There comes a moment of truth in the game when you have to show your hand: to investors, to business partners, to customers, to auditors, and even to competitors. Will you hold all the trumps or have you overplayed your hand? Will your cards convince the scrutinizing eyes of the experts? Of course, your cards, i.e. your team and expertise, your vision and skills, your tangible and intangible assets, etc., were not given to you for free. You had to work hard to pull them together and to shape them. This holds true for your Intellectual Property (IP) card in particular. But how do you create a strong IP card which you can exploit and play to your advantage? The words IP strategy come to mind, evoking images of smooth sailing through slightly adverse but easily controlled conditions. In reality you probably find yourself out there in the turbulent and everchanging rapids that is the IP world, where you should advance confidently but cautiously and where you need to adapt your IP portfolio quickly and intelligently in order to prevent your raft from sinking.
A strong and well-balanced IP portfolio is a true asset in many ways: It highlights the potential of the company to investors thus helping you to secure much needed finance to launch or expand the business. It helps to communicate your company’s strength to customers, business partners, investors and competitors alike. It creates a perception and an image of the company through a clearly defined (technology) profile, which again enhances the company’s value. But more than a mere marketing tool, a robust IP portfolio also minimizes business and investment risk, as it enables a company to position itself and even to establish exclusive rights in a specific market niche. Such exclusivity can provide startups with an invaluable competitive edge over large players in the field – and it might just be a life saver.
Constructing, nurturing and growing an IP portfolio demands a continuous effort, as it relies on incessant innovative thinking on all company levels and diligent IP management. A supportive working environment, which encourages and appreciates its creative workforce, provides a good basis for innovative seeds to germinate. Internal IP awareness and processes will assist the germs to take root and grow. A strong and resilient IP portfolio requires pro-active planning over the long-term and a strategy which is consistent with the company’s vision. In order to be effective, an IP strategy must be aligned with the company’s key business interests. It must support the business plan right from the start and evolve with it over time. Any scale-up of business activities should be underpinned by a developing IP portfolio to safeguard the investment.
When putting an IP portfolio together you will first need to cast a critical eye on your company’s strength and key interests (current and future) in order to identify the assets, which support both. Protecting these assets should always be a business and investment decision. Cost, benefits and impact of the investment need to be carefully balanced.
Technical inventions can be protected by patents, equipping their owners with monopoly rights which they can use to create barriers against competitors. This works both ways of course. As a business owner you will therefore want to keep a close eye on the patent activity of your competitors. It is noteworthy that patent protection of a portfolio of inventions in several markets can be very costly. It may be wise to consider additional options for the protection technical features. Although not a granted right in itself, trade secrets can be extremely effective, in particular when combined with patents. The risks are not to be underestimated though, as trade secrets’ only protection is their secrecy and their value is destroyed once they become known. In addition to this, there is always a possibility, that a third party develops the secret technology independently, thus eroding the value of the asset. Today, Blockchain technology proves to be an extremely useful tool for recording your trade secrets. Blockchain service providers specialised in IP, such as Bernstein (https://www.bernstein.io/), enable their users to secure evidence of creation and ownership of any given information at any given time whilst maintaining complete secrecy about the recorded information.
Prior to embarking on a protection strategy which relies at least partly on trade secrets, it should be carefully considered if the secret information can be reliable and safely managed. For key employees with access to the trade secret certain measures, such as confidentiality agreements or only partial disclosure of information on a need to know basis, should be put in place, in case these employees leave the company. The likelihood of a third party developing the trade secret independently needs to be evaluated, as well as the potential damage this would cause to the company.
Although software and computer programs as such are excluded from patent protection, their technical character can be protected and the patenting route is certainly worthy of consideration. Having said this, the author of source code enjoys automatic copyright protection for the code from the date of its creation, as do creators of literary or artistic works with a unique character. No official registration of the work is required, but it is advisable to apply the copyright sign (©) to the work in order to inform the public. Whilst the owner of the copyrighted work can stop others from copying the original work, the creation of similar works, which are inspired by the original work, is permitted.
An overall aesthetically pleasing appearance of a product can also be a feature worth defending. Best to do so by registering it for design rights, which protect the product’s appearance for a relatively modest investment. The same is true for trademark protection of names, symbols, colours, particular sounds, or catch phrases, etc, which consumers associate with the company, its products and values. By preventing competitors from using its trademarks, a company can preclude others from taking advantage of the trusted relationships it has established with its stakeholders and the goodwill it has generated.
