From research and business creation to fight for defending IP rights: IP should be present all the way long.
Creating a new business is a process which starts with an idea and involved many stages before launching a new product or process on the market. Intellectual Property relates to all entrepreneurs during all this process (design phase, creation of the business, development). For example, the company operates brands for its products and services, which can include trade names, technical innovations, logos and domain names for example. All those creations or inventions can be protected thanks to Intellectual Property (see section “What is Intellectual Property”).
Whatever the product your company will make or the service it will provide, it is likely that the company will use and create a large amount of Intellectual Property regularly. Essentially, you should always consider the necessary measures to protect, manage, enhance and enforce it in order to obtain the best business results.
There are two forms of protection that may be applied to protect a work of art: design and copyright (see section “Types of Intellectual Property Protection Rights”).
Design can relate to creative and original designs or patterns which can be elaborated on clothing or furniture collection, appearance of a product, etc.
A business can also produce or help to publish, distribute or retail a work protected by copyright such as paintings, works of arts applied to industry, architectural plans, photographs, etc.
- technical characteristics can be protected by patents (see section “Types of Intellectual Property Protection Rights”),
- name of the product/service can be protected by trademarks (see section “Types of Intellectual Property Protection Rights”),
- aesthetic aspects can be protected by designs (see section “Types of Intellectual Property Protection Rights”).
Use of patent pools can provide attractive propositions in cooperation between firms.
Sometimes, acquiring by oneself the foundational knowledge needed to produce cutting-edge technologies is a costly; it can be much cheaper to take advantage of the experience of others. Collaborating with another firm is particularly useful when exploring new markets, geographies or technologies.
Other times, when two firms want to explore the same area of technology, dividing effort and sharing costs can also provide improved efficiency. It also allows firms to share development risks and undertake projects that might otherwise be considered too risky.
Negotiating agreements over the ownership and management of IP generated in collaboration is vital for a successful relationship (see section “managing collaborations and open innovation” and section “licensing and license agreement”).
A marketing strategy should establish a clear link between your products or services and your business, as the producer or provider of such products or services. That is to say, customers should be able to distinguish, at a glance, between your products or services and those of your competitors and associate them with certain desired qualities.
Intellectual property plays an important role in the commercialization of technological innovation and is an important tool for creating an image for your business in the minds of the customers and for positioning your business in the market. In particular, trademarks and industrial designs (see section “Types of Intellectual Property Protection Rights”) play an important role in so far as they enable consumers to identify the product or service of a given society and to distinguish it from other similar products or services.
Moreover, trademarks can be a very effective way to enter new markets and can also extend the business benefits beyond the term of a patent. Technological innovation can be well protected by a combination of patent, industrial design and trademark (see section “Types of Intellectual Property Protection Rights”).
Efficient use of IP rights, combined with other marketing tools (advertisements, sales promotion activities, etc) is crucial for:
- Differentiating your products and services and making them easily recognizable
- Promoting your products or services and creating a loyal clientele
- Diversifying your market strategy to various target groups
- Marketing your products or services in foreign countries
Before embarking on an export operation, enterprises go through a series of crucial steps such as:
- Identifying an appropriate export market and estimating demand,
- Finding channels of distribution,
- Estimating costs,
- Obtaining funds.
After this, SMEs can decide to operate in more than one market by selling products or services or licensing IP rights and know-how beyond the national borders.
Intellectual property (IP) issues should be taken into account while planning an export strategy. However, IP rights are generally territorial, so they are only protected in the country or region in which protection has been applied for and obtained. To enjoy same exclusive IP rights in foreign markets as in domestic market, it is necessary to carefully consider applying for IP protection well in time in all countries to which the SME is likely to export or license the product or service.
IP rights such as patents, trademarks and industrial designs (see section “Types of Intellectual Property Protection Rights”) may open up new export opportunities, may help position oneself in export markets and in winning clientele.
Merger and acquisition
Given the importance of both volume and financial aspects that intellectual property rights represent in a company, it is critical to understand how IPRs are involved in mergers and acquisitions.
Often, critical deadlines and workload related to an acquisition or merger transaction can prevent a business considering the global affect. It is therefore necessary to be informed in advance of risks and opportunities related to IP during these transactions.
During a merger or acquisition, the assets of a company must be taken into account, including intangible assets. These intangible assets are largely formed by conventional IP assets such as patents, trademarks, designs, copyrights, know-how and trade secrets (see section “Types of Intellectual Property Protection Rights”). It is important to see the transfer of intellectual property as an essential part of a larger transaction, which is not just limited to the transfer of intellectual property rights in themselves.
Writing an Acquisition Agreement details the terms and conditions under which the purchase of shares or the sale of assets will be made. In the case of intellectual property, the seller will usually be asked to make declarations and provide guarantees on intangible assets to be sold. Indeed, it is essential to check some points such as:
- Rights validity (patent, design etc)
- Well-made fillings (choice of classes for brands, protection in the relevant countries, priority period etc.)
- Rights holder (legal owner)
- Expiry date
In operations where IP assets are used in both the transferred business and the business that the seller retains, it is possible that licensing will be required between the buyer and seller activity.
In order to properly take into account intangible assets within the company, a valuation of these IP assets is required.
How to Protect Intellectual Property
When building an organization´s IP strategy and implementing it in a practice it is worth to keep in mind all the different protection methods, steps and rules one can have concerning IP and be sure not to infringe on others protection. When entrepreneurs launch a product or a service on the market, the best is always to check next four recognized rules:
- No other product of the same kind have the same trademark registered
- Your product doesn’t use an in force patent or utility model
- You don’t reproduce any design
- You don’t infringe any copyright/Authors’ rights/Geographical indication
Be careful, in some countries like the United States, software can be registered. So please check if other foreign countries may provide different levels of protection for your product or service and their registration.
If you are outsourcing some components of your product, make sure your business subcontractor has the appropriate rights concerning IP. Normally when signing a trade contract with a subcontractor be sure to always have a clause on IP rights.
Additionally, be careful on the countries targeted by your work – products or activities. Generally, an IP right is geographically limited, so you have to make sure where your market is and where you will sell your commercial products or services.
When you are sure your product is not infringing any legal law, the best thing to do is to protect yourself by registering your trademarks, patents, etc. In case of litigation, registered rights (where applicable), even if your trademark grow notorious, are easier to defend when at court.
If you think your product might infringe an IP right on a country, don’t always close the door to that country; you may find that you can negotiate licenses.
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Companies needs to make sure of the legitimacy of their requests in order to legally defense their ideas, know-how, secrets, interests and consequently IPR. Every country has its own enforced laws, jurisprudences and measures, which can be different enough from one country to another. For the Europe, you can study the enforcement section in national section of this website.
First (and easiest) action to take is trying to negotiate with the counterfeiter to see if he can either (three options):
- Remove their products
- Change their products
- Pay you license (read more about licensing)
Some countries like the UK have a mediation system offering a good guidance and tutorials that can help you through the process.
If negotiation doesn’t succeed, the next step will be to go to the police/customs or courts. Depending on where your products are counterfeited, the costs of this kind of operation can globally go from €10.000€ to €500.000 or more.
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