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Hints To Harness Your IP In The Innovation Age

By February 14, 2022No Comments

For enterprises of all kinds, emerging or established, your intellectual property (IP) is one of your most valuable assets.

In 2021, intellectual property was recognised as the most significant driver of company growth and value. IP rights are also the bedrock of trade and investment in an era where innovation and creativity are central to competitiveness. In a study published by IP Australia, it was found that “on average, SMEs that own IP rights are around 2.5 times larger (in terms of number of employees) than their peers without IP rights, are older and pay a higher median wage.”

So, if you’re uncertain about exactly how to identify and maximise the worth of your precious intangible resources, it would be wise to speak with an expert today to ensure that you are in the best position to grow, exploit, and protect your IP to the highest degree, now and into the future.

Getting your IP in order

As a business owner, you have huge amounts to juggle, and prioritising is a must. Being as stretched as you are, it is tempting to put certain tasks on the to-do pile. However, it is critical to remember that your company’s IP is the very essence of your business, shaping and driving your purpose. Given that it is so central to your success, it stands to reason that must be at the very top of your priority list.

Managing your IP portfolio is not a one-off task. It is an ongoing undertaking that requires thought, knowledge and attention. Throughout the life of your business, many ordinary situations and business scenarios will present challenges and risks to your IP, from bringing new people onboard, to the way you promote your business. You will need to manage each of these and many other situations in a proactive way.

Because managing and protecting your IP is such a dynamic, complex and continuous process, we have collated key information to help you implement the best practises, and make smart IP decisions.

  1. Understand the basics

Intellectual property is a complex and dynamic area which can be daunting. While certain aspects will require the skill and expertise of an experienced IP attorney, as a business owner you must ensure that you have a broad understanding of your intellectual property as well as IP laws more generally, and that you are equipped to understand, manage, and implement your IP plan.

To ensure that you maintain your protection, you and your team members are informed on relevant IP fundamentals. This includes issues rights and obligations relating to trade marks, copyright, patents, designs and trade secrets. Once you have a comprehensive understanding of the basics, and know exactly how your assets fit within the IP legal framework, you are in a strong position to recognise weaknesses in your approach, identify risks, and also better exploit your assets.

  1. Undertake an IP audit

It is not possible to safeguard and manage your IP without first identifying it. An IP audit is a systematic evaluation of each of the IP assets that your business owns, has used, or has acquired. IP audits should be automatic calendar items, occurring at intervals that best suit your business operations.

In the course of your IP audit, you will identify both internal, and external IP assets.

Your internal IP assets consist of:

  • registered trademarks, copyrights, designs and any patents that you own
  • licenses (including products that you license from another entity, and any that you license to a third party)
  • internal work or operation manuals, business publications, training documents, databases and software, recipes or formulae
  • trade secrets, personnel knowhow or confidential information

Your external IP assets include:

  • brands
  • goodwill
  • product certification and authentification, regulatory and other approvals
  • distribution and other contracts, networks client lists
  • marketing and advertising programs.

Once every IP asset has been identified, you can then assess the legal rights that attach to each item, and then, with reference to your business plan, decide which of these assets actually deliver a commercial advantage to your enterprise. Estimating the real value or advantage of each right is not an exact science. However, as a business owner you will have a strong understanding of the significance of each item in your business, and be able to identify its worth, for example, how much a replacement would cost if it were lost, or how much income the particular right generates.

  1. Build an IP strategy

A sound IP strategy is a complex and ongoing plan of management that requires dedicated leadership. This person might be you, or it could be a trusted member of your team who has the necessary skills and knowledge.

As part of your strategy, you will:

  • identify your core IP
  • establish goals and integrate them with your business plan
  • utilise the IP system to your advantage
  • identify risks
  • have a strong understanding of competitors and market developments to avoid infringing others rights, and to be aware when they are infringing you
  • undertake a cost benefit analysis for each IP item.
  1. Register your IP

Registration is not always necessary to obtain the particular advantages or protections that you are seeking in every case. However, it is a must when it comes to enforcement, and there are also a number of valuable rights that accrue to you once you register your IP.

Protecting your IP delivers an exclusive property right, enabling you to use, sell, assign or license the IP exclusively. This not only opens up opportunities for additional revenue, but it also increases the value of the IP and adds to your business worth.

