Why use IP?
Companies can increase their competitiveness in a variety of ways by dedicating time and resources to the protection of their Intellectual Property (IP).
IP assets are a source of value for companies and as such they should be managed as part of a business strategy. For instance, it can help to propel a company to a leading role in its business field.
- IP as a way to dissuade infringers
Many infringers and counterfeiters will seek to quickly establish how serious their potential victims are in protecting their rights. By enforcing its rights in a persistent and relentless manner, a company increases its chances that a putative competitor, infringer or counterfeiter will decide to look for an easier target elsewhere.
In many situations the possession of IP rights and the threat of court action may be sufficient to deter infringers, or even place a company in a competitively advantageous position.
- IP as an asset with a high potential value
IP rights, whether it is a patent, a design or other form of rights, represent an investment with an expected return. Therefore turning an invention into a marketable product and potential source of steady income is a crucial stage in the innovation process and IP rights help businesses to protect their market shares.
IP value depends on how well it is utilised. Adopting a systematic approach for the effective commercialisation of an innovation reduces the risks and maximizes the chance that investment will generate a good return. Furthermore, IP rights have a value per se and can be directly sold or “rented” through licensing to other businesses.
- IP as a source of competitor monitoring
Besides being an important tool for providing legal protection for R&D and commercial rights, IP can be a useful information source for SMEs.
For example, patents contain important technical information: A patent document provides information about an invention that has not been published before. The applicant must give a detailed description of its invention in a clear and complete way with examples of industrial application and information about the technological context i.e. other patents in the same field.
It also permits identification of the inventor and the patent owner. A patent classification system facilitates retrieval of patents within a specific technology field (click here for more information on patent classification).
Patents and designs will also indicate current innovation trends. The patent literature is therefore an effective tool to avoid parallel developments and R&D efforts in an overcrowded research field.
Also, patent and trademark filings can give an insight into competitors' marketing strategies. In other words, IP information is valuable in all aspects of company activity - research, development, manufacturing, commercialisation and overall management.
- IP as a source of innovation
Patent information sources should be used by organisations in their research and development for any of the processes below:
- Investigating the "prior art" (see section "Which kind of IP right? - Patent") of a technology,
- Finding emerging and cutting edge technologies,
- Identifying possible fruitful areas for research,
- Identifying areas where research effort would be wasted because of e.g. duplication, established dominance by other companies etc.,
- Finding possible competitors (reference to part 4.1.b) or partners (reference to part 2.4),
- Investigating existing patents for legal purposes e.g. possibilities of infringement,
- Identifying technology transfer/licensing opportunities (in or out). (reference to part 4.1.e)
- The risks of non-protection
By ignoring and/or undervaluing IP’s potential, business can be driven into risky situations. Neglecting the registration of IP right opens up the possibility of competitors taking advantage of your technical innovations, business ideas, goodwill and reputation in the market, etc.
A business which has not protected its rights may expose itself to several difficulties, for example:
- loosing the opportunity to forge business alliances,
- weakening a negotiating strategy,
- the possibility of arranging profitable licensing deals may be considerably reduced,
- business ability to obtain capital or investment finance may be eroded.
- PDFs and links
For more information on the different kinds of IP rights: see section "Which kind of IP right?"