The various forms of intellectual property are essential assets for your company. Learn about using selected forms of IP strategically in concert with your business plan.
Founding a company is an exciting time. It's a busy time. And there's a lot on your plate. One of the things you have to pay attention to is intellectual property. I know it's a little bit geeky, but it's important to your business. It's important to the success of your business and you have to pay attention to it really in two respects. The first is if you care to think of it as offense. You need to be developing your own arsenal of IP assets that you can use to defend your position in the marketplace. The other side, think of it as defense, if you like. You need to pay attention to avoiding infringement of other people's intellectual property. They're smart people too, and they are working hard. And they are developing their own arsenal of I.P. assets just to give you a problem. A recent study found that over half of patent lawsuit defendants have annual revenues of less than $10 million. So if you think that you're below the radar screen and you won't get noticed you're wrong. They will find you. They will come after you. And that's a distraction and an expense that you need to avoid. So paying attention to your own I.P. assets, paying attention to avoiding the infringement of others' I.P. assets, these are the things that you need to pay attention to along with everything else you've got going on as you develop your product and your company.
So what do we mean by I.P. or intellectual property? Well, there are a number of different forms of intellectual property. But what I want you to have in mind is intellectual property has to be developed in accordance with a strategy, an I.P. strategy. Your I.P. strategy has to support your business plan. As your business plan mutates and develops, your I.P. strategy has to follow along. It's not an end in and of itself. Your IP strategy is a support vehicle for your business plan.Intellectual property assets are going to be vitally important for your company. And you have to have in mind that not properly created and protected and used, intellectual property assets can be lost. You can't afford to lose assets in a company, I.P. assets especially. So we want to pay attention to creating them and protecting them and using them properly.
You know most of the forms of intellectual property. You've heard them and you may be very familiar with them. The primary forms are patents, copyrights, trade secrets, trademarks and contract rights. You'll have contracts with suppliers, with customers, with others, with employees. These contract rights really are in the nature of intellectual property rights. We'll understand that better. The point you have to have in mind is that integrating these various forms of intellectual property together is far more powerful than any one alone.
You need to work with counsel to determine which forms of intellectual property protection are most suitable for your company and your budget and how to integrate them together, maybe some patents together with some copyrights and some trademarks.
So what are we going to do to get you in good shape on the I.P. front? We're going to have an intellectual property strategy in place for your company. We're going to have a strategy in place to capture and protect and use your intellectual property assets properly. And we're going to have a strategy in place for avoiding the intellectual property assets of others.
Dickson, Mark, ed. Marketing Your Invention, 3rd Ed. New York: American Bar Association, 2009.
Fahmi, Tarek N. Aligning IP Portfolios with Business Objectives, 2010.
Razgatitis, Richard. Early-Stage Technologies: Valuation and Pricing. New York: Wiley, 2003.
Palfrey, John. Intellectual Property Strategy. The MIT Press: Cambridge, MA. 2012.
The World Intellectual Property Organization (WIPO) has materials providing IP guidance and resources for entrepreneurs and enterprises. The following is a sampling:
- Intellectual Property and Small and Medium-Sized Enterprises (“[E]nterprises which search systematically for conflicting IP rights of others prior to seeking IP protection are able to avoid unnecessary litigation, thereby saving time and resources.”)
- Intellectual Property and E-commerce: How to Take Care of Your Business' Website
- Intellectual Property Manual for the Engineering Team (2009)
- IP Management: A Practical Guide for Electrical and Electronics Related Industries (2007)
Questions for You
Which forms of intellectual property are - or may over time become - important to my business? How does protection of IP relate to the goals I have for my business?
What technology will I need to realize my business plan? How will I develop or otherwise acquire that technology, and how will I determine whether or not I have the necessary IP rights to use that technology?
Viewing IP assets (technology, customer and supplier lists and other trade secrets, trademarks, etc.) as competition tools to give my business a measure of exclusivity in the marketplace, which forms of IP are likely to be the most cost-effective?
Do patents have marketing value in my industry as a credential or indicia of value?
Questions for Your Team
What technology developments and other work product are we creating in our work? How are we recording or otherwise capturing this work product.
How will our work product be important to achieving the strategy of the business? How can we secure IP protection for our work product? How do we determine whether or not the value of securing such IP protection justifies the expense?
Tools and Exercises
Identify a technology development or advancement (“NewTech”) you have or plan to achieve under your business plan.
Identify the forms of IP you believe are potentially applicable for the protection of NewTech.
Assess the competitive advantage your business would obtain in the marketplace from any exclusivity the various forms of IP would provide in NewTech.
Seek a brief consultation with IP counsel regarding the accuracy and completeness of your answers to questions No. 1 and 2; and the likely cost of securing each applicable form of IP protection for NewTech.