Author Julio Reis
Licence Creative Commons Attribution-Share Alike 2.6 Generic
An intellectual asset (“IA”) is something that gives a business an advantage over its competitors. No matter how small it may be or how simple its business model, almost every successful business will have such assets. An IA may be the business’s reputation, its customer list, a way of making or packaging things, a website or even its standard terms and conditions.
A business that possesses such an asset will want to hold on to it and, if possible, make money from it. Its best chance of doing so is to devise a plan to
- identify assets likely to generate revenue or some other benefit for the company,
- determine the best legal protection for the IA having regard to its value and available resources,
- provide a means of enforcing such protection, and
- manufacture, license or otherwise make money from the asset.
Such a plan is often called “an intellectual property” or “IP strategy”.
The starting point for a private inventor must be his or her invention. Is anyone likely to buy it? If so, who will be its buyers and how many will they buy? Developing, marketing and patenting an invention, not to say enforcing a patent, is likely to be costly. Unless those costs are likely to be recouped, there is no sense in incurring them. For many private inventors, this is a very difficult question. The technical elegance of their brainchild may blind them to commercial realities. This is where membership of an inventors’ club can help. The members of such clubs are not a bad cross-section of the general public. If fellow inventors are unmoved by the invention or see snags their views should be considered seriously.
The next issue to address is putting the invention on the market. That usually boils down to a choice between making and marketing the invention or licensing others to make and market it. Some inventors already have their own manufacturing or retailing businesses but many do not. If they want to make or market the invention for themselves they have to set themselves up in business. They will need to draw up business plans, find collaborators, raise funds, acquire premises, plant and staff and market their inventions to the public. They may subcontract production to a manufacturer in this country or abroad. If they do that, they must ensure that their invention is patented or otherwise protected in the country where the manufacturing is to take place and they will need a very tight written agreement with the sub-contractor.
Licensing is often regarded as an easy option but it is not. A licensee will incur costs in tooling and marketing. A business will incur those costs only if persuaded that to do so would be worthwhile. Determining whether a licence is worth taking is a type of business planning that few potential licensees have the time or inclination to carry out. It is therefore up to the inventor to persuade them that it is worthwhile. Daunted by such difficulties many inventors resort to invention promotion companies or making unsolicited offers to manufacturers or retailers. Such approaches rarely work and often lead to expenses for the inventor.
Patenting is expensive but may be necessary. Ideally, the invention must be protected in the countries where it is to be sold and the countries where it can be made. However, such protection may cost many tens of thousands of pounds in filing, translation and renewal fees. Another problem with a patent is that the inventor discloses his or her invention to the world in return for a monopoly in a single country. If a patentee has a patent for his invention in the United Kingdom but not the United States there is nothing to stop an American from making and selling the invention in the USA or anywhere else where the invention is unprotected. There may be other, cheaper forms of legal protection for the invention that are available to the inventor. Simply keeping shtum about the invention is one option if the invention is a product that is hard to reverse engineer. Relying on some other IP right such as unregistered design right in the shape or configuration of the product or copyright in any software that may control the device may be others.
An inventor must be able to resist applications for the revocation of his patent or a declaration of non-infringement as well as pursue infringers. Even with costs caps and cost management civil litigation can be cripplingly expensive. The only way that most businesses can sustain such expense is by taking out adequate IP insurance and the premiums for such cover are not cheap.
An IP strategy can be drawn up at any time and it will be reviewed and updated continuously but the ideal time to devise one is when drawing up a business plan. That is because the costs of prosecution, procurement, professional services, premiums and so on can be funded and balanced against other expenses.
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