IP: make it part of your strategic growth plan

Management

A robust Intellectual Property portfolio can help companies to strengthen their market position and attract investment argues James Gray at Withers & Rogers

A robust intellectual property (IP) portfolio can help companies to strengthen and maintain their market position and potentially attract investment. It can also help to mitigate risk when exporting products overseas. But are businesses prioritising IP strategy and using it to deliver their growth plans?

Businesses may need an IP strategy for a variety of reasons, depending on how innovative they are, what products or services they are making and/or offering, and where.

For some, building a robust IP portfolio comprising Registered Designs, Patents and Trade Marks is primarily about protecting their core intellectual assets and providing them with rights to enforce against infringers. Others may be seeking to raise their profile in key markets and ward off potential infringers by accruing as many IP assets as possible, domestically and in as many overseas markets as they can.

Instead of viewing IP as a key part of a company’s growth strategy, innovative businesses can sometimes overlook its importance. They may lack management resources to dedicate to IP matters, causing them to slip down the corporate agenda. Such businesses might only recognise the value of a well-managed IP portfolio at the last moment – for example, when planning to collaborate with a third party or preparing a business for sale.

Building a robust IP portfolio requires a planned and considered approach. The opportunities and risks facing one business are rarely the same as another, and a long-term IP strategy, which is aligned to the company’s growth plan, is required at the outset.

For a startup, for example, it’s important to protect the company’s brand identity – its trading names and logos, in all key markets. If the business is focused on innovation, it should consider protecting any core technologies and any aesthetics associated with their end products, by applying for Patents and Registered Designs. If the business is reliant on third-party funding to support its growth strategy, IP assets can boost investor confidence by providing some assurance that a competitor can’t simply step in and copy the company’s products without risk of being sued.

As well as protecting a company’s market position and mitigating the risk of core technologies being reverse engineered, IP assets can drive revenues and optimise value over time. A granted Patent gives the business a right to commercial exclusivity for a period of 20 years. This window of exclusivity offers a competitive business advantage and allows them time to recoup some of the value of their upfront R&D investment.

If a growing business lacks manufacturing capability or the capacity needed to meet its expanding production targets, it may choose to license its patented technologies to other businesses in order to fulfil market need. There is a trade-off involved in taking this decision, as the licensor would receive a licence fee that is less than the profit it might have generated by making and selling the product itself.

Keeping IP strategies under review is important for innovative businesses of all sizes. An effective IP strategy should evolve with the business, ensuring things are done at the right time and in the right way.

For example, for innovation-led businesses investing in R&D programmes, patent mapping can help to guide innovation activity and IP checks and clearances should be carried out ahead of product launches on a country-by-country basis.

The company’s R&D team and senior executives may also need to avoid early disclosure of an innovation to, for example, potential customers, as this could make it impossible to secure Patent protection for a new product and limit its commercial potential.

At a time when many manufacturing businesses are focused on reshoring to improve their operational resilience, IP strategies may need to be tweaked to reflect changes to the company’s organisational footprint. For example, if a company has a manufacturing facility overseas that it wants to bring closer to the UK, it could potentially reduce costs by not going ahead with Patent renewals in that country.

Regular IP reviews provide a valuable opportunity to step back and re-evaluate whether protection is still needed for specific technologies, in specific territories, and efficiencies can usually be achieved.

Regardless of whether a business is starting out, planning to scale or expanding into new markets, IP has an important role to play in helping them to achieve their goals. As well as mitigating the risk of commercial litigation, an effective IP strategy that is fit for purpose can optimise revenues and secure the company’s growth trajectory.

James Gray is a partner and patent attorney in the Advanced Engineering group at European IP firm, Withers & Rogers.

Main image courtesy of iStockPhoto.com and May Lim