What is IP Strategy – A Guide for UK Businesses

Introduction

A brief overview of intellectual property

Breaking the term “intellectual property” or “IP” down into its component parts, the word ‘intellectual’ relates to products of the human mind or ‘intellect’. The ‘property’ element reminds us that, despite its intangible nature, IP remains a form of property like any other: just like a car, it can be bought, sold, rented, mortgaged or swapped.

IP is a broad church that can be split into five fundamental pillars: i) trade marks; ii) copyright; iii) design rights; iv) confidential information; and v) patents.

Trade marks protect words, logos and taglines associated with a particular brand. Copyright protects artistic works such as books, songs, films and photographs. Design rights protect the shape or appearance of a product. Confidential information protects trade secrets and patents protect a novel process or invention.

Introduction to IP strategy and its importance for businesses

It is easy for a company to assign monetary value to tangible goods like offices, desks and computers. The concept that IP might be just as valuable (if not exponentially more so) can sometimes come as a surprise to new entrepreneurs entering the market for the first time.

Each of the five rights grant you a monopoly over its subject matter (i.e. the right to stop someone else exploiting it without your permission). As such, IP is a fundamental part of any company’s balance sheet and having a clearly articulated strategy to identify, protect and enforce it should be as important to a company as its general business plan.

Who should create an IP strategy, and when?

Every business owner should have some type of IP strategy. That is because every business will have some form of IP (whether they know it or not).

As soon as a company starts trading, it should think about protecting its brand name with a trade mark (together with any other key brand signifiers like logos or slogans). Early adoption of trade marks in particular is important because you do not want to be in a position where you have spent significant sums on marketing a brand only for a competitor with a similar name to come out of the wood work and send you a nasty letter.

Once a company is up and running, any written materials it produces will attract copyright (as will pitches, photographs, blogs and videos). This copyright can be used to not only stop competitors from stealing them but also to licence it in order to create additional revenue streams for their brand.

If a company creates any tangible products, the way they look can be protected by design rights. These can be used to stop even innocent infringement (i.e. a competitor who happens to come up with the same design by chance).

Lists of the company’s clients and key commercial secrets can be protected by the doctrine of confidential information, whilst any particularly novel technical inventions or processes should be protected by way of patent.

What’s the benefit of developing an IP strategy?

1. Business valuation

Having a clearly defined IP strategy is a surefire way of understanding and making use of the true value of your business. Ensuring that ideas/products/services are protected helps convert them into tangible assets for the company, increasing its overall value and optimising its ability to generate profit.

2. Generating additional revenue streams

IP is both a sword and a shield: it can prevent competitors from accessing your share of the market whilst opening up new potential revenue streams; just like any other asset, IP can be sold or licensed to generate further capital for the company. An effective IP strategy will ensure that any initial expenditure involved in protecting the IP is offset by the returns generated by exploiting the IP.

3. Consistency in promoting business goals

Having an IP strategy in place is the best way to ensure that your business supports and remains focussed on its goals. This is because having a good IP strategy will detail and enforce active steps that the business needs to take from a wider strategic perspective whilst also giving employees a clear framework by which to operate.

How do you create an IP strategy?

There are four components that are crucial to every successful IP strategy:

1. An identification process

As a preliminary step, you should include an audit mechanism whereby key stakeholders sit down to discuss any new IP the company may have generated. Such an audit should be conducted at least annually (and for some businesses, as frequently as monthly). You should also include mechanisms to prevent the inadvertent disclosure of any IP identified outside the company (as e.g. patentable subject matter must be kept confidential).

2. Budget

Your IP strategy should have a clear budget detailing how many resources the company is willing to allocate to a particular form of IP (both in terms of human and financial capital). It is important to seek advice as to the realistic forms of revenue such IP can generate so that you do not spend more in protecting it than it is ultimately worth.

3. Market analysis

Your IP strategy should include a plan as to how these assets may be maximised to your business’s advantage. This would typically entail an assessment of any prior similar IP in the market, the territories in which you plan to operate and any similar goods/services which your competitors are currently offering.

4. Strategy Expert

Once your business’s IP strategy is laid out, it is imperative that you appoint at least one person (the ‘Strategy Expert’), with oversight for monitoring the strategy and ensuring that its key goals are being met at clearly defined intervals throughout the year.

What should an IP Strategy include?

1. Establish guidelines for the creation of IP

This involves listing every person involved in the creation of IP within an organisation, their role in creating the IP and how it reached its journey from inception to implementation. It is important to keep documents evidencing each iteration of the creation process, especially in the early stages where things can easily be misplaced.

2. Research and development processes

Once a business’s IP has been identified, it is important to then conduct further analysis to assess the following:

• has the IP been jeopardized in any way (i.e. have all people involved in its creation been employees and has it only been disclosed under an NDA)?
• does it actually meet the threshold to constitute that form of IP (e.g. some common terms are too descriptive to be a trade mark whilst any artistic works without sufficient ‘labour skill and judgement’ will not attract copyright)?
• are competitors using anything similar which could be a threat to that form of IP (and, if so, could they actually pursue your company for having come up with it first?) – if so you may need to conduct clearance/freedom to operate searches;
• are there any other third party organisations (e.g. Universities) that you could partner with to help exploit the IP to its maximum potential/share the cost of doing so?

3. Commercialization and Business Growth

Once IP has been identified and you have assurance that is safe to use, you then need to think about the best way to protect it. Questions that you may wish to consider at this stage of the strategy’s implementation include:

• do we prioritize one form of IP over another (e.g. different rights last for different lengths of time and can overlap – e.g. patents and design rights)?
• most IP rights are territorial in nature; what countries do we need to protect and are there any mechanisms whereby we can protect multiple territories in one go?
• do we have the right documentation in place in order to monetize our IP (e.g. asset purchase agreements, assignments, licenses)?
• once protected, do we have monitoring programmes in place to ensure that no one infringing our IP?
• If necessary, have we taken appropriate steps so we can enforce our rights (e.g. cease and desist letters, customs recordal, trade mark oppositions)?

As your business grows, a regular review of your commercial priorities is vital.  Likewise, your IP strategy should be continuously updated to keep up with current market demands and potential structural changes within the business itself.

Briffa comment

Here at Briffa, we have been lucky enough to assist thousands of businesses over the last 25 years with all aspects of their intellectual property.

We can assist you with creating a bespoke IP strategy tailored to your specific needs and provide fixed fees for the majority of the work we undertake in order to help give you the budget certainty you need.

If that sounds like something of interest, please do get in touch via info@briffa.com / 020 7096 2779 for an initial consultation (with no obligation).