategy is identifying which category your assets fall under.
Patents
A patent is a property right that safeguards inventions, granting the inventor exclusive rights to them. These rights, however, are limited in time. The invention could be a process, design, an improvement, or a physical invention. It can even be for something complex, like biotechnology, in the Centocor vs. Abbott Laboratories case. Centocor’s patent was for genetically engineered antibodies, which the pharmaceutical company developed to treat autoimmune diseases.
Copyrights
A copyright grants the exclusive right to use, copy, or duplicate the creator’s or author’s original material. Creators or authors can authorize anyone to use their creation through a licensing agreement. Copyright isn’t limited to creative works, like songs, novels, plays, photographs, or choreography.
Businesses that have developed original content, such as software code, computer programs, advertisements and marketing materials, architectural plans, and multimedia content, can also get copyright.
Typically associated with a company’s brand, trademarks distinguish a business from others. It can cover insignias, symbols, and even phrases that are recognizable and represent a specific company. No other entity or individual can use a company’s trademark.
A trademark can also cover product shape, which was at the center of the Coca-Cola vs. PepsiCo IP infringement case. Coca-Cola argued that PepsiCo had infringed on its trademark contour glass bottle. The former, however, lost that case after a court in Germany determined that PepsiCo did not illegally resemble the contour bottle.
Trade Secrets
Trade Secrets cover a company’s practices or processes, usually under research and development departments. Protection under trade secrets also includes formulas, patterns, designs, customer lists, and any other proprietary business information. One way businesses protect against unauthorized use or exposure is through non-disclosure agreements (NDAs), which employees must sign.
Some more recent cases of trade secret infringement involved stolen information on autonomous vehicle technology. Google accused Uber in 2017 of stealing its self-driving technology. Apple sued an engineer for stealing confidential files on its autonomous vehicle project.
Leveraging Your IP Assets
Up to 90% of a company’s value is reportedly linked to intellectual capital. However, without an effective strategy, IP assets will fall short of contributing to the bottom line and growth.
When building and protecting your IP portfolio, start with a legal consultation. Because IP laws differ in each country, with implementation and enforcement varying according to national laws, work with a relevant firm. For example, companies operating in the Kingdom of Saudi Arabia should consult with a law firm in Saudi Arabia.
Most businesses will need licensing agreements, franchising agreements, trademark applications, or IP due diligence. In the event of infringement, a law firm specializing in IP protection can provide trade secret litigation, trademark litigation, or domain name arbitration.
Your law firm may also support your IP audit. It will assess and document your assets to identify opportunities and weaknesses for protection and monetization.
Adequate protections in place and legal support are just the starting point of leveraging your IP assets. Take full advantage of your assets by taking proactive steps.
- Monitor the market to identify potential infringement, and do it systematically.
- Ensure that all levels of the company are aware of IP assets.
- Take legal action promptly to prevent further unauthorized use of your IP assets.
- Create an IP committee and develop governance to inform its process.
- Turn to your law firm for trademark enforcement and anti-infringement strategies to maximize the value of your assets.
- In relevant agreements, such as employment contracts, vendor agreements, and partnership contracts, incorporate IP clauses as recommended by your law firm and according to national laws on intellectual property.
Business assets go beyond physical properties. In most cases, intangible assets hold the most value. They could be a proprietary formula, a unique software code, or a groundbreaking design. Whatever innovation your business has come up with, it will need the appropriate protection against unauthorized use.Engaging a business consultant can help you identify, value, and safeguard these assets strategically, ensuring they align with your overall business and growth objectives.
Although this step is a legal necessity, your intellectual property strategy can do more than shield your business from risks. By understanding how to identify, protect, and strategically use IP, your business isn’t just asserting its legal right; it’s also implementing an effective growth strategy.
