Intellectual property transforms knowledge into an economic result by interacting with legal and economic forces in the market. It includes creations of mind, such as inventions, literary and artistic works, designs, symbols, and names used in commerce. These intellectual outputs are seen across industries, including creative and cultural sectors. Consequently, Individual objects that are afforded intellectual property protection include inventions, trademarks, designs, works in science, literature, art, information, biotechnology, AI, and any creation out of human ingenuity.
Given how legal and economic forces work together to derive the most out of a said creation with intellectual property; one needs to pay attention to the fact that they form the key player in the search for growth, development and competitiveness for both big companies and the Small and Medium Enterprises. It has also become important from the perspective of the consumers and for the companies sustainable development and growth.
In this blog we will be looking at the procedure to take intellectual property management forward, the various strategies that will be useful for SMEs while managing their intellectual property and how law firms & intellectual property attorneys can aid in the process.
What is Intellectual Property Management?
Knowledge-based businesses, such as software developers, legal firms, and consulting firms, have driven the economy for quite some time now. While the firms have noticed that Intellectual property (IP) can provide a competitive edge, but understanding its nature and worth is challenging. Intellectual Property is revealed by the gap between a company’s book value and market value. This requires the Intellectual Property to be understood for its rights, obligations as intangible assets and that consequently requires an Effective management.
This is where IP management steps into the picture. Intellectual property management is a continuous process that starts with innovation development, progresses to product creation, protection, commercialization, economic results, moral obsolescence, and displacement by new intellectual products. It includes monitoring competitors’ intellectual property for business intelligence and the effectiveness of management depends on the quality of these activities. This process involves identification of the IP with SMEs; Evaluating the IP Objects identified; once the evaluation is arrived at, finding the mechanisms to protect them; then exploiting and defending those IP rights received as a means of protection to economically grow and expand in the market.
- Identification: SMEs struggle with accurately identifying intellectual outputs, potentially leading to economic losses due to unrealized opportunities for exploitation of intellectual property rights.
- Evaluation: Intellectual property valuation is a crucial process that determines the financial expression of an intangible asset. It involves considering various factors such as the context, life cycle stage, presence or absence of protection, and obsolescence. The valuation is influenced by the nature of the object and the information collected and used. The presence or absence of protection is important as it affects the accessibility of stakeholders and the value of the asset and the obsolescence of the IP objects leads to a sharp change in the asset’s value.
- Protection: The protection to IP objects can be afforded via legal measures, keeping the information regarding the IP object confidential. In the absence of these protection mechanisms, they are freely available to the public who may be able to derive more economic advantages and benefits than the original owner.
- Exploitation: The exclusive rights to decide on the management of the IP Objects which in a sense provides a certain level of monopoly with the IP objects is referred to as exploitation. These exclusive rights aids in deriving all the economic benefits out of the IP objects and the right to decide who gets to use it, when they get to use it and at what rate.
- Defense: Intellectual property rights involve the owner’s right to prevent third parties from using their product without explicit consent, only after a license agreement and payment of appropriate fees, and can be protected through various strategies.
As an SME one can opt for different levels of the IP Management process. They are classified based on the efforts taken by a firm to protect and exploit IP Objects ranging from Defensive, Cost control, profit center, integrated and visionary where, defensive is at the lowest level in the pyramid and visionary occupying the top most position.
Intellectual Property Management Strategies for SMEs
IP Strategies are purposefully developed to achieve prosperity and determination of business development. IP Strategy is said to be a set of decisions an organization like any SME would make with regards to the actions, positioning, and capabilities it seeks to achieve with the intellectual property in order to support the long term business objectives. Regardless of the strategy, certain factors remain a common thread across various strategies. These factors include, Characteristics and features of the IP Object (national and international regime that governs the working of the IP objects), The various levels of the protection mechanisms; the goods and services in which the SME is seeking protection for economic growth and expansion and the alignment with objects of the company.
Strategy 1: Synchronization of various department strategies
The IP Strategy essentially licenses in and licenses out the IP related to the innovation/ IP Object. It is the competitive intensity, the existing standards and any prior works/ forms of the existing work (prior art) that shape IP strategy. The SMEs can combine their individual strategies like the market strategy and technology strategy which aid in designing the Innovation and subsequently aid in executing the market strategy of the SMEs. These Strategies shape the IP Strategy and IP strategy of the SME in return owns the Innovation or the IP object of the firm. Not only this, the IP strategy will cover up the failings of the technology strategy and sustain the profits arising out of the market strategy.
Strategy 2: IP Atom Framework
The IP Atom Framework outlines methods for managing intellectual property rights to maximize protection, addressing the limited time of patent protection, and requiring the use of additional protection regimes.
This framework developed by Selvakumar in his paper titled Overlap of Trademarks with Other Intellectual Property Rights: The Strategies of Global Brands is where different regimes of protection (Patent, Copyright, Trademark, and Design)apply to the same object of IP which overlap in their operation. Just like an Atom that has three layers; at the heart of which is the function of the Innovation with the strongest protection (Patents and Trade secret); followed by the expression through which the innovation is depicted because every function can be shown/made in different functions (Copyright); finally the brand associated with the innovation which can be protected through trademarks and designs.
Strategy 3: IP Continuum Framework
This is based on the lifecycle of the protection provided through the various regulations. It is a strategic protection that is developed over a specific period of time. Patents, copyright, and trademarks are the most stable protection regimes, as they provide the greatest functionality at the beginning of their life cycle. However, as patent protection reduces, copyright law can be used to extend the useful life of the product. Trademarks and designs offer unlimited in-time legal protection, providing additional economic benefits. Turning a trademark into a powerful brand can influence consumer preferences and commercial reputation, contributing to consumer loyalty and maximum economic benefits. The value transfer principle is essential in the cumulative strategy of protection, as each added element affects the total economic value received by the owner of the intellectual product.
Factors that influence IP Management of SMEs & IP Attorney’s role
In order to achieve the right IP management strategies, the SMEs with the aid of the IP Attorneys can first define the objectives of the SMEs in terms of their management, then they may decide on the objectives related to the Intellectual Property specifically, decide on the IP strategy mechanisms such as Acquisition and Maintenance of IP Rights, Licensing of the IP rights to third parties upon the payment of the license fees, and enforcement of the IP Rights through infringement and passing off suits. Finally, they can complete the cycle with the alignment of the IP Management strategy with the availability of IP Objects, SMEs overall objectives and consistency with other corporate, business and functional strategy.
*Written by Gayathri S, Legal Intern @Intepat IP
