Is intellectual Property really that important for your business?

by IP Blawg on January 31, 2016

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As drivers of business success and competitive advantage, intangible assets represent most of the value in today’s businesses. However, as we know, for most SMEs these assets remain under-exploited and underestimated. A survey conducted by The Financial Times found that of 451 company owners, only 6% value their intellectual property at anything more than 10% of their business assets. The following article outlines key competitive advantages as well as risks intellectual property can provide and explains how the strategic exploitation of these assets can substantially enhance the success of your business.

Intellectual property results from the application of the mind to develop something new or original. It occurs naturally in day-to-day business; however not everyone realises that even the smallest alteration to a product may constitute a new innovation that can be legally protected. Intellectual property (IP) protection can provide multiple advantages for your business – but a few unexpected factors can seriously impair a business’s ability to protect its innovations. It is important to take necessary precautions from the beginning to manage the intellectual property that rightfully belongs to you.

During the early stages of a new business venture public disclosure can result in a stolen opportunity, as innovations that were disclosed before IP protection has been applied for can be disbarred from protection. Using non-disclosure agreements when divulging confidential information to third parties is essential to ensuring these valuable intangible assets are not denied to you.

Similarly, it is important to be clear from the start about the ownership of inventions created within your business. If one of your present or former employees or contractors can claim ownership over any of the IP (such as copyright in documents, trade mark rights in brand names or logos, or patent rights in innovative features of products or services) upon which your business is founded, that claim, accurate or not, may be fatal to your success. Employment contracts and service agreements that clearly spell out the ownership of innovations developed during employment should be used. Failing to take these precautionary steps could create ownership issues in the future.

Legally enforceable rights like patents, designs, copyrights or a trade mark, can help to prevent the theft of the product ideas, corporate branding, inventions and unique business processes that give your business a competitive advantage. However, on the other hand other people’s IP rights (including your competitor’s IP rights) can create risks for your business.

If you don’t conduct trade mark and patent searches early on, you might find that your company name, logo, product name and technology infringes someone else’s protected IP. This may result in a court action that requires you to cease trading under your company’s name as well as legal expenses. Before you register your business name, conducting a search on the Australian Trade Mark’s database, ATMOSS, allows you to identify whether your chosen business name can be used for your products or services without infringing someone else’s brand. Once you have established whether your brand is unique, a Trade Mark Attorney can provide a thorough analysis of all databases and will assess your eligibility for trade mark protection as there are specific requirements for a business name to be protected. The article “IP in Depth: Difficulties with establishing grounds of opposition based on descriptive or suggestive trade marks explains just a few considerations that business owners must take into account when selecting a company name or brand name.

Similarly, in the case of a new product idea concerning a business process or piece of production equipment, without properly researching existing patent rights, you could face serious consequences down the track. Google Patent Search provides an efficient and free search engine for published US and international patent applications and often includes valuable technical information concerning the proprietary developments of potential competitors. Identifying what your competition claims as their own IP can help avoid costly and time consuming infringement litigation. While substantially advantageous, many researchers fail to review published patent literature for two main reasons – they do not recognise their value or they simply do not know how to complete a thorough search. The article ‘Simple Self-help Patent Searching Techniquesprovides specific instructions on conducting patent searches and identifying whether inventions are new or if they are already protected.

Existing patents can provide opportunities however, as well as risks. The published Patent applications that can be found through searches provide valuable technical information that skilled people can use to recreate and exploit an invention. After the patent term has expired or lapsed, this technology is then available for anyone to utilise. Equally, many overseas patents do not have a counterpart in Australia, so the technology is available for use within our borders. These databases thus describe potentially free innovations that may be greatly advantageous to businesses and avoid you having to ‘reinvent the wheel’.

Finally, a structured IP strategy can protect your profit margins and even provide access to new revenue streams or finance, which may be crucial during any stage of your business venture. Holding protected IP rights gives your business additional and defined intangible assets which can help to secure finance and demonstrate that you have something substantial for stakeholders and banks to invest in. In addition, the Australian Government provides monetary benefits for holders of protected IP rights through tax incentives and innovation funding, so it may be worth inquiring whether these incentives are available to you.

Setting up a new business or product line is a complex process, but understanding IP and how to protect your business’ most valuable assets is potentially vital to the future success of your business. Many patent and trade mark attorneys can provide a free consultation to help you identify what IP protection is right for you and what could be valuable to protect and how. You can find a reputable patent attorney through the Institute of Patent and Trade Mark Attorneys of Australia.

Ernest Graf is the Principal and Head of Physics, Electronics and Telecommunications team at Fisher Adams Kelly Callinans. Ernest is a dual U.S and Australian attorney and has 20 years patent and Trademark experience in computer software, telecommunications, mechanical and electrical fields of technology.

IP Blawg

IP Blawg

IP Law Blogger at IPBlawg
Intellectual Property Blawg is a legal news blog on intellectual property law and practice.
IP Blawg

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