For both, trademark and design registration, it is highly advisable to engage the services of an expert attorney in order to ensure the comprehensive protection of all aspects of the assets. Expert advice is absolutely necessary when it comes to patent protection. The patent application procedure is lengthy, complicated and often burdened with arduous technical and legal disputes. Moreover, it is essential for your overall patent strategy to make the right decisions at the right time during this procedure and to prepare an application with the competition and third party rights in mind. Patent attorneys help to avoid the pitfalls and should be consulted early on in order to define a suitable filing strategy, which permits the company to keep cost under control without having to compromise on the quality of the patent. Depending on the company’s research and commercial needs, patent attorneys can suggest mechanisms to either delay or speed-up the patenting process, thereby optimising the timing of key decision points for the company. In short, the right professional expert and IP partner will enhance the quality of a company’s IP portfolio. He or she will assist the company in its formulation and implementation of an IP strategy and equip it with a solid IP roadmap allowing it to navigate safely through the rapids of a precarious IP landscape. The right partner supports the company in contractual IP matters, provides advice in its negotiations with commercial partners and is a reliable escort through the mine field of patent litigations. The right partner helps the company to stay in charge of its IP assets.
Business is a contact sport and a company’s IP strategy is not formed in a vacuum. On the contrary, it is faced with third party interests and (IP) rights from its very conception. Regular searches of the patent literature in the field of interest are therefore essential for diligent IP management and the long-term strategy of the company. Such searches help to identify potential external influences or threats to the patent portfolio early on and will help to determine whether a new invention is protectable in light of the prior art. But first and foremost, the company needs to know if it can actually exploit its IP rights without infringing on third party rights. Such infringement could prove extremely damaging if not detrimental to a young company. To this end, « freedom to operate » (FTO) searches should be performed and the IP landscape in the relevant field should be monitored in order to mitigate the risk of litigation. It is worth noting, that only the actual use of the IP right, but not its mere possession can infringe on a third party’s right. Hence, an FTO search is performed based on the intended commercial use of the invention. As the commercial use shifts, so should the FTO search. Obviously, if a comprehensive FTO search is performed before the finished product and its application is clearly defined, the search may not unveil all pertinent documents. Rather than relying on one big FTO search at one (usually very early) point in time, the fields and technologies of interests should be monitored on an ongoing basis. The results of FTO searches will only be as good as the questions asked. During the development and for the lifetime of a product these questions will have to be adapted to remain relevant. The emphasis should be shifted from a once off big FTO search to continuous close surveillance of the IP landscape, as part of which the search parameters need to be aligned with the commercial plan for the product or technology at any given time.
Patent database searches are very useful if you want to find out what your competitors are up to, to anticipate their next moves and to uncover any potential threats. As an additional benefit, you may discover potentially interesting business or partnering opportunities. And last but not least, intelligence insights gained as part of patent searches inform internal R&D and stimulate further innovation, creativity and IP generation, a fundamental objective of patenting authorities.
With regards to third party IP rights, patent information analysts offer invaluable assistance in performing comprehensive in-depth searches and in monitoring the continuously evolving patent landscape. A lot of extremely useful information about competitor activity and potential infringement risks can be learned from the company’s existing customers and business partners.
Having generated a robust and well-thought out IP card for your game you now have to decide how to use it. But how do you put your intangible assets to good use and create value and revenue for your business? Well, firstly, the value of a strong IP portfolio will be reflected in the valuation of your company, which also accounts for your intangible assets. And as a startup, you may have experienced already, that IP proves to be quite helpful when it comes to raising finance and reassuring investors. It is worth bearing in mind that IP, like any other asset, can be traded. It can be sold, rented or used as a bargaining chip in negotiations. As such you may receive an income from licensing your IP, or you may use it to gain access to a third party’s IP as part of a cross-licensing arrangement. Such cross-licenses may also prove useful in case you are ever inflicted with FTO or potential infringement issues. Negotiate and use your IP card to strike a deal and resolve the issue. Besides, use your IP to establish new commercial partnerships, build your business networks and collaborate with research institutions. Here your card may help you to leverage funding for your own R&D projects. Whichever way you play your IP card, use it wisely.