IP STRATEGY: THE BEST TIME FOR YOUNG ENTREPRENEURS TO BE SAVVY
Extracting value from intellectual property has both tactical and strategic implications. The strategic impact comes from being able to manage the intellectual asset generated by the company, and the tactical implications are rather about how the organisation operates those intellectual assets that lend themselves to legal protection.
When it comes to developing an overall IP strategy most management fail to see IP as a significant business asset and the ones that do seldom have IP management strategy that fits for a purpose. What is common is to seek an ad-hoc intellectual property solution which is costly and utterly inefficient.
Intellectual property is the source of the current value of a company. Therefore, a proactive and comprehensive approach should be considered; waiting till you raise funds before considering IP management is like hailing a speed train as it approaches its final destination.
The core of any company’s IP strategy should be parallel to its current and future market entries and the type of product or service taken into that market. Therefore, a cost-benefit analysis should always be undertaken before market exposure.
- IP strategy is a living document. You can not completely crystal ball everything
- The direction must come from the CEO, buy in from internal management and business alignment.
- Having a protected intellectual entrepreneur asset (IEA) is not a strategy. You need to create channels
- Selecting investment opportunity: most important thing is not a patent — it is whatever offers economic moat
- “Co-opetition” = working together to facilitate reaching own goals
- IP Strategy must be geared towards providing solution that market demands otherwise your IPR is no use
- Larger IP-owning company should see litigation funding as a way to take risk off balance sheets
- Your IP portfolio must not exist in vacuum, consider current & future markets & competitor presence
- Understanding IP landscape is essential to developing IP strategy for innovation-led businesses
- Innovation is about generating new things but also about renewing old things & disrupting old ways
The essence of formulating an IP strategy is to be able to align a business with its source of value and the delivery methods of these value. Occasionally a company’s fundamental purpose of existence could be the source of IP combined with it the novel model of business delivery. A company can successfully use its IP portfolio to alter the behaviour of it current competitors if the company is successful in doing that quarters after quarters — it will not be long before the competition becomes a one-horse race.
Another aspect of a proactive IP strategy is that it does not limit a company to the market in which it operates, unlike a company without IP strategy. Intellectual property right allows an enterprise to have presence in many markets through systemic IP licensing
Forces outside the industry and indeed those within the industry will have some effect on the company’s IP strategy and how to execute. If the company is “late to a party” such company will be forced to adopt a reactive IP strategy rather than a proactive one, sort of like if you turn up late to a Christmas party you may end up with the crumbles as oppose to the pie. Success driven businesses should focus on R&D as early as possible so that it can build a wall against the outside force or at least have a significant portion of the whole “pie.”
The industry landscape has an important influence on determining the way a company think about its IP strategy and the available IP tools to use. The position of many companies in a given market is neither a coincidence nor by luck.
The major strategic thinking that must precede the design of any IP strategy is: where is the value being created, and which activities are not adding to the overall enterprise value? And, in turn, identify the element of your value creation channels — the products, processes and subsystems.
Good luck with your business!