As a valuable asset in itself, registered IP can also be used to attract investors and maintain cash flow. It can also reduce risks and downfalls associated with commercialisation, as it is a major deterrent to competitors who might be thinking about using your IP.

Once you have identified your assets, you need to consider which items most need to be registered, and in which jurisdictions this protection is required. If you operate globally, you may need to secure trade marks in several jurisdictions. A skilled IP attorney can navigate and manage the wide-ranging requirements of different jurisdictions.

Patent, trade mark and design protection

Broadly, a patent is a right granted for an invention that is new, useful and involves an inventive step. Patents protect the end results of research and development (R&D) activities, where they satisfy those criteria.

Examples of patentable include new devices, substances, methods or processes. Once you have been granted a patent, you have a legally enforceable right to prevent competitors from exploiting your invention, for the life of the patent. In Australia, this is usually a maximum of 20 years from the application date, provided renewal fees have been paid.

A trade mark distinguishes your goods or services from those of your competitors. It can be a word, image, logo, colour, shape, or even a sound, as long as it is “distinctive”. As the owner of a registered trade mark, you are able to prevent others from exploiting the particular sign (or a similar sign) within the same business area. Trade marks are integral to commercialisation for many businesses.

Upon registration, a trade mark will have a period of protection of up to 10 years. This can be renewed indefinitely as long as renewal fees are paid.

Design registration protects a product’s visual features, including its shape, colour, configuration, pattern, and ornamentation. Like trade marks, part of a design right’s value is linked to its ability to distinguish a product from those of competitors. Design rights can also encourage investment.

  1. Confirm ownership and correct use

Part of your IP strategy involves incorporating your IP plan into your employment and other contracts. This means that employees should sign carefully drafted confidentiality agreements.

In the case of contractors, you must also ensure that rights have been transferred. For example, if a contractor is developing software, make sure that the source code is assigned to you.

  1. Non-disclosure agreements

Confidentiality provisions can be included in consulting, employment, and contractor contracts. Even founder agreements should include these provisions to ensure that your enterprise is protected in the event that a co-founder who has knowledge of ideas, concepts or other intangible assets, leaves your organisation. You should also maintain clear chain of title records for any intellectual property used by your enterprise from the point of establishment.

While non-disclosure agreements are “non-negotiable” for smart innovation enterprises, you must remember that they are not foolproof, and it is important to plan for human error. There are many circumstances in which startups or new employees risk accidently disclosing confidential information. So, in addition to ensuring clear confidentiality provisions in employment and other contracts, and having other agreements in place to protect sensitive and valuable information, make it a rule to leave discussions of potentially valuable IP until decisions are made and protections are in place.

  1. Maintain records of licences and approvals to third parties

Once you have identified the full list of your IP assets, you will need to identify who you rely on both internally and externally to maintain your operations. Once you have your list, you need to decide what steps to take to protect each IP asset in relation to each and every relevant third party.

Rather than approaching this task as an “ad-hoc” task, make sure that you maintain a comprehensive system for documenting the grant of licences and approvals to third parties. In the event of an infringement, this enables you to establish that a third party did not in fact have permission or consent to use your IP.

  1. Maintain internal IP protection systems

Strong internal systems are the mainstay of your IP protection plan. To keep your plan up to date and functioning you should:

  • implement a document management/record keeping system.
  • develop written guidelines and educational materials for staff on IP generally, and on the risks of unauthorised disclosure
  • secure adequate IT and internet security and policies
  1. Protect your IP online

As your business grows and your reach expands, not only does your IP become more valuable, potential for infringement of your IP rights also increases. For this reason, it is important to put measures in place to discourage misuse:

  • on your website, include a section that clearly states the terms and conditions for use of your material
  • clearly acknowledge where your business is using IP that it does not own
  • use tools such as ‘watermark’
  • use disclaimers

Develop an infringement strategy

An infringement strategy is an assessment of each of your IP rights, establishing the point at which you will begin infringement action in the case of misuse of your IP, a plan for the course you will take, and a clear understanding of the point at which you will conclude your action, taking into account benefits and costs.

Like to develop a strategy to protect your IP? Contact us now