There is never a bad time to evaluate your intellectual property (IP) strategy. When most people think of IP, they think of issued patents and registered trademarks. However, IP strategy is not simply about getting a patent or a trademark, nor is it about portfolio numbers. It is important to take a wholistic view, evaluating market positioning and competition, and treating IP as a strategic business asset.
Up to 80% of a company’s valuation can come from its intangible assets. This is not surprising when one considers the exclusivity provided by a patent or the price premium provided by a brand. Since a majority of a company’s value can be derived from IP, every department can be involved in strategy. For example, sales can assess market competition and collect feature requests (e.g., potential new inventions). Marketing can highlight technological and brand advantages. Research and development can identify new discoveries. Engineering can implement design arounds. Finally, operations and finance can pull it all together with a strategy that maximizes value and minimizes risk.
Developing an IP strategy can start with a self-assessment. First, identify your company’s top technologies/brands. Is your IP adequately blocking direct competition? Are there opportunities to create value with additional protection? This may be the easiest way to add immediate value. Next, identify your competitor’s top products/services. Are they protected by IP and, if so, does that create any issues for your technologies/brands? Do they infringe your company’s IP? Then, evaluate how your company is doing in comparison with top competitors. Do the relative portfolio sizes compare favorably? Is there any IP in a competitor’s portfolio that is concerning? Are you continually monitoring competitors’ marketing and IP filings?
The answers to these questions can drive your IP strategy and planning for subsequent action. The goal should be to use IP to create a moat for competition, but this is a business moat and not a product/service one. Moreover, IP strategy ties together various activities, from prosecution to litigation to deal making. It may involve new IP filings, challenging the IP of competitors, securing legal opinions to avoid willful infringement, and pursuing licensing opportunities.
Given how IP touches every part of a company, it follows that there are numerous motivations to protect IP, from marketing oneself as an innovator to mitigating legal liability. IP strategy should consider both internal strengths and external threats. Weaknesses can be turned into advantages with design arounds and clear product design. New areas for protection can be identified in gaps in competitors’ portfolios. And the best defense may be a good offense that enforces IP rights or challenges competitors’ rights. If you are not engaging your counsel to pursue a comprehensive IP strategy, you may be wasting your money and falling behind the competition. IP strategy is more than just obtaining a patent or trademark.
WHIPgroup is leading counsel for U.S. and international companies. We specialize in patent and trademark law. Our attorneys do both prosecution and litigation, providing a unique, wholistic perspective for solving business and legal problems.
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