No more filing monkeys

IP protection should be a means to add value to a business, not just for attracting investment, but also as a revenue generator through licensing and other arrangements, says Rachel Colley.  

Intellectual property is the ‘new’ black. These days you can hardly open a business publication without reading about the importance of IP to a business and the value it can add.

The ‘take home’ message typically seems to be, ‘fail to protect your IP at your peril!’

And, by ‘protection’, the articles recommend filing applications for registered protection.

As a consequence, IP lawyers and patent attorneys appear to have garnered a somewhat unsavoury reputation for themselves; that of money-grabbing, filing monkeys, whose sole purpose is to encourage clients to embark down the costly patent protection pathway with scant regard for strategy and value add.

For the avoidance of doubt, this isn’t one of those articles.

Yes, seeking patent, or other registered, protection can be a perfectly valid strategy but the keyword here is ‘strategy’! IP protection comes in varying guises and there definitely isn’t a ‘one size fits all’ model for businesses to adopt.

I’d like to encourage you to think differently about IP.

IP shouldn’t be viewed passively. It has to be actively managed from within the business. We urge you to put systems in place to identify IP within the business, to track its development, and for auditing purposes. You can’t deal in what you don’t own, so, if commissioning third parties during the development phase such as designers, researchers, engineers, and manufacturers, make sure you use appropriate agreements stating you are the owner of any IP developed or created by that third party, that this IP will be assigned to you by the third party, and also detailing how identification of IP will be managed.

In addition to dealing with IP ownership issues contractually, keeping a record of the IP’s evolution in the R&D phase helps to confirm the business’ ownership of the IP and reduce opportunities for ownership disputes with third parties.

Once the business has identified and captured its IP, it needs to make it work. Your aim is to develop a cohesive IP strategy that fits with the business’ needs and objectives, both immediate and future, and importantly, with the business’ budget.

To file, or not to file?
While owning IP registrations undoubtedly has merit, it is certainly not the ‘be all and end all’ to making IP work for you. Often filing for registered protection will not be appropriate for a business. Things for a business to consider include:

• What is the timeframe to market with the product/particular technology? A short timeframe to realise a return on investment might not suit a patent filing strategy.
• What is the product value? Low value products might not justify filing costs.
• Does the right applied for give sufficient value to the business to justify the expense? For example, a very narrow trade mark limited as to colours and/or in a logo format may not provide sufficient value to justify the application costs.
• Is the business looking for investment? Investors may look favourably on IP filings as they typically increase the business value.
• Will holding registrations deter competitors?
• Can the product/technology be adequately protected by other means? For example, as a trade secret.

Although securing IP protection has traditionally been seen as a means to monopolise a particular marketplace and block competitors’ activities, perspectives are now shifting and IP protection should be seen as a means to add value to a business, not just in terms of attracting investment, but also as a revenue generator through licensing and other arrangements.

Sometimes a little creativity in IP ownership makes good financial sense. Remember, it is not always necessary for the business to own the IP.

For example, consider varying ownership models. Consider allowing a third party to own the IP for non-core areas to your business or, instead, consider allowing for third party ownership of the IP with a licence back to the business to use the IP in your business’ core areas. This can reduce your IP spend (in not having to pay for registered protection) or, licensing revenues can allow you to recoup IP protection costs.

As well as licensing out its IP, businesses should consider licensing in third party existing IP. Not only can this save on R&D but also on costs otherwise spent in securing registered protection, and reduce time to market.

As your business evolves, your IP requirements will also change. Your IP strategy should not be static. Regularly audit your IP portfolio and ask whether it fits with your current business strategy and is adding value. Be honest. If it isn’t, consider selling it on. There is no point in holding on to unused IP.

In addition to actively managing your IP, you need to actively manage your IP professionals. To get the most out of your professionals, we recommend involving them early on in the product/technology development process.

In our experience, this allows us to gain a better understanding of clients’ businesses and their objectives, so as to be able to offer tailored, pragmatic, commercial advice.
Avoid having a merely transactional (filing chimp) relationship with your IP professional.

If filing is all they recommend, move on.