Having a good grasp of your intellectual property is paramount for a project to be commercially successful.
Over the past five years we’ve worked with many organisations commercialising technology: from guys in garages to Fortune 100 companies, and from venture-backed start-ups to publicly funded research institutes. We’ve seen triumphant successes and dismal failures. Surprisingly for such a diverse data set, the starting point of both successful and unsuccessful commercialisation is remarkably consistent: it all starts by understanding your intellectual property (IP) position.
IP (in its broadest sense, not just patents but also confidential information, copyright, trademarks, know-how – all the IP rights) is fundamental to successful commercialisation. Despite this, many New Zealand organisations see IP as a secondary or even tertiary consideration. For example, companies will generally have a fixed asset register listing cars, desks and LCD monitors, but few have any record, let alone active management, of potentially high-value IP such as trade secrets, copyright, trademarks or inventions.
So what should New Zealand companies do? The solution is twofold.
Firstly, increase awareness and understanding of IP. You can’t make effective decisions about your intellectual property or leverage its value if you don’t understand what it is, how it works and which role it plays in your industry. Ask: how much innovation or IP do we have? How much are we creating on a daily basis? Is it being used? If it’s not being used, what is happening to it? What is our true spend on IP protection? Are we generating revenue or value from that IP?
Addressing these questions helps management take a measured view of how the business manages and utilises IP. If the conclusion is ‘We don’t’, then you need to connect to an advisor who can help answer these questions and develop a robust and commercially orientated, IP strategy for you.
Secondly, when your organisation does develop a great idea, invests in new R&D, files a patent or acquires a company it is critical to objectively assess the IP position of that idea, R&D, potential patent or company.
Assessing IP position provides three key insights.
Firstly, are you likely to receive broad and strong IP protection? This directly impacts on both the commercial potential of the idea and the commercialisation options available.
Secondly, do you have Freedom to Operate (FTO)? In other words are you likely to be sued if you use this technology? Unfortunately having your own patent does not automatically mean you have FTO – you can infringe someone else even if you have a patent on your technology.
In the third instance, does your IP provide invaluable market intelligence? Does it reveal the state of technology development in your market or industry – who is doing what, when were they doing it and where are they now?
It should generate a list of people working on what you are working on. These are your potential competitors, collaborators, strategic partners, co-developers, licensees and licensors. Easily available, such research would otherwise cost thousands of dollars and weeks of googling.
The combination of these factors provides critical early insights into whether a project is likely to be commercially successful. This leaves you better prepared to make a host of decisions – a strong IP position justifies greater investment, more aggressive expansion plans, more extensive protection and it makes strategies like licensing or IP sale viable. Conversely, a weak IP position might prompt you to redirect R&D, take a different strategy or even discontinue the initiative altogether to focus on other projects.
And a final word: in both cases it’s critical to seek independent and commercially relevant advice. In practice (and logically) this means your IP strategy should not be defined by the person filing your patents or trade marks.
If there’s one lesson, it’s this: IP is a critical business asset. Managing it properly is a prerequisite for every aspiring business.
Paul Adams is the CEO of EverEdge IP, New Zealand’s largest and most successful private sector technology and IP commercialisation firm. EverEdge IP won both the NZ International Business Award for Best Commercialisation of IP 2012 and Outstanding IP Leader Award 2012, China