The Power of Intellectual Property
As the world becomes increasingly more connected, so does the competitiveness between businesses, nations and their need to keep up with innovation.
A new reality of global marketplaces, volatile consumerism, work force outsourcing and shorter products life cycles; has put a greater demand on achieving more with less. These trends are now shedding a new light on the importance of the value creation chain and its impact on all market participants. Meanwhile, the measure of added value is in most cases still associated with the ability to quantify and trade creativity, intellect and other intangibles.
However, as these tasks are quickly being replaced by ever evolving automation processes and intelligent machines, a greater consideration must be given to the management of those underlying assets.
The management of intellectual property (IP) and other intangibles is becoming more important in a world where businesses success is measured by their ability to innovate and/or capitalise on innovation. Such fierce competition can often lead to prominent lawsuit cases such as Apple vs Samsung.
The intangibles that add value and differentiate one product from another can be protected by Intellectual Property (IP). This protection can further be turned into proprietary rights thus according an exploitation exclusivity to their owner and allowing him/her to prevent anyone else from using and leveraging their innovation.
Exploiting IP Assets
- Direct Use: Core to the competitiveness of the product or service
- Indirect Use: Sale, license, franchise or merchandise–Joint ventures and strategic alliance
- Other possibilities: Defensive patenting, publication
- Finance: IP as a collateral to raise finance
Direct commercialisation of intellectual property (IP) assets enables the owner to maintain control and competitiveness and can be the most adequate strategy to adopt in cases of:
- Direct production and distribution.
- Direct merchandising.
- For exhibition in fairs, online catalogues, etc.
- To enforce the IP rights against infringes.
These options provide direct quality and exploitation control; but however, exposes the owner to higher cost and risks.
Indirect Commercialisation of intellectual property (IP) assets enables the owner to mediate the exploitation to third parties based on contractual agreements. This strategy offers a few advantages such as:
- Low investment / Low risks.
- Potentially high return.
The drawback is that, special attention must be given to contracting when the exploitation is delegated to third parties through the assignment of IP Rights or licensing.
Licensing can be a very effective for:
- Strategic, core technology or patents.
- Non-core or “mature”technology and patents, products.
- Struggling businesses or products (new or mature).
- Technology that can be applied to other markets.
- Trade marks, designs, copyright, know-how and any other combination.
Key steps to follow when licensing
- Protect your IP rights
- Find right licensee
- Assess foreign markets
- Tailor scope of license to actual needs of licensee
- Preserve control over the commercial use of your works
- Negotiate fair compensation
- Draft a solid license agreement
- The management of licenses.
Franchising
This strategy refers to a special license, where the franchisee is allowed by the franchiser to use a particular business model, licensed in a bundle of IP Rights ( TM, service marks patents, copyrighted work…) and supported by training in exchange for a fee. A franchise approach can result very lucrative in the creative industry where the biggest media franchises are generating billions of dollars in revenue worldwide.
All franchisees are licensees but not all licensees are franchisees.
Merchandising
Refers to the commercial exploitation of a name, symbol or distinctive design of a recognised brand within a particular field for the purpose of selling good or services in others fields. This strategy presents some advantages for both parties:
- For the merchandiser: expand its business to other lines of products / services without taking financial risks.
- For the other : benefit from the brand recognition of the merchandiser’s products / services.
Other strategies such as Join Ventures and Strategic Alliances, enables parties to execute agreements and collaborative partnerships that can enhance the overall IP Rights performance.
Regardless of the strategy adopted, the management of intellectual property (IP) assets and rights enables individuals and businesses to fully leverage the value of their creativity . These assets are expected to play growing roles in our ever digital and technological world; therefore careful consideration must always be taken, before planing and executing an IP strategy.
Intellectual property (IP) matters, hence our team at SIP Management is making IP protection and management affordable and accessible to all. For more information, support and assistance on the topic, check out our community, connect with other members and enjoy the benefits of our platform.
Our community is made of legal experts in intellectual property (IP) related matters such as trademark, patents licensing and merchandising. Our marketplace connects those individuals and teams in need of support to regional and specialised service providers. We help our members save time and money in all matters regarding their intellectual property (IP).
